Info Edge Limited: A Contrarian Gem at Critical Support, Ready to Soar

The market's immediate reaction to Info Edge Limited's stellar Q4 FY2025 earnings—shares dipped 1.6% to ₹1,450—may have created a rare contrarian opportunity. Beneath the surface of neutral sentiment lies a company delivering an 83% quarter-on-quarter (QoQ) net profit surge, robust vertical growth, and a technical setup suggesting a potential breakout. For investors willing to look beyond the noise, the confluence of strong fundamentals and a support convergence at ₹1,420-1,445 offers asymmetric reward/risk potential.

The Earnings Surge: A Fundamentals Reassessment

Info Edge's Q4 results defied expectations, with consolidated net profit skyrocketing to ₹463.4 crore—up 7.7x year-on-year and an 83% jump from Q3's ₹242.59 crore. Revenue grew 14% to ₹749.6 crore, driven by its recruitment solutions (up 12.9% to ₹542.5 crore) and 99acres (up 14.3% to ₹105.8 crore). Notably, operating income hit ₹195.95 crore, a 7.6% year-on-year rise, while EBITDA margins expanded on cost discipline.

The company's cash profitability is undeniable: a ₹4,290 crore war chest, a dividend payout of ₹3.60 per share (post May's 5:1 stock split), and a record dividend date signaling confidence in its liquidity. Despite the post-earnings dip, the fundamentals scream value—especially for investors focused on long-term cash generation and dividend yield.

Technical Picture: A Support Break Could Trigger a Surge

The stock's recent pullback to ₹1,450 (post-earnings) has brought it to critical support levels. A close below ₹1,420-1,445 would mark a temporary setback, but this zone is likely to hold given the company's earnings momentum and improving sector dynamics.

A breakout above ₹1,510—the psychological resistance level—could unlock a rally toward ₹1,650, fueled by renewed institutional interest. Meanwhile, the relative strength index (RSI) remains neutral at 48, suggesting oversold conditions could soon reverse.

Why Now? The Contrarian Edge

The market's short-term skepticism is misplaced. Here's why this is a contrarian buy:
1. Sector Tailwinds: Recruitment and real estate sectors are cyclical winners in India's job market expansion and urbanization. Naukri.com and 99acres dominate their verticals, with AI-driven efficiency gains.
2. Dividend Catalyst: The ₹3.60 dividend (post-split) offers a yield of ~0.25% at current prices, but the payout underscores management's commitment to shareholder returns—a rare trait in growth stocks.
3. Technical Catalysts: The ₹1,420-1,445 support has held through prior corrections. A break above ₹1,510 could trigger a self-fulfilling momentum surge.

Risk/Reward: A Compelling Case for Aggressive Investors

The risk-reward is skewed upward. A 5% dip to ₹1,420 offers a 15% upside to ₹1,630, with a manageable 2.8% downside risk. The dividend adds a floor, while the stock split has broadened retail investor access—a potential catalyst for liquidity.

Final Verdict: Buy the Dip, Target ₹1,650

Info Edge's Q4 earnings underscore a company firing on all cylinders. The post-earnings sell-off has created a contrarian entry point at ₹1,420-1,445, with a clear path to ₹1,510 and beyond. For investors prioritizing asymmetric upside, this is a rare chance to deploy capital in a fundamentally strong, undervalued stock with a technical setup primed for a breakout.

Act now—before the market catches up.