Just Dial dips post Q2 results

The stock dipped 8% after the company reported 240 bps declined in EBITDA margin to 28.8% in September quarter.

Just Dial has dipped 8% to Rs 1,500 after reporting 240 basis points (bps) declined in EBITDA or operating margins to 28.9% for the second quarter ended September 2014, primarily due to an increase in staff cost. The company had EBITDA margin of 31.3% during the same quarter last fiscal.

Net profit of the company grew 9.9% to Rs 31.49 crore in September quarter compared to Rs 28.66 crore in the corresponding quarter of previous fiscal.  Operating income however, grew 30% to Rs 147 crore on yoy basis. Total expenditure increased 35% yoy to Rs 111 crore.

Management expects to maintain a strong revenue growth (around 25-30%) over the coming quarters along with stable margins.

Given strong growth plans, especially on the ‘Search Plus’ initiative, and to prepare for a larger e-commerce foray, Just Dial’s board approved a fund raising plan of Rs 1,000 corre. The company will use this cash as a war-chest for inorganic opportunities, says analyst at Motilal Oswal Securities.

Meanwhile, analyst maintains ‘buy’ rating on the stock with a target price of Rs 1,800.

“Base business margin accretion is likely to be invested back to strengthen the Search Plus platform. We remain optimistic on Just’s leadership position in the local search business and the synergistic presence in e-commerce through Search Plus”, said analyst in a report dated October 21, 2014.

The stock opened at Rs 1,630 and touched a low of Rs 1,481 on NSE. A combined 280,000 shares changed hands on the counter so far on NSE and BSE.