[What The Financials] JustDial’s FY20 Growth Could Soften Covid-19 Blow To Ad Revenue

Mumbai-headquartered hyperlocal search engine JustDial has grown its revenues and profits in Q4 FY20 as well as annual level, however, the company hasn’t been immune to the impact of Covid-19 pandemic.

Addressing the analysts during the earnings call, JustDial’s CFO Abhishek Bansal said that traffic was significantly impacted during the lockdown. The company saw its total traffic (unique visitors) for the quarter drop 11.5% on a Q-o-Q level to 138.9 Mn. Explaining the reason for this, Bansal said that March 2020 was a weak performance and from third-week onwards, traffic was significantly impacted. The immediate impact was about 55%, 60% drop in traffic, he added.

He also added that the company spent INR 12.5 Cr on advertising for the quarter, which was significantly reduced and it directly impacted profit. In comparison, the company used to spend INR 18 Cr-INR 19 Cr on advertising per quarter earlier. “For the last few quarters, we have been seeing that there were pressures on monetisation, et cetera. So we consciously decided to optimise our ad spend for those particular categories which yield better results for our particular customers,” he added.

The Numberspeak

Overall, in Q4 FY20, JustDial reported total operating revenue of INR 239.4 Cr, a 1.2% Y-o-Y growth. Overall, the company’s expenses grew to INR 175.5 Cr in Q4 FY20, leading to operating EBITDA of INR 74.4 Cr, a 26.4% Y-o-Y growth. Its net profit stood at INR 76.1 Cr, up 21.6% Y-o-Y in Q4 FY20.

Further, in terms of business highlights, the company’s total active listings stood at 29.4 Mn as on March 31, 2020, an increase of 14.1% Y-o-Y and 2.7% Q-o-Q.

On the annual level, the company recorded revenues of INR 1,092.8 Cr in FY20, a 11% Y-o-Y growth. At the same time, the company’s expenses were INR 741.17 Cr, leading to a net profit of INR 272.3 Cr.

Further, the company has utilised its Covid-19 period to create enriched content for its B2B listing. The company has created a dedicated platform for B2B listings, along with seller details like products, catalogues, prices etc.

“This content would, obviously, help us draw more traffic and subsequently help us monetise the strength of the platform better. We also intend to have a dedicated B2B portal which should get launched shortly. It would be a separate website, separate tabs focused on B2B vendors and products,” Bansal said.

JustDial: Fighting To Be Super App

JustDial was founded in 1994 by VSS Mani. The official website was launched in 2007. With more than 25 verticals on its website, JustDial application was started as a phone-based local directory. The company currently offers services such as bills and recharge, grocery and food delivery, and handles bookings for restaurants, cabs, movie tickets, flight tickets, events and more.

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 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.

Later in 2017, JustDial also introduced JD Pay, a unique solution for quick digital payments for its users and vendors. JustDial claims to have branches in 11 cities across India with an on-ground presence in over 250 Indian cities covering more than 11K pincodes. JustDial has recently launched an all-in-one version of its application with features like map-aided search, live TV, videos, news and real-time chat messenger.

Getting Back To Pre-Covid Levels

Bansal explained that for April, the company’s traffic fell 49% compared to pre-Covid levels, but May had been an improvement, with traffic being 65% of pre-Covid levels. “So for the month of April and May, whatever new revenue that we were able to pick up, yes, the ticket size was lower. But I think that over the long run, once collection starts coming back to pre- Covid levels, realisations, by and large, should be similar to what we had so far,” Bansal added.

The company also had a relook at its expenses to deal with Covid-19 uncertainty by cutting discretionary costs. In April 2020, the new revenue was impacted by almost 80% as compared to pre-Covid levels. “Ever since we also have payments coming from our past monthly payment customers, we did see collections of about 35% compared to pre-Covid levels, even in the month of April,” he added.

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