Just Dial, the premier local search engine in India, experienced a remarkable surge in its stock, climbing 9% during early trading on April 21, reaching a notable ₹1000 per share. This upward movement came as a response to the company’s impressive fourth-quarter earnings, which showcased substantial growth and investor confidence.
Strong Financial Performance
In a recent announcement, Just Dial revealed a net profit of ₹158 crore for the quarter, marking a significant 36.2% increase year-over-year compared to ₹116 crore the previous year. The revenue from operations also saw a 7% year-over-year rise, reaching ₹289 crore.
- Other income surged to ₹108.7 crore, reflecting a 19% year-on-year increase and a 40.4% quarter-on-quarter growth, primarily due to falling bond yields and improved treasury management.
- The company recorded 191.3 million unique visitors in the quarter, an increase of 11.8% year-over-year, with mobile platforms accounting for 86.9% of total traffic.
Strategic Growth Initiatives
Just Dial’s growth strategy includes enhanced content enrichment and improved user experiences, contributing to this impressive traffic increase. The company also reported a 61% year-on-year rise in net profit for FY25, amounting to ₹584.2 crore, while total revenue reached ₹1,141.9 crore, showcasing a 9.5% growth compared to the previous fiscal year.
- The boost in quarterly performance was largely attributed to targeted merchant acquisition strategies, which facilitated deeper market penetration in both urban and semi-urban areas.
- Total business listings on the platform stood at 48.8 million at the end of FY25.
Investment Outlook
Following the release of these robust Q4 results, domestic brokerage firm Kotak Institutional Equities has maintained its revenue growth and EBITDA margin forecasts. However, it has slightly adjusted its Earnings Per Share (EPS) estimates downward by 3-5% due to anticipated reductions in other income.
The brokerage noted, “Currently, the company is concentrating on its core business with minimal emphasis on new ventures. We have revised our target ex-cash P/E multiple to 17X, leading to a new fair value estimate of ₹1,275, down from ₹1,330."
Conclusion: A Stock Worth Considering
Just Dial is viewed as a compelling investment opportunity, trading at attractive valuations of 7X ex-cash FY2027 P/E. Analysts suggest that any plans for cash distribution to shareholders could serve as a positive catalyst for stock prices. Kotak Institutional Equities has retained its ‘buy’ recommendation on the stock, highlighting its potential for growth.
This recent performance and strategic focus position Just Dial as a strong player in the market, making it a stock worth considering for potential investors.
