Reduce Just Dial Ltd For Target Rs.850 - Yes Securities
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Business performance was adversely impacted due to continued impact of 2nd covid wave
Our view
Overall, the performance was below expectation both in terms of financial and operating metrics as the B2C segment continues to face high competition from Google, Facebook and other vertical and horizontal players. We expect revenue to grow at CAGR of 18.1% over FY22E‐FY24E with average EBITDA margin of 22.5%. Trades at valuation of PE of 18.7x on FY24E EPS. We maintain REDUCE on the stock with revised target price of Rs 850 /share.
Result Highlights
* Reported revenue of Rs 1,560 mn( down 5.7% QoQ) led by 4% QoQ decline in the number of paid campaigns to 430.7k as MSMEs continue to face the adverse impact of 2nd Covid wave, adversely impacting the financial performance of the company and with gradual recovery from July’21
* Reported EBITDA of Rs 159 mn,( below estimate on account of lower revenue in the quarter) compared to EBITDA loss of Rs 172 mn in Q1FY22.
* PAT was boosted by higher other income of Rs 356 mn(22% of sales) on account of higher cash and equivalents with the company, which increased from 15.3bn to Rs 37.7 bn QoQ, led by fund infusion by Reliance Retail.
* Total active listings grew by 0.4 mn QoQ to 31 mn. The number of salesforce team declined by 110 QoQ to 6,825. Number of paid campaigns declined by 7.1k QoQ to 430.7k.
* On positive note, the total number of unique visitors grew by 20% QoQ to 149.5mn. Mobile site and Apps continues to drive the traffic growth(with 84% of traffic share)
Valuation
The stock trades at stretched PER of 18.7x on FY24E EPS. The B2C segment continues to be adversely impacted by 2nd covid wave; while B2B segment is still in nascent phase. We rollover to FY24E estimates and value the stock with DCF based target price of Rs 850/share.
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