Buy Just Dial For Target Rs. 760 - ICICI Direct
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Strong paid campaign addition likely to continue
About the stock: Just Dial (JDL) generates revenues from advertisers on various subscription and fee-based packages
* Reliance Retail Ventures now holds a 67% stake in JDL
* JDL’s launch of B2B platform will be a key revenue driver in the long run
Q3FY23 Results: JDL’s revenue rebound continued in Q3FY23.
Revenues grew 7.8%QoQ to | 221.4 crore
* Paid campaigns grew 3.6% QoQ while realisation grew 4.1% QoQ
* Adjusted (ex-Esop) EBITDA grew ~380 bps QoQ to 13.3% to | 29.4 crore
What should investors do? JDL’s share price has grown by ~1.1x over the past five years (from ~| 573 in January 2018 to ~| 643 levels in January 2023)
* We maintain our BUY rating on the stock
Target Price and Valuation: We value JDL at | 760 i.e. 23x P/E on FY25E EPS.
Key triggers for future price performance:
* Continued increase in paid campaigns as well as realisation growth
* Ramp up in sales team is expected to drive revenue growth in both B2B and B2C businesses
*JDL will be a key beneficiary of this shift of advertising to digital medium and underpenetrated MSME (B2B) segment. The paid subscribers as a percentage of total MSME is just 1.5%
* JDL’s B2B and B2C platforms are well placed to capture this demand leading to revenue CAGR of 23% in FY22-25E
Alternate Stock Idea: Apart from JDL, in our IT coverage we also like Affle.
* Key beneficiary of digital advertising spend
* BUY with a target price of | 1,350
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