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Last Updated : Jan 30, 2015 10:59 AM IST | Source: CNBC-TV18

Can sustain NIMs at 36% post investment phase: Justdial

In an interview to CNBC-TV18, Ramkumar Krishnamachari, chief financial officer Just Dial, shares his insights on the company‘s Q3 numbers and his outlook for the upcoming quarters.

In an interview to CNBC-TV18, Ramkumar Krishnamachari, chief financial officer Just Dial, shares his insights on the company’s Q3 numbers and his outlook for the upcoming quarters.

Below is the transcript of Ramkumar Krishnamachari’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.

Latha: Can you just break up the top line growth of about 29 percent in terms of how much was volume growth and how much was realisation improvement?


A: If you look at the over all campaign that grew about 23.50 percent and the over all growth in revenue is being about 29 percent so you can balance, you can attribute between the volume and the overall growth to the pricing. This quarter we did do some pricing action but those are things that we do it on routine basis as and when opportunities arise.

Over all this is being a greater quarter in terms of the revenue in top line growth. There is no specific action as such on the premium campaign it is just that over all volume plus the pricing which is led to this revenue growth and that will continue it is no different from other quarters.

Sonia: Margins in Q3 have looked very healthy. In fact margin striped of ESOPS is the highest we have seen in the last many quarters. What led to that improvement and is that sustainable?

A: It demonstrates our ability to sort of generate this kind of margin if we are in a steady state. However we are still in an investment phase. We are investing in sales, in marketing; we are investing in Search Plus this will continue. We believe that, you will see increased employee addition in Q4. Other investments that we continue to make in Search Plus while it demonstrates what margins we can generate but the focus of our is on growth and other Search Plus initiatives where we are continuing to invest. I would say that at some point of time I would have a steady state at 36 percent sustainable margin but the focus is more on growth and investment in the right areas rather than growing up this margin.

Sonia: You had earlier told us that the employee stock ownership plan (ESOP) cost would average at about Rs 3.5 crore per quarter, this quarter it is higher at close to Rs 6 crore, will the average ESOP cost be higher henceforth?

A: The ESOP is normally the cost is front-ended in but the way the accounting is done, a lot of cost is upfronted in the initial years. So this quarter we did a lot additional number of -- within 700,000 Q2 we allotted 350,000, this quarter we allotted another 240,000. So the cost of the additional grant of shares has come in this quarter. Hence the expense has been recognised. The entire 700,000 perhaps will be recognised in Q4. So there, we believe per quarter my cost would be about Rs 6-6.5 crore that we believe should continue in the next one-two years and then it will come down. Overall cost would be to the tune of about Rs 95-96 crore for the 700,000, which will be recognised as one time for the next five-seven years.

Latha: You have an approval to raise Rs 1,000 crore, will that come this quarter before March?

A: We have not found any immediate short-term or in the medium-term any adequate deployment opportunity of that fund hence the question of raising fund does not arise. As I said earlier, I reiterate that we will raise if and only if I find suitable opportunity to deploy this fund in terms of any organic action initiatives, we have not found anything, we are sitting on Rs 800 crore of cash right now. If at all the question of raising money comes, it will be only over and above whatever is the utilised cash. So right now, we have not found any opportunity to invest or deploy this fund hence the question of raising funds does not arise.

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First Published on Jan 29, 2015 10:45 am
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