Just Dial shares surged on Thursday in a comeback after two days of losses. The stock of search and discovery firm Just Dial jumped as much as 13.7 percent to Rs 924.5 apiece on BSE as brokerage houses turned positive on the company's growth initiatives that include adding a transaction layer to its business model.
Around noon, Just Dial shares were trading 13.2 percent higher at Rs 920.5 apiece on BSE.
UBS maintained a 'buy' rating on Just Dial with a target price of Rs 1,350, which suggests a 66 percent upside from Wednesday's closing price. The company's move to ramp up its sales network is a key positive for the stock, the brokerage said.
In an investor presentation on Tuesday, the company outlined a future strategy owing to transfer of ownership. Just Dial recently launched a B2B marketplace platform, JD Mart, aimed at enabling manufacturers, distributors, wholesalers and retailers to become internet-ready in the post-COVID era, get new customers and sell their products online. It has also initiated transaction-oriented services for its users.
Earlier that day, Just Dial reported a net profit of Rs 19.4 crore for the December quarter, down 61.2 percent on a year-on-year basis. The company's total income came in at Rs 187.4 crore for the third quarter of the current financial year, as against Rs 199.9 crore for the corresponding period a year ago.
Just Dial's total operating revenue stood at Rs 158.9 crore, down 6.3 percent compared with the year-ago period though up 1.9 percent sequentially.
Last year, oil-to-telecom conglomerate Reliance Industries' retail arm, Reliance Retail Ventures, acquired the sole control of Just Dial.
What brokerages say
UBS
The brokerage said Just Dial's move to ramp up its sales network is a key positive for the stock. The company has aggressive plans in the B2B and B2C segments with support from Reliance Industries, according to UBS.
The brokerage, however, reduced its earnings per share (EPS) estimates for Just Dial for FY22, FY23 and FY24. UBS cut the EPS estimate for the current financial year by 12 percent to factor in the impact of a third wave of the pandemic. It trimmed its FY23-FY24 EPS estimates by 5-6 percent.
Citi
The brokerage continued with a 'neutral' rating on Just Dial with a target price of Rs 825. Just Dial's quarterly performance was below estimates and highlighted several challenges for the company, according to Citi.
Just Dial's progress on new initiative such as JD Mart is slower than anticipated, though the management has signaled its intent to purse a more aggressive growth strategy, the brokerage said.
Citi lowered its FY23 and FY24 EPS estimates for Just dial by 14 percent and 10 percent respectively.
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