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Business Model: Revenue generation from listing fees & subscription packages, On-demand services (JD Xperts), Take rates from B2B platform JD Mart & others.

Just Dial Limited (JD) is a one-of-its-kind listing services player in the Indian market, competing with platforms like Google and Bing. JD Xperts faces competition from The Urban Company, while JD Mart's B2B platform has India Intermesh as a peer. All these businesses have strong tailwinds with low penetration & competitive intensity, hence double-digit growth over the medium term should be easily achievable.

* Given the focus on Tier-II & Tier-III cities, we expect revenues to grow at a CAGR of 16.2% to INR 1,635cr driven by:

- 12.3%/44.9% CAGR growth in the Listings verticals to INR 1,459cr

- 44.9% CAGR growth in the Transactions verticals to INR 176cr

* With operating leverage playing out (due to increasing automation)  we expect gross profits/EBITDA/net earnings to grow at a CAGR growth of 35.7%/42.8%/24.8% to INR 808/631/705cr by FY27E,

respectively.

* Consequently, margins are set to expand with EBITDA% reaching 38.6% (+1,783bps) & net margins expanding to 43.1% (+831bps). Return Ratios RoE & RoCE are set to expand with RoE% reaching 12.4% (+342bps) & RoCE% reaching 7.4% (+407bps). 

Valuation Call: We initiate coverage on the stock for a price target of 2,920 over the next 24 months with a potential upside of 190% from the CMP of 1,008. The cash pile of INR 4,625 cr (54% of the market cap) offers significant comfort.

Risk to our Estimates:

(i) Slower than expected revenue growth of listing services considering the competition

(ii) JD Xperts not garnering traction on expected lines.

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