JUST DIAL LTD. cmp (1140-00)

                                                                    JUST DIAL LTD
 
SECTOR:       INTERNET & NEW MEDIA
 Local search continues to perform well
Search Plus value proposition not yet priced in

Management’s commentary• Search Plus launch in 4Q/1QF: Management indicated that the commercial launch ofSearch Plus would happen in the later part of 4Q or early 1Q.
Advertising spend for the launch has not been firmed up yet by management, although it could be USD15-20mn
if the company decides to go for a big launch. We build in INR250mn for additional advertising spends over 4Q-2QFY16F.
• Local search expansion continues: JUST is seeing good traction in its expanding towards Tier 2 and Tier 3 cities. Tier-2 and Tier-3 contribute 10.5% of revenues.
Approximately 20% of paid campaigns are premium listings and roughly 42-45% of revenues come from these listings, as per management.• Margins to expand: Outside of the advertising spend for the commercial launch of Search Plus, management indicated that adjusted EBITDA margins should see an increasing trend.
• Mobile usage increases: The user traffic on mobile has exceeded that on desktop, and more than 35% of search requests come from mobile platform. 
Overall the Just dial app has been downloaded in excess of 5.25mn with a daily download rate of 10- 12,000.
• Cash: The company has INR7.4bn of cash as of 3Q which is the same level as 2Q on account of the INR300mn paid for acquisition of land in Bangalore.
• Headcount: Management anticipates headcount addition of ~1000 in FY15F and similar increases for the next two years.

Progress on Search Plus offerings largely on track Three services have been added on Search Plus - online recharge, movie ticketing and deals. 
Currently 23 Search Plus services are live on the website, while on the mobile app platform 15 of these are live on Android and 14 on iOS.
The monetisation of Search Plus will start by 2H15, and revenues will be material by CY16/17, according to management.

FY15F - FY16F-  FY17F-  FY18F-  FY19F
Revenue (INR mn) 6,024-  8,049- 10,396- 13,526 -17,795
growth (%) 31 -34 -29- 30- 32
Adj. EBITDA margin 31.6%- 33.9% -35.8% -36.6% -38.4%
Adj. PAT (INR mn) 1,404- 1,855- 3,326- 4,165- 5,562
growth (%) 16 -32- 79- 25 -34
Adj. EPS (INR) 19.9 - 26.3-  47.0  -58.7 - 78.4
growth (%) 17-  32 - 79-  25 -34