Buy Info Edge (India) Ltd. target Rs 1420: JM Financial

JM Financial has buy call on Info Edge (India) Ltd. with a target price of Rs 1420. The current market price of Info Edge (India) Ltd. is Rs 1176.95 Time period given by the brokerage is a year when Info Edge (India) Ltd. price can reach defined target. Info Edge (India) Ltd., incorporated in 1995, is a largecap company with a market cap of Rs 14483.64 crore.

Investment rationale by JM FInancial

Info Edge (INFOE) has announced a fresh USD 45mn investment in Etechaces Marketing (EMPL) along with Softbank, a global private equity fund. EMPL is the holding company of policybazaar.com and paisabazaar.com, the online marketplaces for insurance, credit cards and other financial products. Media reports indicate the possibility of an additional investment of USD 16mn that should lead to an increase in INFOE’s stake in EMPL to 14.2% (JMFe). The latest round of funding implies USD 1bn+ enterprise valuation for EMPL, making it the second such company in INFOE’s investment portfolio after Zomato. The transaction suggests INFOE’s willingness to defend its stake in late-stage funding as well as an appetite for larger deals; prudent, in our view, given the growing cash balance (USD 222mn as of 4QFY18). We raise our price target for INFOE to INR 1,420 (INR 1,400 earlier) mainly to factor in the revised valuations for ENTL. Maintain BUY.