JUSTDIAL - Just Dial Limited Share Price

The management's outlook highlights a focus on steady growth and operational efficiency. Key points include:

1. Financial Performance: Q1 FY25 revenue grew 13.6% YoY to Rs.280.6 crore, with EBITDA margin improving to 28.7% (up 260 bps QoQ). Operating PBT surged 171.4% YoY, driven by cost controls and productivity gains.

2. Growth Drivers:

   • Core Business: Emphasis on mid-teens revenue growth and sustaining EBITDA margins above 25%.
   • Tier 2/3 Expansion: Non-top-11 cities contribute 40% to campaigns; realizations here (~48-49% of Tier 1) are expected to rise, aiding blended pricing growth (up 5.7% YoY).
   • Traffic & Listings: Quarterly unique visitors reached 181.3 million (+10 million QoQ); total listings grew 18% YoY to 44.9 million.

3. Cost Management: Employee expenses fell 5.3% YoY through productivity initiatives. Other costs declined 2.5% YoY, aided by telecom optimizations (including Jio synergies).

4. Cash Utilization: With Rs.4,755 crore in cash/investments, management is evaluating a dividend policy to distribute 100%+ of annual profits.

5. Margins & Tax: EBITDA margins seen as sustainable; tax rate at 8.2% in Q1 due to treasury reclassification (reversal of deferred tax).

6. Initiatives:

   • SME Tools: Enhanced campaign management and content features (e.g., catalogs) to improve lead quality.
   • Advertising: Focused on digital/SEO-driven traffic; ad spends (~2% of revenue) may rise but remain ROI-focused.
   • Jio Integration: Collaboration on messaging, connectivity, and potential SME ad campaigns (e.g., IPL).

7. Outlook: Steady volume/pricing growth in core business; no immediate push for unprofitable new ventures. Retention rates improved to 60% (from 55%) via monthly payment plans. B2B (25.5% of revenue) and B2C segments growing in tandem.

1. Question: Can you talk to us about the revenue and campaign split in top 11 cities versus rest of India? Why was collections growth only 5.4% YoY this quarter?
Answer: Tier 1 cities (top 11) contributed 58% of revenue and 40% of campaigns. Collections were slower in April-May due to elections but rebounded in June (INR 97"“98 crore in June). Collections should stabilize with traffic growth and deferred revenue rising 11% YoY.

2. Question: Are collections growth trends divergent between top 11 and non-top 11 cities? Will Tier 2-3 realizations catch up further?
Answer: Tier 2-3 realizations are 48"“49% of Tier 1 (up from 45% YoY) and are expected to rise, driven by affordability. Tier 2-3 pricing grew 10%+ YoY versus blended 5.7%.

3. Question: What is the plan for utilizing cash reserves (INR 4,755 crore) and promoter-infused capital?
Answer: Discussions are ongoing to formalize a dividend policy targeting 100%+ of annual profits distributed tax-efficiently. Buybacks are also possible.

4. Question: What are the new initiatives and Jio integration updates?
Answer: Focus on content enrichment (e.g., catalogs for services) and SME tools for lead management. Jio collaboration includes telecom services (messaging, connectivity) and exploring SME ads during events like IPL.

5. Question: Why is ad spend low? Can traffic growth sustain without higher spending?
Answer: Ad spend is optimized for quality over quantity, focusing on high-revenue categories. SEO and platform improvements drive organic traffic. Margins allow for future ad increases if needed.

6. Question: Are current EBITDA margins (28.7%) sustainable?
Answer: Yes, driven by operating leverage and cost controls. Gross margins (~55%) support stability; incremental ad spends may cause minor fluctuations.

7. Question: What is the B2B/B2C revenue split and long-term growth outlook?
Answer: B2B contributes 25.5% of revenue (21"“22% of campaigns). Growth will balance volume and pricing, with B2B having higher monetization potential.

8. Question: How do customer retention rates trend?
Answer: 60% of customers renew into Year 2 (up from 55% earlier). Tier 2-3 retention is slightly better due to lower pricing. Monthly plans and SME dashboards improve retention.

9. Question: Why is the tax rate low (8.2%)?
Answer: Reversal of deferred tax provisions as INR 2,900 crore of treasury shifts to long-term (20% tax vs. 25.2% short-term). Long-term effective tax rate may settle at 18"“20%.

10. Question: What drives EBITDA growth?
Answer: Top-line growth and controlled expenses. Employee costs rose 2.2% QoQ but productivity offsets increments. Tier 2 realization gains and operating leverage will aid margins.