YES Securities' research report on Just Dial
Just Dial (JUST) reported inline financial performance for the quarter. Both, sequential revenue growth and EBITDA margin were broadly along expectation. It reported sequential revenue growth of 7.8% QoQ, led by increase in active paid campaigns (up 3.6% QoQ) and increase in average realization by 3.8% QoQ. The growth in the number of paid campaigns sustained recent momentum led by rising focus on monthly plans. There was sequential improvement in EBITDA margin(up 397 bps QoQ) led by control on other expenses. The Internet traffic to the portal has recovered to precovid level led by improvement in financial situation of SMEs. It has been slow recovery for Just Dial from the adverse impacts of two covid19 waves and current operating metrics are similar to precovid level. Also, the revenue recovery has happened at the cost of operating margin as the company has been focused on driving growth in core business through increased employee addition. The B2C segment continues to face high competition from Google and other specialized online players and it still needs to invest substantially for successful rollout of its other new initiatives like JD Mart, JD shopping etc.
We estimate revenue CAGR of 30.0% over FY22‐24E with average EBIT margin of 12.5%. We maintain our REDUCE rating on the stock with revised target price of Rs 615/share based on DCF methodology. The stock trades at PER of 33.7x/15.8x on FY23E/FY24E EPS.
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