Just Dial, Two Peas in a Pod
3 min read
At some point in our lives, everyone must have used Yellow pages book for contact details but Justdial took everything online from providing address and contact details of business around the country. Justdial, HQ in Mumbai was founded by Venkatachalam Sthanu Subramani Mani in the year 1996.
V S S Mani in his initial days worked as a salesperson in a Yellow page company and in UDI for 2 years. He first ventured with his launch ‘Askme’ in 1989 which failed due to low usage of phones but his determination kept him going which made him start Justdial (JD)
JD has been funded by 6 investors majority being from Nalanda Capital and Sequoia Capital. It went Public in 2013 and raised fund Post-IPO equity round in Jan 2016. Apart from providing address and contact details, JD had expanded its base with targeted campaigns, selling structured data to businesses and mobile apps. Earlier in July 2020, JD had announced a buyback of 31,42,857 Lakh shares which would represent 4.84% of the total number of equity shares of the paid-up equity share capital valued at Rs 700 per equity share for an aggregate amount of Rs 220 Cr
- Post buy back promoters stake dipped from 33.44% in Mar’20 to 32.95% on Sep’4 2020 after which they bought from the open market taking their current stake at 35%
JD in Q1 FY 2021
- Net profit- Rs 83.3 Cr, a hike of 45.5% from Rs 57.2 Cr in Q1 FY20
- Operating Revenue- fell by 32.4% YoY from Rs 240 Cr to Rs 162.4 Cr, QoQ also fell by 30.9%
- Net profit margin increased to 51.3%
- No of Unique Visitors (Mobile, Desktop/Pc, voice) also dropped by 35.9% to 100 M from 156 M
Most of the expenses of the operating revenue came from Employee costs (60.9%) and ESOP( 5.4%) in Q1 FY21. Because of these reasons it had reduced to 8k employees in Q1 FY 21 from 9k in Q4 FY 20.
- Sacking of employees was done mainly from telemarketing, marketing and JDA/cold calling segments.
JDs stock price was down by ~35% in past 1 year though it has rallied from its lowest in Mar’20 to 60% in Oct’20.
- However, in past 17 trading days (since Sept 25), the price has zoomed by 67% after its promoter and director, Anita Mani acquired more than 1% stake in the company through open market which took the her holdings to 3.12% from previous 2.02%
- Mrs. Mani purchased 679,677 equity shares of JD for Rs 25.33 Cr at an average price of Rs 373/share
JD is all set to launch its new B2B (Business to Business) market place called JD Mart. JD Mart will be in direct competition with country’s oldest e-commerce platform IndiaMart, which has not been challenged by anyone for past 24 years
- With this move by JD, global investment bank UBS has raised the target price of JD from Rs 640 to Rs 800
For the launch of JD Mart, JD is planning to spent $15 M for marketing, branding and hiring which is almost equal to the money spent by the company on advertising and promotion in last 2 years combined.
JD Mart is set to work on the same payment model as that of IndiaMart
- A ‘Freemium’ model where subscription is free but leads are chargeable and it is followed by a charged subscription model for premium
IndiaMart in FY 19-20
- M. cap- Rs 14,500Cr
- Revenue from operations- Rs 623 Cr
- Net profit- Rs 146.2 Cr
IndiaMart has over 6 M sellers and 107 M buyers and 150,000 paid subscribers. “If you can’t find something on IndiaMart, you won’t find it on Internet”, Dinesh Agarwal in one of his interviews
Will Just Dial’s JD Mart entry into the wholesale market be a threat to IndiaMart?
