IT has been leading hiring; non-IT hiring bounced back in Jan and Feb: Hitesh Oberoi

We are seeing a rout in the global as well as the Indian equity markets. The new-age companies which had become the darlings of the stock markets are also out of favour. That is the global trend and whether it is Policybazaar, Paytm, Nykaa or Zomato, all are following it. What is your view on the selloff and the markets putting a premium on cash?
We have been public for the last 15 years now and every few years, the markets go up and down. As operating managers, all we can do is focus on our business, our customers and creating value for them. Many of these factors which inflate markets are beyond our control. Zomato was trading at Rs 160 a few days back, now it is trading at Rs 80. It may go up in a few months. What I have seen in the last 15 years of being public is that bad times don’t last for more than two or three quarters.

There are steep corrections from time to time but if you keep your head above water and focus on your business and keep executing, then the bad times would not last for long.

There is talk that this time the private market lag is not so much with public markets, they are catching up. The fear of missing out (FOMO) is turning out to be the Joy of Missing Out (JOMO). Tech stocks are falling out of favour. So in that sense, is it a normal cycle of a slowdown or selloff?
You are right. But in a lot of ways, a lot will depend on what happens in the next few months. Till about two weeks back, we were talking about the Indian economy going back to 8%, 8.5% GDP growth and suddenly, there is this fear of inflation, oil prices going up and stuff like that and therefore people are now beginning to believe that maybe the year will not be so good.

But what if this war in the Ukraine sort of gets over and what if there is a ceasefire in the next few weeks? Things could go back to normal very quickly. So the jury is still out on what is likely to happen going forward. Long term, if India continues to grow at even 6-6.5% per annum, all the startups will be fine and all the listed stocks of companies will be fine.

On the other hand, if we go back to a period of 4% or 5% or sub-5% GDP growth, then companies will have to tighten their belts, have to focus on generating cash and becoming more profitable.

What is the outlook when it comes to the scope of improvement in the recruitment business? Do you think there is a chance that you would be able to pass on the increased cost of talent to consumers via price hikes?
Actually the recruitment market has been on a tear. We had great almost four quarters now and there are no signs of the market slowing down. In fact, till two month ago, it was mostly the IT market which was doing well for us. IT is a large part of the hiring sort of mix on Naukri but now even the non-IT companies are bouncing back because thankfully and hopefully, Omicron is now behind us and we are seeing high contract sectors getting back to hiring mode.

There is massive scarcity of talent because of high attrition rates. The hiring cost is a very small proposition of the total cost of all the companies which are looking at 15-20-30-40% salary hikes. So what is half a percent of sales spent on hiring? It doesn’t really matter to them. Hiring cost is not really an issue for companies. I think the real issue is where to get the talent they want because talent is in short supply at this point in time.

Which sectors are driving growth in terms of job opportunities? Which are the cities as well that are seeing some improved trends and have things incrementally recovered from the after effects of the pandemic?
Till a few months ago, it was mostly IT hiring which is driving our index and our growth. We have to understand that increasingly IT is becoming more and more mainstream. So IT is not just IT service companies now. MNC development centres, IT startups, digital startups; Even non-IT companies are increasingly becoming digital companies.

So every banking company, every finance company, every insurance company, every retailer is going to become a digital company in the years to come and they are all sort of beefing up their digital hiring and we are telling people that every digital company is going to become a data company. So they are trying to beef up their hiring on the data side, analytics, data science, machine learning, AI and so on and so forth. What we are seeing now and therefore a lot of this growth was also driven by the cities where there are lots of IT companies. We saw massive growth over the last few quarters in Bangalore, Chennai, Hyderabad and Pune, not so much in Mumbai because Mumbai does not have a lot of IT companies.

But lately we have started seeing Mumbai and Delhi also bounce back strongly because the non-IT sectors are coming back as well. The other thing which we have seen this time around is that it is not only the big companies which are hiring but many more small companies have also joined the bandwagon. For example, we have a telesales team which works only with small companies. That part of our business has also been growing at a very massive rate for the last few quarters.

There has been the geopolitical crisis and we are seeing its repercussions because of the oil price hike on oil importing countries like India and various other cost pressures. Do you think that is going to eventually dampen ad spends which up until last quarter were sequentially higher by a good 30%?
There are two parts to our business; there is the IT piece which is almost half our business and then there is a non IT piece. The IT piece is more indexed to digitisation because more and more companies around the world are now becoming digital companies. So we have seen a massive surge in demand for IT talent across the board. I am hopeful that that will continue to be the case even if oil prices keep going up and so on.

I do not know what will happen if oil goes to $150 a barrel. I am assuming that companies will continue to digitise and may sort of slow down their digitisation effort a little bit. They may say okay we will spend over four years instead of three years or whatever. So I think that piece should still be okay going forward. It is the non IT piece which is more indexed to what happens in the Indian economy which could take a hit because that recovery is a very nascent one.

A lot of these companies that were hit for a very long time because of Covid, have started bouncing back. Non-IT hiring for the first time has started looking up very aggressively in January and February. Now if GDP growth gets hit once again because of high inflation, then some of these companies could again take a beating. That would be something we should all worry about in the months to come.

War or peace, the business of love that is dating as well marriages remains intact, I guess. Tell us a little bit more about this recent stake buy in Aisle Network. What does it really bring on the table because you are a bit of a late mover when it comes to dating platforms?
The singles market is a very complex market. We have been the number three player in the matrimony business for a very long time and some of the things we did in matrimony three years ago worked well for us for some time. But lately, our business had been stagnating and we therefore went back to the drawing board and said maybe it is time for us to think a little differently. We have also observed and a lot of our research has shown that India is changing and while of course there are the Tinders of the world which are frequented by the 18-20-22 year olds, even the marriage market is changing in sort of many ways.

On sites like Jeevansathi for example, a lot of the people who are active are parents and they take on the job of finding matches for their children. But increasingly, research is showing that people want to decide themselves. They do not want parents to get involved and therefore there is a space for a network like Aisle. Aisle is not really playing in the 18 to 22-year-old dating segment. It is a site which is frequented by the 25-26-year-olds, the 28-year-olds but they do not have parents on the platform and the individuals are active themselves and they take on the responsibility of finding the right match for themselves over time.

Initially, they may date and over time they may get married. Aisle has also done a brilliant job in that they have a network of sites. They have a site for Telgu speaking population, they have a site for the Tamil speaking folks, they have a site for people in Kerala and some of these sites have really done well for them over the last few years. As Jeevansathi does not have a presence in the south and is more of a north and west focussed sort of play, this sort of acquisition just fits well with our overall approach of doing things a little differently from how others are doing them in the matrimony space. It also gives us an entry into the Southern market where Jeevansathi has been weak traditionally.

For Info Edge India, the company that discovered a Zomato and a PolicyBazaar, this was the year of the exits as well. The fact that Indian retail investors can now also buy Tesla as well as the FAANG stocks thanks to the GIFT City exchange, what is going to be the impact of all of that?
My take on this is companies have to focus on the long run. If they keep focussing on customers and creating value for the end users, ultimately the business will do well. As far as investors go, they want to bag good businesses, they want to make money in the stock market and they are happy to wait for some time but they do not want to wait forever for that to happen. So my take is that– every time there is a slowdown, we see a flight to quality and safety. That is what is going to play out over the next couple of years.