Just Dial : Transcript of Earnings Call on Financial Results (Consolidated and Standalone) for the quarter and year ended March 31, 2024

April 22, 2024

To

BSE Limited	National Stock Exchange of	Metropolitan Stock Exchange
Department of Corporate	India Limited	of India Limited
Services	Listing Department	205(A), 2nd Floor,
Listing Department	Exchange Plaza, Plot no. C/1,	Piramal Agastya Corporate Park,
P J Tower, Dalal Street,	G Block, Bandra-Kurla Complex,	L.B.S Road, Kurla (West),
Mumbai - 400001	Bandra (East), Mumbai - 400051	Mumbai - 400070
Scrip Code: 535648	Scrip Symbol: JUSTDIAL	Scrip Symbol: JUSTDIAL

Dear Sir/Madam,

Sub.: Transcript of Earnings Call on Financial Results (Consolidated and Standalone) for the quarter and year ended March 31, 2024

In continuation of our letters dated April 12, 2024 and April 18, 2024 and pursuant to Regulation 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith the transcript of the Earnings Call held on Thursday, April 18, 2024, at 6:00 p.m. for discussing operational and financial performance of the Company in the quarter and year ended March 31, 2024 and the same is available on the Company's website at https://www.justdial.com/cms/investor-relations/earnings-call-transcripts

We request you to take the above on record.

Thanking You,

Yours truly,

For Just Dial Limited

MANAN	Digitally signed by
	MANAN
YOGENDR YOGENDRA UDANI
A UDANI	Date: 2024.04.22
21:50:55 +05'30'

Manan Udani

Company Secretary

Encl: as above

Just Dial Limited

Q4 FY'24 Earnings Conference Call

April 18, 2024

MANAGEMENT: MR. VSS MANI - MD & CEO

MR. ABHISHEK BANSAL - CFO

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Just Dial Limited

April 18, 2024

Moderator:Ladies and gentlemen, good day, and welcome to the Just Dial Limited Q4 FY'24 Earnings Call. We are joined by Mr. V.S.S. Mani, MD and CEO; and Mr. Abhishek Bansal, CFO from the management team of Just Dial Limited.

At this moment, all participants are in the listen-only mode. Later, we will conduct a question- and-answer-session. At that time, you may click on the raise hand icon to ask a live question. Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhishek Bansal, CFO, Just Dial Limited. Thank you, and over to you, Mr. Bansal.

Abhishek Bansal:Thank you, moderator. Hi, everyone. Welcome to Just Dial's Earnings Call for Fourth Quarter of Fiscal '24. Our operating revenue for the quarter stood at INR270.3 crores, witnessing 16.2% year-on-year growth. This growth is primarily driven by healthier collections, which we have witnessed during the past quarters. Our FY'24 collections have grown by about 17.7% on a year-on-year basis.

Fourth quarter collections stood at a healthy INR305 crores, growing 13.8% year-on-year. In terms of margins, we had robust 26.1% EBITDA margin for the quarter, which represented 334 basis points sequential improvement and about 11.8 percentage points on a year-on-year basis. Absolute EBITDA at INR70.6 crores for the quarter more than doubled year-on-year and grew about 17% sequentially.

Our total employee headcount now stands at about 12,800 employees, and the decline witnessed this year is a result of optimization across both sales and non-sales functions. In non-sales, automation and use of tech has allowed us to reduce manpower dependency for certain tasks. And in sales, we have tried to rationalize some low productivity workforce, and there is focus on better monetization from higher revenue-generating categories and geographies.

Our other expenses have been tightly controlled and witnessed 2% year-on-year decline led by about 12% lesser advertising on a year-on-year basis, and there was optimization of our communication expenses as well. Advertising spend stood at about INR5.6 crores for the quarter. For full year, FY'24 revenue had about 23.5% year-on-year growth, and EBITDA margins have improved to 20.8% from 10.2% the previous year.

Other income stood at INR91.3 crores for the quarter, which was above 22% higher sequentially due to MTM benefits that we had as a result of about 10 basis point decline in bond yields during the quarter. Profit before taxes stood at INR147.3 crores, growing 53% year-on-year and 22% on a sequential basis.

Effective tax rate stood at 21.5%, which is presently on higher side as bulk of our treasury, mark-to-market gains are currently short term in nature. And hence, provisioning for taxes happens at full tax rate. In current year FY'25, part of the treasury approximately INR2,800 crores will shift from short-term bucket. This is a three-year holding, and hence there will be some reversal in tax provisions done so far. So overall tax rate is likely to be lower for FY'25.

