Just Dial zooms 15%; stock hits 9-year high on strong June quarter results

The cash balance now stands at around 55 per cent of the market capitalisation of the company, and it is yet to decide on the utilisation/distribution of its cash balance, as per analysts at ICICI Sec

Shares of Just Dial hit a 9-year high at Rs 1,189.95, zooming 15 per cent on heavy volumes after the company reported a strong 69 per cent year-on-year (YoY) jump in its net profit at Rs 141.2 crore for the first quarter of fiscal 2025 (Q1FY25). India’s leading local search engine company had posted net profit of Rs 83.4 crore in the same quarter last fiscal.

The stock surpassed its previous high of Rs 1,162.65 touched on April 30, 2024. It was quoting at its highest level since July 2015. The stock had hit a record high of Rs 1,894.70 on August 5, 2014.

At 09:40 am; Just Dial was trading 14 per cent higher at Rs 1,178.55, as compared to 0.25 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped over 15 times with a combined 4.03 million shares changing hands on the NSE and BSE.

In the June quarter, Just Dial’s operating revenue grew 13.6 per cent YoY at Rs 280.6 crore.  Earnings before interest, taxes, depreciation, and amortization (Ebitda) stood at Rs 80.6 crore, with healthy Ebitda margin of 28.7 per cent. Ebitda margin witnessed 1,389 bps YoY and 261 bps quarter-on- quarter (QoQ) expansion, led by topline growth and cost efficiencies, both on employee costs and other expenses.

Paid campaigns of the company increased by 1.4 per cent QoQ & 7.9 per cent YoY to 591.7K while average pricing per paid campaign expanded by 2.4 per cent QoQ to Rs 4,742. The cash & investments as on 30 June 2024 stood at Rs 4,755.5 crore, up 14.3 per cent YoY.

According to ICICI Securities, Just Dial reported strong numbers in the quarter with a growth of 13.6 per cent in revenues on the back of higher paid campaigns (+8k campaigns during the quarter) along with an increase in the price per paid campaign.

The margins improved significantly during the quarter due to operating leverage coupled with cost control. The cash balance now stands at ~55 per cent of the market capitalisation of the company; it is yet to decide on the utilisation/distribution of its cash balance. We maintain a positive view on the company, the brokerage firm said in a note.

Meanwhile, the management mentioned that the board is considering various avenues such as dividend, buyback or any other means to ensure tax efficient distribution of 100 per cent (or higher) of the company’s annual profits or incremental cash generated to shareholders. At CMP, the yield on payouts could be more than 6 per cent assuming full distribution of FY25 PAT or FCFF plus other income, said analysts at JM Financial Institutional Securities.

While collections growth was muted at 5.4 per cent YoY, the management attributed it to general elections in April-May and indicated a sharp recovery in trends in June. “We conservatively build revenue growth of 13.5 per cent over the medium term vs. the management target of above mid-teens. We reiterate that EBITDA growth in FY25 could be very robust at c.60 per cent YoY, as full impact of the recent margin expansion is yet to come in the base,” the brokerage firm said with ‘Buy’ rating on the stock and target price of Rs 1,300 per share.