Analysts at Kotak Institutional Equities have upgraded local search engine company Just Dial Ltd to a ‘buy’ rating and expect a higher 26% upside to the stock as its revenue reached pre-Covid levels. Shares of Just Dial surged by 4.34% to touch a high of ₹759.60 per share on BSE following the bullish call by analysts.

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Brokerage Kotak Institutional Equities upgraded the target price for Just Dial to ₹920 per share against ₹875 per share earlier, implying a potential upside of up to 26% against 24% earlier. The brokerage also raised the FY2024–26 earnings per share (EPS) estimate by 17–19%.

In a note, the brokerage mentioned that a cash balance of ₹4,280 crore on Just Dial’s books continues to provide downside support while revenue and margin normalisation continues.

“2QFY24 revenues have managed to reach back to 2QFY20 levels, but EBITDA is still 7.7% lower than 2QFY20 levels,” Kotak mentioned.

The average realisation has already reached pre-Covid levels, it stated.

It also noted that the company has scaled down progress on transaction-based platforms such as JDXperts and JDShopping due to a lack of clarity on unit economics and/or business models and some cannibalization of subscription packages for SMEs.

Reliance Retail Ventures-owned company Just Dial last week reported a 27% year-on-year growth in revenue to ₹260.6 crore for the July-September quarter of FY24.

Its operating profit or earnings before interest tax depreciation and amortisation (EBITDA) surged by 186.3% year-on-year to ₹48.8 crore, while net profit also jumped 37.5% Y-o-Y to ₹ 71.8 crore.

Traffic on the platform also rose by 9% to 171.7 million users in the second quarter of FY24.

Just Dial shares are trading 2.73% up at ₹747.80 on BSE at 12.41 PM.

Just Dial Ltd provides local search-related services to users in India through multiple platforms such as websites, mobile sites, mobile apps, over the telephone and text (SMS). Justdial’s latest version of JD App is an All-in-One App, replete with features like Map-aided Search, Live TV, Videos, Stock quotes, etc.

(Edited by : Ajay Vaishnav)