Citi has maintained its ‘Sell’ rating on Just Dial, lowering the target price to ₹1,075, which indicates an 18% downside from the current market price of ₹1,309. Despite revenue growth of 9% YoY and EBITDA growth of 68% YoY (2% QoQ) in Q2, the company missed estimates by 2% and 6%, respectively. However, profit after tax (PAT) outperformed estimates by 27%, driven by higher other income.
The net addition of paid campaigns grew by 7,000 (1% QoQ and 7% YoY), and realization growth was up by 2% YoY, but both metrics reflected the slowest growth since Q1FY23. On a positive note, user traffic saw a sharp recovery, growing 15% YoY, compared to 6% in the previous quarter, which could support future campaign growth and better monetization.
Citi has raised its EBITDA estimates by 10-13% for FY25/26E, based on the recovery in traffic growth. However, the brokerage remains cautious and will monitor the sustainability of these trends before potentially adopting a more constructive outlook.
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