Just Dial Q1 Results Review - Clarity Emerging On Cash Redistribution Should Drive Re-Rating: ICICI Securities

ICICI Securities Report

We maintain Buy on Just Dial Ltd. with a revised target price of Rs 1,418 (from Rs 1,260) based on 18 times one-year forward enterprise value/Ebitda (earlier 14 times) multiple as we roll over by six months.

Key risks:

1. No clarity emerging on profit distribution in the near term; and

2. slower-than-expected growth in paid campaigns, listings etc.

In Q1 FY25, Just Dial's revenue growth slowed a tad given a high base. However, cost savings and synergies from the parent organisation helped Just Dial to beat Ebitda margin our estimates.

We expect the B2B business to grow faster than the B2C business, given better monetisation opportunities in the B2B vertical (realisation-led growth).

Management stated that the company was actively evaluating means to distribute incremental cashflows generated from both core operations and treasury income to all shareholders in a tax efficient manner.

For context, cash generated in Q1 FY25 was Rs 1.3 billion, implied run rate of ~Rs 5.5 billion in FY25E. Given the improving visibility of cash utilisation (which has been an overhang for the stock), we think Just Dial is likely to re-rate.

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