SUMMARY
Justdial is looking to buyback 31 Lakh shares valued at INR 700 each
It has recorded INR 83.3 Cr ($11 Mn) net profit last quarter, but its operating income fell by 32.4%
The company also downsized its sales department yet its employee cost went up to 60.9%
Mumbai-headquartered hyperlocal search engine Justdial is looking to buyback equity shares worth INR 220 Cr ($29 Mn) in the coming 4-5 weeks, the Mumbai-based company has confirmed this in its BSE listing while announcing its financial results.
The company will be buying back nearly 31,42,857 equity shares representing up to 4.84% of the total number of equity shares of the paid-up equity share capital. Each equity share will be valued at INR 700.
“The buyback is progressing on expected timelines, majority of the required approvals are in place, the record date was July 3, 2020 and the tender offer window is expected to open on August 4, 2020. The buyback is expected to be completed in another 4-5 weeks,” Justdial said. According to the BSE filings, 33.43% of the company is held by promoters, 11.03% by individuals, 19.86% by domestic investors and 35.6% by foreign investors.
Besides this, the company also announced the financial result for the first quarter of 2021, ending in June. It has recorded INR 83.3 Cr ($11 Mn) net profit, noting a 45.5% hike from INR 57.2 Cr (nearly $7.6 Mn at current exchange rate) recorded in Q1 FY2020.
When compared to the INR 76 Cr ($10.15 Mn) recorded in the last quarter of FY2020 between January to March, the company’s increase in profit is 9.6%. In this new financial year, the company’s profit margins have increased to 51.3% YoY and 32.4% QoQ.
Despite the profit, Justdial’s operating revenues have fallen by 32.4% YoY from INR 240 Cr to INR 162 Cr this quarter, whereas the fall is at 30.9% in terms of quarterly growth. Justdial’s profitability was saved by a 147.6% YoY and 101.7% QoQ spike in its other incomes to record INR 76.9 Cr.
Justdial’s BSE filings also highlight that its sales team workforce was reduced by nearly 1K in the first quarter of FY21. In Q4 FY20, it had close to 9K employees in the sales department, while now its strength has been reduced to 8K employees across telemarketing, marketing and JDA/cold calling segments. However, Justdial has spent nearly 60.9% of its operating revenue in employee cost, and 5.4% in employee stock ownership programme (ESOPs).
Justdial was founded in 1996 by a serial entrepreneur VSS Mani. The Mumbai-based company had gone public in May 2013. With more than 25 verticals on its website, Justdial application was started as a phone-based local directory, but later expanded to offer other services including bill payments and recharge, grocery and food delivery, and handles bookings for restaurants, cabs, movie tickets, flight tickets, events and more.
Due to Covid-19 and the resultant lockdown, the company also noticed a decline in the average daily traffic on its platform. In April, the decline was at 48% compared to February, but in March it managed to reduce the fall to 12%. Overall, Justdial’s quarterly unique visitors declined 36% YoY and 28% QoQ to 100 million visitors last quarter. With public places shut and travel restriction, the company also decided to curtail its advertising spends.
