Just Dial report

1. What is making investors nervous about Just Dial?
Just Dial posted Q2 results with net profit margin up by 9% which was below the average estimates. The EBITDA margin was down for Just Dial YoY mainly because of the increase in staffing costs as the organization expands its business. The EBITDA margins made Investors slightly nervous which was evident in the profit booking after results. Investors are also cautious of the funds that the company is raising which could affect their net profits further due to rise in Interest expense
Some experts say that the company is going through a transition as they are moving into a different business segment altogether as opposed to being a repository of information?
Another factor that is making Investors cautious is the plans that Just Dial has made to move into the E- commerce segment. This is a very competitive segment with quite a few established players and lot of other players entering the segment at fast pace. Investors would therefore may wait and monitor the progress of Just Dial in this segment. Investors will also keep a close eye on how the business plans of Just Dial in UK and UAE turns out.
What is your call on the stock? Should investors book profits and exit stock?
Just Dial enjoyed a good growth over the last one year which is evident from the movement of its stock price. However, their expansionary business plans are making Investors cautious and more selling could come in the stock after the surge over the last few months. Just Dial is a good long term stock for Investors but it would be better to buy on dips rather than at current levels