Buy Just Dial; target of Rs 850: ICICI Securities

Moneycontrol • 11 days ago

Original source

Key Investment Pillars

  • Just Dial's revenue growth accelerates to 13.1% YoY in Q2FY27, driven by a 7.5% YoY increase in revenue per paid campaign and 5.2% YoY growth in paid campaigns.
  • EBITDA margin contracts 228bps YoY to 26.4% due to higher advertising spends and investments in AI-led capabilities, automation, and B2B expansion.
  • Net paid campaign additions rebound to ~17k QoQ, with active listings growing 12% YoY, indicating improving advertiser traction.
  • Collections, including monthly ECS, were INR 3.3bn, up 11.7% YoY, with cash and investments at INR 61bn, providing capacity to fund growth initiatives.

Thesis Validation Checklist

Investors should watch for sustained growth in paid campaigns, improvement in margins, and successful integration of AI-led capabilities to validate the investment thesis. Key signals to monitor include: revenue growth trajectory, EBITDA margin expansion, and the company's ability to maintain its competitive position in the market. Risks to the thesis include slowing growth in paid campaigns and listings, and potential delays in cash distribution to shareholders.