Just Dial tanks 6% ahead of buyback; Goldman downgrades

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Shares of Just Dial slipped 6 percent intraday on Thursday after Goldman Sachs has downgraded the stock to sell. The brokerage has also lowered target price to Rs 750 per share as it feels 22 percent rally in the past one month likely due to a small buyback to use as an exit opportunity.

It is worried about Search Plus execution risks and expects core search revenue growth to decelerate over FY15-FY18 to 19 percent due to inadequate investments in the past and rising competition. Goldman Sachs also points out that the company may have to incur higher expenses to maintain growth posing risks to street earnings per share (EPS), while lower growth in search and margins may drive the stock price lower.

"We continue to believe Just Dial’s core search business has long term value due to its brand recall and market leadership. However, their first mover advantage only provides time to innovate but not immunity to disruption. Successful execution of SP platform would be key to sustainability of core search business and will require significant incremental investments," it says in a note.

Meanwhile, the local search engine company is planning to spend to Rs 164.5 crore in buying back shares from shareholders. December 4 is record date for the buyback of equity shares. It will buy back up to 10,61,499 fully paid-up equity shares of face value of Rs 10 each at a price of Rs 1,550 per equity share

At 12:16 hrs Just Dial was quoting at Rs 871.40, down Rs 44.40, or 4.85 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory