NAUKRI Q2 FY27 Earnings Call: Oberoi Steps Down As CEO, AI ARR Hits Rs. 240 Cr

Double-digit growth with sharp margin expansion

• Standalone Q2 FY27 billings +13% YoY, revenue +13% to Rs.842cr — operating profit rose 30% to Rs.347cr, with operating PBT margin at 41%, up 541bps YoY.
• Cash from operations of Rs.373cr in Q2 FY27 (+27%) — H1 FY27 cash from operations reached Rs.598cr (+27%); September 2026 cash balance stood at Rs.4,976cr.
• H1 FY27 billings +14%, revenue +12%, operating profit +32% — broad-based across the portfolio.
• Ex-Shiksha, standalone billings grew >14% in Q2 FY27 and ~16% in H1 FY27 — Shiksha's structural transition dilutes reported growth; Shiksha billings fell 27% and revenue fell 9% in Q2 FY27.
• Management estimates underlying recruitment growth of ~14-15% — customer renewal timing lifted Q1 FY27 reported billings growth to 17.5% and dampened Q2 FY27; most deals are annual, so revenue is recognized over the following three quarters.

IT softness offset by other sectors; unique customers flat

• Q2 FY27 recruitment billings and revenue +13%, operating profit +20% at a 59% operating PBT margin — H1 FY27 recruitment billings +15%.
• Q2 FY27 vertical billings: IT/tech/BPM +3%, GCCs +7%, other sectors +18%, consultants +7% — other-sector growth led by BFSI, consumer, retail and manufacturing; H1 FY27 saw IT/tech/BPM +9% and GCCs +19%.
• Unique customers flat YoY at 46,000 in Q2 FY27, down from 49,000 in Q1 FY27 — management advised against over-reading the dip; the top 20% of customers contribute ~80% of revenue, and a revamp of e-commerce offerings (Rs.1,000-3,000/month tier) made them somewhat more expensive, lifting revenue while trimming buyer count.
• Consultant revenue growth slowed to 5% in H1 FY27, ~2-3% excluding ARX — management assumes it lost clients who served primarily IT services companies as those companies insource hiring.
• IT services segment grew ~9% in Q2 FY27 despite barely single-digit net headcount addition at the top 10 IT companies — management noted IT companies are mostly replacing attrition rather than adding headcount; sustainability is contingent on IT services hiring accelerating.
• GCC headroom skewed to smaller players — the largest GCCs have ~30% of their global workforce in India and are exposed to US events (e.g., Oracle's recent India layoffs), while mid-sized and smaller GCCs at 2-5% of global headcount in India have headroom to rise to 10-30% over time (period unspecified).

Rs.240cr AI ARR, penetration-first playbook

• AI-first products/services ARR at Rs.240cr (Rs.2.4bn) — defined as Q2 FY27 AI revenue (~Rs.60cr) annualized (×4); products include AIREX, Talent Pulse and job-seeker AI services (mock interviews, Neo agent, AI resume building). Management did not quantify a forward growth pace.
• AI revenue is essentially additive, not cannibalizing existing billings — some AI revenue existed in FY 2025-2026 (mainly Talent Pulse) but was not reported separately; ARX had little revenue in Q1 FY27 before scaling up massively in Q2 FY27.
• ARX adoption is early-stage: ~2,000 of ~160,000 Naukri customers — mostly small consultants sampling the product; the goal over the next 24 months is penetration and adoption, then upgrading clients at renewal. Management sees a potential pool of maybe 40,000-80,000 customers over time (period unspecified).
• AI revenue growth hinges on FY 2027-2028 renewals — Hitesh Oberoi said AI revenues will keep rising only if current users renew in FY 2027-2028; Sanjeev Bikhchandani added that renewals depend on customers finding value in the product.
• Pricing: ARX rate card of Rs.3,500 per mandate for companies and Rs.2,500 for consultants — the consultant rollout occurred in Q2 FY27; offerings are often sold as negotiated bundles but separate rate cards exist.
• Clients buying AI offerings paid on average at least 10-15% more than non-AI clients in Q2 FY27 — management sized a Rs.300-400cr Talent Pulse opportunity if adopted by 8,000-10,000 of its 40,000 large/mid-sized clients at Rs.3-4 lakhs/year, plus a Rs.100-200cr AmbitionBox employer-branding opportunity (period unspecified); benchmarked against China's Kanzun at $1.2bn with 7 million businesses vs NAUKRI's 150,000.