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	Profit after taxes for fiscal '24 stood at -- for fourth quarter stood at INR115.6 crores, growing
	about 38% year-on-year. Sequentially, it had about 25.6% growth. Deferred revenue was also
	healthy at INR508 crores, growing about 16% year-on-year.
	Active paid campaigns at the end of the quarter stood at about 584,000 campaigns, which was
	up about 8.4% year-on-year, witnessing the addition of about 16,700 campaigns during the
	quarter. Average realizations have grown 7.2% year-on-year. So growth is coming as a mix of
	both campaign additions as well as increase in realizations. Overall, cash and investments
	stood at INR4,625 crores as on quarter end, growing about 13.7% year-on-year.
	In terms of our traffic, total traffic stood at about 171 million unique users for the quarter,
	growing 7.5% year-on-year. Total listings now stand at 43.6 million, growing 19%. Overall, I
	would term FY'24 as a year of efficiency for us and the business has been able to deliver on
	almost all key operating metrics in a cost-efficient manner.
	We have managed to grow top line this year largely via productivity increase and which is
	what is reflecting in healthy margins as we exit the year. Focus remains on having core
	business deliver top line and profitability growth in a steady manner.
	With this quick update, we shall now open the floor for questions and further discussions.
	Thank you.
Moderator:	Thank you very much. We will now begin the question-and-answer session. The first question
	is from the line of Vivekanand Subbaraman from Ambit Private Limited. Please go ahead.

Vivekanand Subbaraman: Abhishek, first of all, just starting off on the housekeeping questions with respect to the split of traffic across markets, split of paid campaigns and revenue. That's question number one. If you can answer that, then I'll move to the other ones.

Abhishek Bansal:So Vivek, top 11 cities contributed about 58% to our revenues. And campaign-wise, they contributed about 40%, 41%. As far as traffic goes, while I don't have the number handy, but I think Tier 2, Tier 3 cities would have contributed about 55% to our traffic.

Vivekanand Subbaraman: Okay. And as a follow-up, you are now growing your collections on a fairly normalized pace because all this while there was a favorable base as well till maybe most very recently, but now the base is also higher than pre-COVID levels. You had a couple of quarters ago or rather maybe a year ago, you had highlighted the realizable value of collections.

Can you help us with the equivalent number for this quarter, the INR305 crores that has been reported. What is the equivalent number, if I want to compare it versus pre-COVID times when you had lesser number of monthly campaigns?

Abhishek Bansal:So in terms of realizable value and the total collections that we had during the quarter, they were quite similar to each other. And like as you mentioned, while the base definitely has gone up, but in fourth quarter, we still had 14% year-on-year growth in overall collections of INR305 crores. And even for a full year basis, there was about 18% growth to INR1,112

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crores. So yes, there is a -- the base is now normalized, but obviously, endeavor is to grow business sustainably on a sort of 15% plus run rate going forward.

Vivekanand Subbaraman: Right. Okay. So last year, as you collected -- you collected around INR945 crores and you ended the year with revenue of around INR1,043 crores, right? So there was still some growth compared to the collections during the year, I mean around 11% while you reported numbers. So this time, when we think about the FY'25 number, what are the variables that we should think about in looking at forecasting the FY'24 -- FY'25 revenue number based on the '24 collections and also your aspirations, if you would like to discuss that in terms of growth that would be great.

Abhishek Bansal:Okay. So couple of aspects on this. Firstly, the deferred revenue that we had at the end of the year was about INR508 crores, out of which almost 90% would be sort of a current component, which will get accrued as revenue during the year as services are rendered.

Apart from this, there is a component of monthly collections that we receive from customers where we have already signed them up and direct debits happen. So that particular money gets recognized as revenue as and when it comes. And then obviously, there will be the fresh sales that will happen during the year.

So as we stand today, difficult to forecast, just basis today's deferred revenue and my monthly sales, what would be the revenue? But as I mentioned, endeavor is that overall year should have about 15% plus growth in top line, and that is what we are aspiring for.

Vivekanand Subbaraman: Okay. And pressing a bit further on the revenue growth, I see that the contribution of non-top 11 markets have just been going up and up and up, how big is the market, the horizontal classifieds market in these Tier 2 and 3 cities? Can you tell us a bit more about the success that you had in markets outside top 11 cities with some examples because the numbers tell a good story, but it would be nice to hear your narrative on this front.

