Just Dail Shares Rally Over 8% To Hit 52-Week High On Q3 Results; Should You Buy?

Just Dail shares rallied 9 per cent in trade Monday as the company’s accelerated margin recovery towards pre-Covid levels continued after it reported the seventh consecutive quarter of sequential margin expansion.

Just Dial shares hit a record high of Rs 945.80, rising 8.5 per cent in early deals today against the previous close of Rs 871.65 on the BSE. With today’s rally, the stock has risen 40 per cent in a year and is up 8 per cent so far this year.

In the past one month, the stock of Just Dial climbed over 13 per cent as against 2 per cent rise in the benchmark Sensex.

Just Dial’s operating revenue rose 19.7 per cent YoY to Rs 265 crore in Q3FY24, while adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) more-than-doubled on a yearly basis to Rs 60 crore. As a result, EBITDA margins witnessed 1,054 basis points (bps) YoY expansion in Q3FY24 led by topline growth and strong cost controls, both on employee costs and other expenses.

Analysts at JM Financial raised their EBITDA estimates over FY24-26 by 7-11 percent and expect Just Dial’s core profit-after-tax (PAT) to increase by 5x over FY26. The brokerage firm retained a ‘buy’ rating on the counter, raising target price to Rs 1,010 per share from Rs 950.

“We expect the management to reiterate its focus on monetisation of B2B listings due to better realisation as well as relatively lower threat of disruption from verticals. Accordingly, we postulate the revenue share of B2B campaigns to increase significantly over the next 2-3 years, which would be the key driver of topline growth,” analysts wrote in a post-result review analysis.

Just Dial provides local search related services to users in India through multiple platforms such as website, mobile apps (Android & iOS), over the telephone, and text (SMS). The company also launched its B2B marketplace platform, JD Mart that enables India’s manufacturers, distributors, wholesalers, retailers to get new customers and sell their products online.

Global brokerage UBS has raised its target price to Rs 1,125 from Rs 1,050 per share on better than expectations in the third quarter. Margins expanded by 400 basis points on a quarter-on-quarter basis, it said.

The foreign brokerage is looking forward to guidance on growth outlook, operating expenses related to employee cost and advt. spends, and overall margin trajectory for FY25.