99acres near break-even; Shiksha remains the problem child

• 99 Acres billings +21% YoY in Q2 FY27 (vs +17% in Q1 FY27), revenue +17% — operating loss narrowed 93% to under Rs.2cr from Rs.23cr in Q2 FY26; cash from operations Rs.22cr vs Rs.2cr in Q2 FY26.
• 99 Acres engagement gains: app time share 49% in Q2 FY27 vs 27% in Q2 FY26 (per SimilarWeb's revised app data series) — app DAUs +25% YoY, property inquiries +33% YoY, with marketing spend ~13% lower YoY; management expects positive operating cash for FY27 and operating leverage to emerge progressively through the rest of FY27.
• Competitive relief at 99acres — Housing has been sold to Aurum, and Aurum has gone on record saying it wants to break even over the next 4-5 quarters, implying lower marketing spend; management estimates the new-projects opportunity at ~Rs.6,000cr across digital and non-digital spend (period unspecified).
• Job Hai billings +86% in Q2 FY27; management targeting 100% billings growth in FY 2026-2027 — current burn ~Rs.45cr/year (FY27 run-rate), a 2-3% drag on overall margins; internal calculations indicate break-even at ~Rs.100-125cr of top line, which management cautioned may take a couple of years to reach from FY 2026-2027.
• Matchmaking billings +23% in Q2 FY27 (Jeevan Sathi +18%, Aisle +40%) — segment near break-even at operating PBT (Jeevan Sathi +Rs.2cr, Aisle -Rs.3cr); Jeevan Sathi holds >45% profile share in Hindi-speaking markets; billing growth expected to accelerate in H2 FY27.
• Shiksha: AI-driven changes in search behavior have reduced referral traffic and hurt client delivery outcomes — cash losses from operations of Rs.16cr in Q2 FY27; pivot underway toward domestic counseling with AI voice bots and wider study-abroad coverage (UK, UAE, continental Europe).

Oberoi steps down; Bikhchandani takes charge with no fixed tenure

• Hitesh Oberoi steps down as MD & CEO at close of business on December 2, 2026, after ~27 years — Sanjeev Bikhchandani takes over as Executive Vice Chairman, MD & Group CEO from December 3; Oberoi continues on the board as non-executive director, subject to shareholder approval, and holds "a lot more than 5%" equity with no plan to sell.
• No decision made on whether the role is full-time or a stopgap — the leadership structure will be evolved in consultation with the NRC; Sanjeev Bikhchandani stated there has been no conversation with the board on the role's duration or external options, noting he is 63 years old and cannot continue for 20 years.
• Recruitment CBO seat vacant after Pawan's exit a few months earlier — Sanjeev Bikhchandani said "nothing in a hurry"; the first priority is giving internal people an opportunity to grow. Analysts (Ambit Capital; Kunal of Banyan) flagged the Chintan and Pawan exits and the abruptness of the transition.
• Bench strength cited as rationale — Oberoi pointed to mature second-line leadership across Naukri, Job Hai, 99 Acres and Jeevan Sathi, with senior leaders of 20+ years tenure plus ambitious joiners of the last 5-7 years; he expects the leadership question to "sort itself out over time."

Three-pillar strategy; long-horizon optionality, near-term hedges

• Strategy rests on three pillars — (1) strengthening core marketplaces via technology, AI and customer outcomes; (2) growing AI monetization via AI-first products; (3) scaling growth engines — Naukri 360, Coding Ninjas, Job Hai, Ambition Box, 99 Acres, Jeevan Sathi, Aisle.
• Naukri 360 billings +37% in Q2 FY27; paid subscribers at 2.7% of MAU vs 1.3% in January 2025 — operating PBT margin 64%; management sees ample room to sell AI offerings to existing users without higher candidate-targeted advertising.
• Job Hai is a long-horizon bet — Oberoi said the market is unlikely to be big over the next 3-4 years (through ~FY 2030-2031) but could become very large over a 5-10 year horizon (through ~FY 2031-2032 to FY 2036-2037); getting to even 20-30% of China's Kanzun's size within the next 5-10 years would be "a big achievement."
• Management framed AI products as market creation akin to the year 2000 — Sanjeev Bikhchandani: "some things work, some things don't," with the eventual trajectory unpredictable; margins are explicitly "not the focus right now."
• Investment portfolio spans ~135 companies across AI, deep tech and consumer tech — ~Rs.5,000cr invested through the balance sheet and AIF.
• Key watch items: Shiksha's loss containment, FY 2027-2028 AI renewals, IT services hiring acceleration, and larger-GCC exposure to US events.