Stock Tales - Just Dial Ltd - ICICI Direct

Posted On : 2021-06-12 20:44:25( TIMEZONE : IST )

Stock Tales - Just Dial Ltd - ICICI Direct

Just Dial (JDL) began operations in 1996 by offering local search services under the Justdial brand. The company generates revenues from advertisers who list themselves with JDL on various subscription and fee-based packages. They pay fixed monthly or annual fees and can select from premium and non-premium packages. We believe the company will be a key beneficiary of a shift of advertising to the digital medium. This, coupled with the company's launch of B2B platform will be a key revenue driver for JDL in the long run. This is expected to make the company a formidable player in the B2B, B2C segments leading to revenue, PAT CAGR of 22%, 21%, respectively, in FY21-23E.

Investment rationale

B2B next growth engine

India's MSME segment is digitally under penetrated. However, we expect this scenario to change led by Covid-19. There is now increased need for a digital medium to boost business growth. Further, although the B2B online market has seen an influx of players, the paid subscribers as a percentage of total MSME is just 1.3%. This represents tremendous scope for existing and new players to grow. We believe JDL's B2B platform JD Mart has potential to become a significant player in this segment, going forward. The company has shown a strong commitment to the new platform, by committing to spend Rs. 100-110 crore for branding & awareness, free leads and hiring leaders. JDL also plans to provide end-to-end solutions like logistics, financing, insurance & payment facilities to improve customer stickiness. This will also enable the company to have two revenue streams in the long run viz. subscription revenues and transaction-linked revenues. Apart from these initiatives, JDL currently has 7-8 million listings in the B2B segment. We believe the company can leverage this for cross sell and upsell. This, coupled with the JDL's large sales force (~8000) makes it well poised to capture the burgeoning B2B market and become a significant player in this segment.

B2C to improve with easing of lockdowns

We expect revenues to improve with easing of lockdowns and increase in digital penetration. In addition, the company is also promoting download of the JD app by providing JD cash against download & referrals. We believe these initiatives, coupled with an improvement in realisation & increase in digitisation will drive B2C business in the longer run.

For details, click on the link below: Link to the report

Shares of JUST DIAL LTD. was last trading in BSE at Rs.972.2 as compared to the previous close of Rs. 966.6. The total number of shares traded during the day was 77788 in over 4011 trades.

The stock hit an intraday high of Rs. 983.75 and intraday low of 955.9. The net turnover during the day was Rs. 75485982.

Source : Equity Bulls