Shares of Just Dial, a local search-related service provider, rose over 13 percent in early trade on April 18 after the company reported strong growth in its consolidated net profit and revenue for Q4FY24.
Just Dial’s net profit increased 38 percent on year to Rs 115.74 crore and its revenue from operations rose over 16 percent on year to Rs 270.30 crore.
The company’s operating EBITDA stood at Rs 70.60 crore, up 111.4 percent on year. The EBITDA margin stood at 26.1 percent compared to 14.4 percent a year ago. "FY24 was a year of efficiency where we delivered growth. Now, we are targetting to sustain margin of about 27-28 percent for FY25", Abhishek Bansal, CFO of the company told CNBC-TV18 in a conversation.
Also read: Just Dial's Q3FY24 results
Just Dial has Rs 4,625 crore as cash on books at the end of the financial year. The CFO added the the company is focusing on generating free cash flow and will take a decision on deploying this surplus at a later stage. "Either we can look at some inorganic opportunities or use for this for some aggressive advertising, either way, the decision should have unit economics in the long term. Any acquisition would need to have synergies will our core business," CFO Abhishek Bansal added.
Just Dial’s EBITDA margin witnessed 1,176 bps YoY and 334 bps QoQ expansion, led by topline growth and cost efficiencies, both on employee costs and other expenses, the company said.
In the interaction with CNBC-TV18, Bansal mentioned the possibility of reinvesting margin benefits into sales once margins hit 27-28 percent. He also expressed confidence in restoring historical margin levels of 27-28 percent in FY25.
Regarding advertising expenditures, Bansal stated that Just Dial plans to increase advertisement spending gradually while ensuring optimal margins. Even with higher ad spends, he believes that the company can maintain margins at 27-28 percent.
Further, Bansal said that Just Dial is focused on growing free cash flows, boasting a significant cash reserve of 4,624 crore.
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