Abhishek Bansal:	See, by and large, overall, our assessment is that India has about 65 million, 70 million SMEs
	and another, say, 10 million to 15 million are freelancers, such as gym instructor, yoga teacher,
	tennis coach, who are also potential listings for us, so which means 80 million, 85 million
	overall universe, against which my database currently is only, say, half of it at about 43 million
	listings.
	Out of 43 million listings, about 60% of the businesses are in Tier 2, Tier 3 cities. So -- and
	against 43 million listings, if we see the unique number of customers in my paid campaigns
	that are only about 490,000. So that's why there is significant room for business to grow in
	Tier 1 as well as outside Tier 1 cities. Outside Tier 1 cities, my realizations are less than half of
	what I have in Tier 1. So that way, in these particular cities, I have both levers to sign up more
	customers and be able to take price hikes as well.
Moderator:	Thank you. The next question is from the line of Priyank Chheda from Vallum Capital. Please
	go ahead.

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Priyank Chheda:	Hi, Abhishek. Just to continue on the previous aspect and the data which you shed, while the
	growth from the non-top 11 cities has been strong, while -- and as we accelerate that addition,
	our ARPU has been maintained at around INR18,500. How do we read this when -- I mean, is
	there a higher bundle packages, which are getting sold in Tier 2, 3? Or is there a simultaneous
	upscaling and upgradation happening in Tier 1 also?
Abhishek Bansal:	So on ARPU, what we see it on a blended basis. So blended basis, you are right, that INR1,540
	a month or INR18,500 annually has been sort of at the similar level if we compare it, say, 2, 3
	years back. But there, the primary reason is that the share of Tier 2, Tier 3 cities by volume is
	going up. And in Tier 2, Tier 3 cities, whenever we enter a particular geography, we enter at a
	very entry level based pricing.
	So against INR1,540 a month of my blended realization, my Tier 2, Tier 3 is only at about
	INR1,100, which is what lends this tailwind that there can be significant price increases in
	these cities as well because several of these particular cities such as Surat, Baroda, Agra,
	Lucknow, Kanpur, these are no longer cities where an SME cannot afford a listing of
	INR1,500 crores, INR2,000 a month.
Priyank Chheda:	Right. So in that case, the current ARPU by design and mix should attract at the lower side,
	while it's been maintained. So just trying to understand what is driving that maintenance of that
	INR18,500 even at this level.
Abhishek Bansal:	So ARPU has actually grown. So if you see for last quarter, our monthly revenue per campaign
	has increased 7.2% on a year-on-year basis. And that increase was there in both Tier 2, Tier 3
	cities as well as party in Tier 1 as well. And that is led by price increases that we take in these
	particular geographies.
Priyank Chheda:	Got it. So what I was actually coming from the -- is that we were supposed to take price hikes
	from this year from starting April. So, okay, I stand corrected over there. So that's mainly
	because of the price increases. Am I correct?
Abhishek Bansal:	Yes.
Priyank Chheda:	Okay, got it. And Abhishek, can you help me on the growth in B2B business, which we were
	targeting to increase, is that also helping us in terms of growing volumes and ARPU. If you
	can just share some data points around what is the total percentage volume that we get from
	B2B business and revenue.
Abhishek Bansal:	So, for the full year, we had about 23.5% growth in our overall revenues. Against this, both
	B2B and B2C segment had very similar growth rates, just a difference of probably 100 basis
	points or so. So while we had initially been thinking that B2B will grow much faster than B2C,
	but B2C growth also has materialized fairly well, which augurs well for the business because
	that anyway is 3/4 of the overall business.
	In terms of ticket size, B2B tends to have about 10% to 15% higher ticket size versus B2C. So
	volume-wise,campaign-wise contribution of B2B would be around 22-odd percent or so.

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Priyank Chheda:Got it. Just a last question on the workforce addition and you rightly mentioned '24 has been the year of productivity increase. So what are the key strategic interventions that are actually playing out as well as if you can help us some data points on to how much of the listings are being done by using tech, and there was a concept of JD self-serve, what is kind of a revenue that we are accruing from that also will be helpful.

Abhishek Bansal:Sure. So on workforce optimization, so to say, across sales and non-sales, I come to non-sales first. So in non-sales, a lot of work is being done with the use of tech. For example, in case of listings as well as their products and services, we no longer have to rely solely on our manpower to get us that particular content. A lot of content gets generated by a use of technology. For example, images for products or particular merchant might have simply given me a name of a product as a coffee machine. But via AI-generated content, I am able to directly generate those particular images and not relying on any manual task.

