JUSTDIAL - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 05 Nov 25, 7:43 am

Investment Rating: 3.6

📊 Justdial offers value-driven potential with low P/E and PEG ratios, but weak technicals and declining profitability suggest caution. Ideal entry zone: ₹720–₹740.

🔷 Positive

• 📉 Stock P/E of 11.5 is significantly below industry average (28.7), indicating undervaluation.
• 📊 PEG ratio of 0.08 suggests attractive pricing relative to growth.
• 📉 Debt-to-equity ratio of 0.02 reflects a strong balance sheet.
• 📈 EPS of ₹66.8 supports earnings strength.
• 📈 DII holding increased by 0.25%, showing domestic institutional confidence.

⚠️ Limitation

• 📉 ROE (6.18%) and ROCE (7.11%) are modest, indicating average capital efficiency.
• 📉 Quarterly PAT dropped 22.5% from ₹160 Cr to ₹119 Cr, raising concerns on earnings consistency.
• 📉 MACD at -13.9 and RSI at 35.8 suggest bearish technical momentum.
• 📉 Current price below DMA 50 and DMA 200 reflects weak trend support.
• 📉 Dividend yield of 0.00% offers no income for long-term holders.

📉 Company Negative News

• 📉 Q2 FY26 earnings missed expectations, with a 22.5% YoY drop in net profit despite steady revenue growth

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• 📉 FII holding declined by 0.56%, reflecting cautious foreign sentiment

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📈 Company Positive News

• 📈 Net profit jumped 114% YoY in Q2 FY25 to ₹154 Cr, driven by cost optimization and digital expansion

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• 📈 Subsidiary of Reliance Retail Ventures, offering strategic backing and long-term growth visibility

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🌐 Industry

• 📲 Interactive media and services sector benefits from rising digital adoption and local search demand.
• 📈 Industry P/E of 28.7 reflects moderate optimism for scalable tech platforms.

✅ Conclusion

• 📌 Justdial is a value-oriented digital platform with strategic backing and improving fundamentals.
• 💡 However, technical weakness and earnings volatility suggest waiting for a better entry point.
• 🎯 Ideal entry zone: ₹720–₹740 based on support levels and valuation comfort.
• ⏳ If already holding, maintain for 2–4 years to benefit from digital expansion and cost efficiencies.
• 🚪 Exit strategy: Consider partial exit near ₹1,150–₹1,180; reassess if ROE/ROCE stagnate or profit growth remains inconsistent.

Sources

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