Reality Check: Just Dial gets it right

The stock of local search engine player, Just Dial, has been on a roll, rising over 31 per cent during the last month. The company’s March quarter results were ahead of market expectations. Revenues rose by 10.3 per cent Y-o-Y during the period, after several quarters of single-digit growth. The FY-18 revenues were up by 8.8 per cent during 2016-17. The growth in listings and traffic was healthy. What was especially encouraging was that this growth was driven by mobile visits.

However, there are challenges. It remains to be seen if the company will successfully derive much of its traffic from the internet directly and not indirectly. Paid campaigns need to increase. Finally, there is always a looming threat in the form of heavy competition from Google, as the global giant increasingly sharpens its focus on local searches.

The stock of Just Dial now trades at 27 times its trailing 12-month earnings, and may have priced in much of the good news in the fourth quarter results.


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