So similarly, we sell add-on products such as banners to our customers. So earlier, there was a team that used to coordinate with that particular customer to actually create those particular banners. But now part of the banner creation is automated using just the information we have about that business, we are able to create those banners in an automated manner. So several of these initiatives on non-sales front have enabled us to get better productivity with lesser workforce.

On the sales front, while we did significant hiring in last year and previous year, what we tried to do this year was that the bottom 10%, 20% of the workforce, if they were not yielding desired output, we have tried to replace them with better leading talent, which is what is resulting us in this particular headcount reduction. And overall, my salary expenses also, for example, for last quarter were down about 3%, 4% on a year-on-year basis. So that is what has enabled us to be able to deliver top line growth with relatively lesser manpower. Having said that, we are keeping options open of adding, say, 4%, 5% workforce in the coming year because the fact is that in our country, SMEs still need a great amount of handholding.

On your query around the self-serve model. So what we have done is that we have taken this particular self-serve model live wherein a customer can come and directly sign up for their particular campaign online itself. In the first phase, what this company is enabling us is, it is generating a lot of hot leads for our sales team to prospect.

So the team that used to earlier do cold calling, versus that, they are now working on this particular hot leads data. And over time, this self-serve model will graduate into some percentage of customers converting online and so on. So while there is handholding that is still happening, but the good part is that all these initiatives of enabling self-serve, etcetera, are reducing my manpower dependency.

Vivekanand Subbaraman: Got it. Just on -- for my clarification. So we don't expect any significant price hikes coming up in FY'25 given the base where we are and given the mix that we will evolve going ahead, Am I correct?

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Abhishek Bansal:	No. So price hikes are a continuous process for us. Within price hikes also, there are two types
	of listings that we sell. One is the premium listings. In premium listings, price hikes are
	automatically taken on every monthly and quarterly basis, depending on how traffic is panning
	out in each of the key word geography combinations. So if a customer has signed up with me
	today, and I see that I'm delivering 15% higher inquiries to this customer, I pass on part of that
	15% as price hike when the renewal is due.
	The second is non-premium listings, where customer can pay whatever they want, subject to a
	certain floor price. That floor price, again, we take price hikes at a regular interval depending
	on how that particular geography is performing. So it's not that on a particular date, we take
	price hikes pan India, and we don't take subsequently for the rest of the year. That is not how it
	is. Overall target is that out of my 15%, 16% or whatever revenue growth materializes, half of
	it should materialize from volume growth and rest half of it from pricing increase.
Moderator:	The next question is from the line of Swapnil Potdukhe from JM Financial. Please go ahead.
Swapnil Potdukhe:	So I'd like to start with understanding which particular categories have you seen the additions
	are doing well, and if you can call out some categories, both in B2C as well as B2B.
Abhishek Bansal:	So, Swapnil, category-wise, our revenue base is highly diversified. So no single category
	contributes more than 3% to 4% of the revenues. And in fact, if I just exclude the top 4, 5
	broad categories, then it drops to category contribution being even less than 1%. So when there
	is this particular recovery, it is across the board. Two-thirds of the revenue is service-oriented
	revenue, categories such as pest-control services, spa salons, the entire healthcare pack,
	doctors, dentists, chemists, pathology labs, wedding-related categories such as caterers,
	banquet halls, and photographers.
	So there is a broad growth across the spectrum. In a particular quarter, there could be
	seasonality for a certain category, et cetera, which might impact. But by and large, since
	revenue, as I said, is highly diversified. It's across categories.
Swapnil Potdukhe:	Got it. And any particular reason that we are seeing good growth in the B2C businesses
	because what I understand is like prior to COVID, leave out the COVID period, but prior
	COVID, we used to see some pressures over there. But now we are seeing some bounce back
	over there. Is it just the fact that we are not seeing significant traction over the last 2, 3 years,
	during COVID and now some bit of it is coming back? Or is it like a sustainable thing you see
	the volume growth sustaining at a decent rate, especially in the B2C businesses.
Abhishek Bansal:	So Swapnil, our assessment is that post COVID, SMEs have a far greater realization that they
	need to be present on an online platform such as Just Dial so that they can get discovered and
	they can get new comers. Every business needs new customers.
	Second, the subscription fee that we charge is highly affordable. So the average ticket size of
	INR1,500 per month is, I mean, equivalent to probably a WiFi connection that, that SME
	might be opting to run their particular business. So I think the combination of these factors are

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helping us have this particular growth. And hopefully, it will be sustained as we keep moving forward.

Swapnil Potdukhe: Okay. And in terms of employee rationalization that you did mention about rationalization happening in -- both in sales as well as in non-sales. But, how much more can we expect from here on? I mean -- or the current level is the bottom and here on you instead would have to increase your workforce?

