Edelweiss is bullish on Just Dial has recommended buy rating on the stock with a target price of Rs 650 in its research report dated June 14, 2018.
Edelweiss' research report on Just Dial
Our recent interaction with Just Dial’s (JD) management reinforces our confidence in the company’s bright prospects. Key takeaways are: 1) management is confident of improvement in revenue growth led by rising collections; 2) the company is mulling appointment of JD resellers to enhance penetration without adding feet-on-street; 3) operating leverage is envisaged to boost EBITDA margin, but FY19 advertising spends are likely to be higher than FY18; and 4) although focus is on monetising core search operations, management is investing in JD Omni & Search Plus with an eye on long-term growth. While we maintain our target multiple, we believe strong user engagement matrix will accelerate revenue growth and could warrant a rerating going ahead.
Outlook
We revise up FY19E and FY20E revenue/PAT 3.6%/6.1% and 5.5%/10.1%, respectively, to factor in stronger revenue growth. Maintain ‘BUY’ with revised target price of INR650 (INR590 earlier).
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