Hyperlocal Search Engine JustDial Reports 26.5% YoY Rise In Net Profit For Q2 FY 18

Mumbai-based hyperlocal search engine JustDial has announced its financial and operating results for the fiscal quarter ending on September 30, 2017. As per the filings, the company saw a net profit of $5.7 Mn (INR 37.5 Cr), claiming a 26.5% Y-o-Y rise for Q2 FY 18. However, the net profit declined by 1.8% in comparison to $5.8 Mn (INR 38.2 Cr) in Q1 FY 18.

Further, as per its earnings release, the company generated a total operating revenue of $30 Mn (INR 194.5 Cr), a 7.9% Y-o-Y and 2.3% Q-o-Q growth from the same quarter last year.

Also, the company reported a rise of 14.7% in cash, equivalents and short-term investments, leading to an amount of  $160.7 Mn (INR 1,045.3 Cr) in Q2 FY18, compared to $140 Mn (INR 912.3 Cr) as on September 30, 2016.

JustDial was founded in 1994 by VSS Mani. The official website was launched in 2007. It is a local search firm that provides both B2C and B2B listings of small and medium businesses across 240 cities in India. The search service is available to users across multiple platforms, such as internet, over telephone (voice) and text (SMS).

In January 2016, JustDial raised $18 Mn (INR 120 Cr) from Singapore-based Private equity investment firm Nalanda Capital. With the investment, Nalanda’s total stake in the company increased by 2% to 7.58%. The other two major shareholders of JustDial are Sequoia Capital and SAIF Partners. Tiger Global, EGCS and SAP Ventures have also invested in the company.

JustDial: Once Valued At $1 Bn; Now Staring Into An Uncertain Future

JustDial opened its IPO in 2013, which at the time was hailed as the biggest issue since Bharti Infratel Ltd’s IPO in December 2012. In 2014, SAIF Partners sold 2.4% stake in JustDial which helped it earn returns of over 30 times in comparison to funds that it had invested. However, over the last one year, the company’s performance in the stock market has been steadily declining.

At its peak, the share price of the local search engine reached $9.5 (INR 619) in March last year, before slumping to $5 (INR 319) in December. The numbers have improved slightly in the last couple of months, with its stock fetching $7.3 (INR 477.95) on the BSE as on Monday (November 6).

Recently, in July, the board approved the search company’s open market buyback proposal. As part of the buyback, which opened on August 9 and closed on September 25, JustDial bought 2.2 Mn of its own equity shares at $5.7 (INR 374.18) apiece, aggregating $12.8 Mn (INR 83.85 Cr) in the process.

In order to get a level playing field with its fellow hyperlocal delivery apps, JustDial also reportedly made a soft entry into India’s ecommerce space in May 2015 through tie-ups with restaurants, grocers, pharmacies and electronic stores for home delivery. The service started with Andheri in Mumbai and slowly expanded to other areas of the city.

In a bid to further enhance profit, the company also came up with a ‘one-stop’ app in February 2016, with plans to take JustDial global along with its ecommerce model. But despite all efforts, once valued at $1 Bn in 2013, JustDial has still been struggling to tackle competition from its immediate rivals UrbanClap, HouseJoy and LocalOye. At the same time, even biggies like Flipkart (with its one stop app) and Google (Areo) are also stepping ahead to take a bite in the Indian hyperlocal pie.

 To add to its trouble, the company lost its second CTO in a year, RV Raman, in October 2016. Although it reported a 26.5% Y-o-Y growth in net profit in Q2 FY18, the figures slumped in comparison to the first quarter of the current fiscal year. Whether the search engine platform manages to stay afloat amidst increased competition and declining profits is something that will become apparent in the coming months.