Abhishek Bansal:So as I mentioned earlier, on a continuous basis, endeavor is to automate as many functions as possible, automate as many processes as possible, so that might continue to help us deliver with lesser workforce, but the important part is that in this entire process, I might be reducing my headcount, but I might still be hiring good quality talent.

So the key is not absolute number of headcount, but overall employee expenses. And as I mentioned, on sales, etcetera, we are keeping our options open to add some bit of manpower. That also is subject to productivity increases. So my geographies which are operating at a high productivity level could still be allowed to expand more workforce, but other locations will be expected to sort of improve their efficiencies first.

Swapnil Potdukhe: Got it. And last question is on your margins. So this quarter, we exited at 26% plus, which is very close to our pre-COVID levels of around 28-point something, right? So how much more expansion should we factor in to the model wherein you will be okay with giving up on incremental margins and rather invest on growth. I mean how do you see from an expansion -- margin expansion perspective from the current levels vis-à-vis growth?

Abhishek Bansal:Okay. So the way we look at it is that versus top line growing anything above 7% to 8%, there is operating leverage that kicks in, in the system. My gross margin, which is my revenue less direct sales related costs, is about 54%, 55% or so. And my other expenses, I have been able to control them even flat on absolute terms.

So there is definitely scope for margins to expand further. But at the same time, we would take a cautious call that in case we need to step up our advertising, we would not be averse to do so because higher advertising will result in getting higher traffic, which will aid my monetization in subsequent quarters. So our first target was to hit a 25% kind of level. Now that we are above that particular level, we will see what portion of incremental margins should be deployed in advertising, which again would be in a calibrated manner and rest should flow in through P&L.

Swapnil Potdukhe: Is there any timeline in mind like when will you start your A&P spends or as of now, you're still yet to figure out?

Abhishek Bansal:So there is -- as I said, there isn't a specific time line on which we determine that, okay, now I need to deploy incremental margin on advertising, etcetera. For example, I would want my traffic to grow at least 12% to 15% on a year-on-year basis. If I organically see my traffic growing healthily, then which means that anyway, my customers are getting incremental

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	benefits. And I might continue at my current advertising levels, but if I think that I need to step
	it up, then we would do it at that point of time.
	Majority of the advertising spend anyway is digital in nature at this point of time, which can be
	sort of -- you can start, stop, pause those particular spends at any point of time?
Swapnil Potdukhe:	So just extrapolating that point, you mentioned that you would ideally want your traffic to
	grow 12%, 13% kind of number. But now if you see you're growing 7-odd percent. Isn't it the
	right time to start investing? I mean, I'm just thinking aloud given that you mentioned those
	figures.
Abhishek Bansal:	Yes, definitely. So internally, we are already looking at it. As we enter into summer months,
	traffic tends to have organic pickup itself. So we are very consciously evaluating what kind of
	advertising that we should do.
Moderator:	The next question is from the line of Hemal, who is an investor. Please go ahead.
Hemal:	Congratulations for a good set of numbers. I just wanted to clarify 2 things. One, you said
	you're moving your investments of INR2,800 crores from short to long. Does that mean your
	duration which you guided like 3 years, is that going to go further higher up to 4 or 5 years?
Abhishek Bansal:	Okay. Let me clarify on this. The INR2,800 crores that I mentioned in my opening remarks,
	that will automatically shift from short-term bucket to long-term bucket because that amount
	was deployed sometime in September 2021. So as we go into September, October 2024, it
	would have crossed a 3-year holding period.
	We will not redeem those particular investments. just that accounting wise, as you crossed that
	particular 3-year holding period, you have to recognize cumulative taxes on long-term tax
	slabs, which are lesser than short-term tax slabs. So as a result, there will be a reversal of past
	tax provisions that have been done.
Hemal:	So the effective tax rate in the ballpark would be less than 20% this time around FY'25?
Abhishek Bansal:	FY'25 could be even close to or less than 10% overall.
Hemal:	The effective tax rate.
Abhishek Bansal:	Effective tax rate, so just to give some understanding there. So my deferred tax liability is
	about INR110 crores as on year-end. And against those INR110 crores deferred tax liabilities,
	there will be a reversal of about INR45 crores, INR50 crores for next year. So there will be
	INR50 crores negative tax provisioning in next year, which is what will bring down my overall
	effective tax rate.
Hemal:	My second question is any update on what's happening with Jio or Reliance, any integration
	news that you can share?

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