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ICICI Securities Report
Just Dial Ltd. grew revenues in-line. 340 basis points QoQ Ebitda margin expansion was ahead of expectations. This was achieved by cutting employee expenses as bottom 10-15% of employees were churned out.
This was aided by implementing automation in various parts of the business which contributed to lower manpower requirements. The annualised churn reduced by 300-400 basis points YoY despite an increase in the proportion of βmonthly' subscriptions aided by low ticket size and auto renewals.
Management believes there is still room for margin improvement. We think that stock could re-rate to 14 times one-year forward enterprise value/Ebitda (earlier 12 times) given the sustained improvement in operating metrics over FY24.
However, meaningful rerating is likely to happen when investors have better clarity on cash utilisation. Maintain Buy.
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