Share stories – Just Dial Ltd – ICICI Direct
Just Dial (JDL) began operations in 1996 offering local search services under the Justdial brand. The company generates revenue from advertisers who sign up with JDL on various subscription and paid packages. They pay a fixed monthly or annual fee and can choose from premium and non-premium plans. We believe that the company will be one of the main beneficiaries of a transition from advertising to digital media. This, along with the company’s launch of the B2B platform, will be a key revenue driver for JDL in the long run. This is expected to make the company a formidable player in the revenue-generating B2B and B2C segments, a PAT CAGR of 22%, 21%, respectively, in fiscal year 21-23E.
Justification of the investment
next B2B growth engine
The MSME segment in India is digitally under-penetrated. However, we expect this scenario to change under the impetus of Covid-19. There is now an increased need for digital media to drive business growth. In addition, although the B2B online market has seen an influx of players, the percentage of paying subscribers in total MSMEs is only 1.3%. This represents tremendous room for improvement for existing and new players. We believe that JDL’s B2B platform, JD Mart, has the potential to become a significant player in this segment in the future. The company has shown a strong commitment to the new platform, committing to spend Rs. 100-110 crore on branding and awareness, free leads and recruiting leaders. JDL also plans to provide end-to-end solutions such as logistics, financing, insurance and payment facilities to improve customer loyalty. This will also allow the business to have two sources of long term income, viz. subscription income and transaction income. Apart from these initiatives, JDL currently has 7-8 million listings in the B2B segment. We believe the company can leverage this for cross-selling and upselling. This, together with JDL’s large sales force (~ 8000) makes it well positioned to capture the booming B2B market and become a significant player in this segment.
B2C improves with easing blockages
We expect revenues to improve with the easing of lockdowns and increased digital penetration. In addition, the company also encourages the download of the JD app by providing JD money against the download and referrals. We believe that these initiatives, coupled with improved fulfillment and increased digitization, will drive B2C activities in the longer term.
For more details, click on the link below: Link to the report
Shares of JUST DIAL LTD. was last trading on BSE at Rs.972.2 from the previous close of Rs. 966.6. The total number of shares traded during the day was 77,788 in more than 4,011 trades.
The stock hit an intraday high of Rs. 983.75 and an intraday low of 955.9. The net turnover during the day was Rs. 75,485,982.