July-September quarter saw reversal in the trend, says Ramkumar Krishnamachari, CFO of Just Dial.
Just Dial's core search business saw a growth of 7 percent in Q2, said Krishnamachari.
Speaking to CNBC-TV18, he said benefits of steps taken in Q1 will be seen in FY18.
However, margin impacted due to an Rs 8 crore extraordinary expenses, he added.Below is the verbatim transcript of Ramkumar Krishnamachari's interview to Latha Venkatesh & Sonia Shenoy.
Latha: Revenue growth has seen some acceleration to 10 percent from 6.2 percent, but how are you feeling about the last two quarters in terms of revenue and therefore in terms of the next two quarters?
A: As reiterated in the earlier quarter, we have seen a trend reversal based on the initiative that we have taken on expansion of the sales force and we are seeing incremental benefits kicking in from this quarter onwards. However, in this quarter we have witnessed that the core search has grown 7 percent and overall the growth is 10 percent.
We believe that we should see incremental growth rate happening in subsequent quarters as we move forward into Q3 and Q4. We believe that the steps and initiatives that we have taken in Q1 and continue to take in Q2, we should witness and get the full benefit of that in FY18. Therefore, its inline with what we had anticipated and based on the steps that we have taken and it is very encouraging that we are seeing the growth rates coming back or accelerating.Sonia: The worry for the market is a huge drop that we have seen in margins. What lead to that?
A: As far as margins of this quarter is concerned, there is an Rs 8 crore of extraordinary expense that happened this quarter, partially on account of our commercial shoot and on integration on one of the vertical, where we had to pay a lump sum amount for the integration to be done. We have recognised the expense in this quarter, so that is what dipped the margin.
However, we will be starting our advertising campaign in November. As I said the commercial shoot has been done. So once we start doing the commercials, you will see a dip in margin for the next few quarters but that is something that we have to do it considering that we have all these products which needs to be communicated to mass consumers. So you will see the advertising campaign kicking in from November onwards and you will see a dip in margin as we move forward into Q3 and Q4 due to this.
Latha: You stopped JD Omni B2B billing and inventory management this quarter. What were the revenues from JD Omni in particular and in Q2 compared to Q1?
A: We recognised about Rs 5 crore of Omni revenue and we had signed up about 1,500 odd contracts during the quarter.
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