After falling over 11 per cent on Thursday, the share price of Just Dial slipped further over 5 per cent on Friday on the back of lower-than-expected Q2 results.
The share price of Just Dial closed 5.69 per cent down at Rs 806.15 on Friday.
According to Nomura, Justdial reported 2Q results that were below our expectations on both revenues and margins but ahead on PAT, driven by higher other income.”
Just Dial registered a 47.03 per cent surge in its net profit at Rs 46.30 crore for the quarter ended September 30, on rise in income. The company earned a profit of Rs 31.49 crore in the year ago period. Total income from operations rose to Rs 171.27 crore in the July-September quarter of the current financial year from Rs 147.40 crore in the year ago period, the company said in a regulatory filing.
Nomura in a research note said, “2QFY16 revenues of Just Dial stood at Rs 171 crore, up 16 per cent year-on-year lower than our estimate of Rs 180 crore.”
Motilal Ostwal estimated around Rs 1,79.8 crore of revenue in the second quarter ended September 30, 2015.
Overall, since the beginning of the ongoing financial year, the share price of Just Dial plunged 35.67 per cent to Rs 854.75 on October 29. The scrip was at Rs 1,328.60 on April 1. The key benchmark index, BSE Sensex declined 5 per cent during the same period. At current market price, the scrip is trading at 37.95x trailing twelve months price-to-earnings ratio (P/E) against industry P/E of 31.48x, indicating over valuation of stocks.
From investment point of view brokerage houses are looking bullish on the further movement of Just Dial shares, Motilal Oswal in a research report said, “During the second quarter Just Dial launched Search Plus updated app, success of which we believe will be crucial to company’s evolution from ‘Search to Transactions’. The management is yet to unveil its advertising campaign (expected in 2HFY16) which in our view will be an important milestone in increasing its acceptance amongst users. We cut our EPS estimates by 4 per cent and 9 per cent 2015-16 and 2016-17, respectively, due to lower-than-expected growth/margin in base business. We maintained ‘Buy’ rating on Just Dial shares with target price of Rs 1,100.”
Japanese brokerage firm Nomura also maintained ‘buy’ rating on Just Dial shares with target price of Rs 1,800.