Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Just Dial Ltd (BOM:535648, Financial) reported a 16.2% year-on-year growth in operating revenue for Q4 FY24, reaching INR270.3 crores.
- The company achieved a robust EBITDA margin of 26.1% for the quarter, representing a significant improvement both sequentially and year-on-year.
- Collections for FY24 grew by 17.7% year-on-year, with Q4 collections standing at INR305 crores, a 13.8% increase year-on-year.
- Profit before taxes for Q4 FY24 grew by 53% year-on-year and 22% sequentially, reaching INR147.3 crores.
- Total cash and investments at the end of the quarter stood at INR4,625 crores, growing 13.7% year-on-year.
Negative Points
- The company witnessed a decline in total employee headcount due to optimization across sales and non-sales functions.
- Advertising expenses were tightly controlled, resulting in a 12% year-on-year decline, which could impact future growth.
- The effective tax rate stood at 21.5%, which is on the higher side due to short-term nature of treasury mark-to-market gains.
- Despite strong growth in listings, the average revenue per user (ARPU) has remained relatively flat, indicating potential challenges in monetization.
- There is a significant dependency on Tier 2 and Tier 3 cities for traffic, which may have lower revenue realizations compared to Tier 1 cities.
Q & A Highlights
Q: Can you provide a split of traffic across markets, split of paid campaigns, and revenue?
A: Top 11 cities contributed about 58% to our revenues and around 40-41% of campaigns. Tier 2 and Tier 3 cities contributed about 55% to our traffic. - Abhishek Bansal, CFO
Q: What is the equivalent realizable value of collections for this quarter compared to pre-COVID times?
A: The realizable value of collections during the quarter was similar to the total collections. Despite a higher base, we had a 14% year-on-year growth in collections to INR305 crores. - Abhishek Bansal, CFO
Q: What should we consider when forecasting FY25 revenue based on FY24 collections?
A: Deferred revenue at the end of the year was INR508 crores, with 90% expected to accrue as revenue during the year. We aim for a 15%-plus growth in top line for FY25. - Abhishek Bansal, CFO
Q: How is the market for horizontal classifieds in Tier 2 and 3 cities?
A: India has about 80-85 million SMEs and freelancers, with 60% of our 43 million listings in Tier 2 and 3 cities. There is significant room for growth in these areas. - Abhishek Bansal, CFO
Q: How do you maintain ARPU despite growth in non-top 11 cities?
A: ARPU has grown 7.2% year-on-year. In Tier 2 and 3 cities, we enter at entry-level pricing, but there is room for price increases. - Abhishek Bansal, CFO
Q: What are the key strategic interventions for workforce optimization?
A: We use tech for non-sales tasks and optimize sales teams by replacing low productivity workforce with better talent. We may add 4-5% workforce in the coming year. - Abhishek Bansal, CFO
Q: What is the growth outlook for B2B business?
A: Both B2B and B2C segments had similar growth rates. B2B has about 10-15% higher ticket size than B2C, contributing around 22% by volume. - Abhishek Bansal, CFO
Q: What is the plan for advertising spend and its impact on margins?
A: We aim for traffic growth of 12-15% year-on-year. If needed, we will step up advertising in a calibrated manner to support this growth. - Abhishek Bansal, CFO
Q: What is the effective tax rate expected for FY25?
A: The effective tax rate for FY25 could be close to or less than 10% due to the shift of INR2,800 crores from short-term to long-term investments. - Abhishek Bansal, CFO
Q: What are the strategic integrations with Jio or Reliance?
A: We are working on integrating our platforms with JioAds to enable hyper-local advertising for SMEs, which will result in revenue sharing. - Abhishek Bansal, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
