Synopsis: Just Dial reported steady quarterly growth, announced a major leadership change, and maintained healthy business momentum, while higher spending affected margins. ICICI Securities continues to remain positive on the company’s outlook.
The shares of this small cap company majorly engaged in providing local search-related services to users across India in a platform-agnostic manner rallied over 40 percent, achieving the brokerage target of Rs. 825 per share in just 3 days
With the market capitalization of Rs. 7,050 Crores, the shares of Just Dial Ltd were trading at around Rs. 829 per share which is 13 percent discount from its 52 week high of Rs. 958 per share and is trading at a P/E of 13.5 whereas industry P/E stands at 24.1
Brokerage View:
Just Dial ended the quarter with around ₹60 billion in cash and investments, giving it a strong financial position.Following the company’s July 11 results, ICICI Securities maintained its ‘Buy’ rating on the stock with a revised target price of ₹825, implying around 46% upside from the July 11 closing price of ₹564 per share. . The brokerage believes stronger growth in paid campaigns, better visibility on cash distribution and a smooth leadership transition could support future performance, while slower campaign growth and lack of clarity on cash distribution remain key risks.
Leadership Change Marks a New Phase
Just Dial announced an important management change as founder VSS Mani will step down as CEO and Managing Director on July 31, 2026, after leading the company for 33 years. Dinkar Ayilavarapu, a former Flipkart executive, will take over as CEO from August 1, 2026. The company has also appointed Dinesh Taluja as its new Chief Financial Officer. ICICI Securities believes that better clarity on this leadership transition could improve investor confidence and support the stock over time.
Revenue Growth Remains Steady
The company reported revenue of ₹3.3 billion in Q1FY27, up 9.9% year-on-year and 6.6% sequentially. Growth was supported by a 3.5% increase in paid campaigns and better pricing. Collections also increased 13.7% year-on-year to ₹3.1 billion, showing steady demand from customers. Recurring net profit rose 4.1% year-on-year to ₹1.7 billion, while other income increased sharply due to higher mark-to-market gains on its treasury portfolio.
Business Metrics Continue to Improve
The platform continued to expand during the quarter. Active listings increased 12.9% year-on-year and 2.6% quarter-on-quarter to 56.1 million. Paid campaigns reached 639,000, while user engagement also improved, with ratings and reviews rising to 160 million. Web traffic remained largely flat compared to last year but showed improvement over the previous quarter. Deferred revenue remained stable at ₹5.4 billion.
Higher Spending Impacts Margins
Although revenue remained healthy, profitability came under pressure during the quarter. EBITDA stood at ₹874 million, increasing only 1.1% year-on-year and declining 1.6% sequentially. EBITDA margin fell to 26.7%, down 233 basis points from a year ago, mainly because the company added 267 employees during the quarter and increased its marketing investments to support future growth.
Conclusion:
Just Dial delivered steady revenue growth and improved business activity in Q1FY27, although higher hiring and marketing expenses weighed on margins. The leadership transition marks an important change for the company, with a new CEO set to take charge after more than three decades under the founder. Backed by a strong cash position, improving platform metrics and a positive brokerage outlook, the company appears well placed to pursue its next phase of growth.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
