Real estate unit will turn profitable in six months: Quikr's CEO Chulet

Tiger Global-backed online classifieds portal Quikr is looking at a time frame of three to six months for its real estate business, its largest vertical in terms of revenue contribution, to become profitable. The move could help it catch global rival Olx, which has already turned profitable in India. Quikr’s real estate listing business, including subsidiary Commonfloor, currently contributes to around 30 per cent of the company’s overall revenues. “Earlier I was conservative when I had said we will become profitable in real estate in 12 months. However, it is going to happen sooner and it should be profitable in the next 3-6 months,” said Pranay Chulet, founder, and CEO of Quikr. This is excluding the contribution of the recently acquired realty unit from HDFC, which was profitable during the financial year 2015-16. The new unit will give Quikr access to the real estate brokerage market in India, which could yield higher margins for the company in the future. Chulet added that the contribution of Quikr Realty, formerly HDFC Realty, to the company’s overall revenue will depend on how much the company decides to invest in it. In December, HDFC sold its two units — HDFC Developers and HDFC Realty – to Quickr for Rs 3.57 billion in return for 3.3 per cent stake in the online classifieds company.

Going by the terms of that deal, the valuation of Quikr now stands at $1.69 billion (Rs 108 billion). Apart from real estate, the other major verticals of Quikr — Jobs, Cars, and Services, are also on track to turning profitable. “Our jobs platform is already making a profit, real estate is getting there and the cars segment will be inching towards it soon,” said Chulet. However, the overall profitability of the company was still some time away, owing to Quikr’s focus on growing its business. Marketing is still a big drain on Quikr bottom line and it isn’t going to go away anytime soon, even if the company’s business verticals begin generating cash on their own. “It’s why our investors have given us money, to grow,” said Chulet, in response to a question on whether the company is planning to turn on the profit tap in favour of all outgrowth. Quikr’s revenues were up by 55 per cent in the year that ended 31 March 2017 at Rs 637.9 million. The company, however, did not disclose its losses for the year in the documents which it had filed with the registrar of companies (RoC), though in the previous financial year (FY16) they had incurred a massive Rs 5.4 billion loss. Rival Olx, on the other hand, reported revenues of Rs 925 million and a profit of Rs 80 million for the year that ended March 2017. However, a large chunk of Olx’s revenue is driven by services the India unit renders to its parent unit for which it gets paid.