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Our view

The performance was weak in the quarter as both revenue and EBITDA declined sequentially. The financial performance continues to be affected by the Covid19 Pandemic that has resulted in financial stress among SMEs.  The outlook for the B2C business remains challenging due to high competitive intensity in the space reflected in stagnant traffic and tepid performance in addition of paid customers over last few quarters. While the launch of the B2B platform is a step in right direction, but it will take time to make its presence felt in the space. We maintain REDUCE Rating with revised target price of Rs 950.

Result Highlights

* Reported revenue of Rs 1,654 mn (sequential decline of 5.8% QoQ, less than estimate), led by 4.3% QoQ decline in the number of paid customers and ~4% decline in average revenue per paid campaign

* The decline in revenue can be attributed to the negative impact of Pandemic on SMEs and rising competition from Google other vertical players.  

* Reported EBITDA loss of Rs 172 mn ( vs EBITDA profit of Rs 345 mn in Q4FY21) due to higher other expenses of Rs 704 mn ( included advertising cost of Rs 500 mn for promoting JD mart.  

* Operationally, the performance was weak as besides decline in the number of paid customers by 4.3% QoQ, total SMEs listing on the platform grew by Just 0.2 mn QoQ to 30.6mn  

* The number of unique visitors declined by 3.9% QoQ to 124 mn. App downloads per day declined to 7,831 compared to 9,614 in Q4FY21.

* The number of employees fell by 1411 (12.6% QoQ) to 9,751.

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