Just Dial saw an improvement in margins quarter on quarter but the revenue growth continued to remain muted at single-digit of 7 percent for FY17.
Throwing more light on the numbers Ramkumar Krishnamachari, CFO, Just Dial said lack of spending on advertising impacted renewal revenues but will be offset by the signing of new customers.
However, going forward initiatives taken on user engagement will yield positive results on revenues. Moreover, steps taken on sales force expansion and focus on core search will also yield positive results, said Krishnamachari.
“Our immediate objective is to get back to double-digit revenue growth,” he said, adding that focus is to get growth back on track even if it means we have to sacrifice on the margin front.
He said the company is planning for an ad spend of Rs 100 and a substantial part of that will be spent in FY18, adding that a part of that was spent in Q4 as well.
Therefore, going forward one could see a dent on margins due to these spends, he said.
Below is the verbatim transcript of the interview.
Sonia: Despite a lot of efforts to improve sales, the revenue growth for the company continues to remain very muted. FY17 revenue growth is just single digit at 7 percent and there is so much competition in the market. What can you guide for FY18?
A: This is a very large shift. It takes time to turnaround and you have to remember that we have not practically advertised in the last two years and that has had an impact on our renewable sales or renewable revenue. However, that has to be offset by number of new customer signups. So you will see that going forward as the initiatives that we have taken on the user engagement side, will yield us on the positive side on the revenue growth.
However, having said that, it is all about execution and we believe that the steps that we have taken on the sales force expansion, and our complete focus on core business, core search, I would say is going to reflect in the topline growth. Our immediate objective is to get back to double digit growth and we are going to invest in the sales force expansion, we are going to do everything, both on the user engagement side, on the traffic side. There will be a lag effect of the improved traffic engagement and to convert into monetisation.
However, immediate effort is to make sure that we expand on the sales force and the focus is get the topline growth back to double digit. We are immensely focused on that. So, end of the day, it is all about execution, how well we execute, but you will figure out that FY18 will be a very crucial year for us from an execution standpoint.
Latha: But it has be two straight quarters, isn't it? Is there scope to improve margins from here on considering that the much awaited ad campaign has already started?
A: The ad campaign is certainly going to dent the margin because as we said, we are committed to spending Rs 100 crore. Part of it was spent in Q4. However, substantial portion of that Rs 100 crore will be spent in this year FY18, so, that will have a dent on the margin. However, having said that, the margin improvement is more due to the productivity and process efficiencies that we have seen.
However, again as I mentioned, the focus will be on getting the growth back on track even if it means that we have to sacrifice margin for couple for quarters, we are not going to stop from doing whatever it takes to get the sales back on track. So, that is the twin strategy is going to be that the ad campaign is going to continue. It has shown very encouraging results and on the topline side make sure that we get into double digit as soon as possible and that is going to happen through volume growth and driven by sales force expansion.
For more, watch video...
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
