JUSTDIAL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.0
| Stock Code | JUSTDIAL | Market Cap | 6,110 Cr. | Current Price | 719 ₹ | High / Low | 1,050 ₹ |
| Stock P/E | 10.7 | Book Value | 574 ₹ | Dividend Yield | 0.00 % | ROCE | 7.11 % |
| ROE | 6.18 % | Face Value | 10.0 ₹ | DMA 50 | 740 ₹ | DMA 200 | 821 ₹ |
| Chg in FII Hold | -0.56 % | Chg in DII Hold | 0.25 % | PAT Qtr | 135 Cr. | PAT Prev Qtr | 119 Cr. |
| RSI | 44.5 | MACD | -2.85 | Volume | 1,76,948 | Avg Vol 1Wk | 1,78,644 |
| Low price | 700 ₹ | High price | 1,050 ₹ | PEG Ratio | 0.07 | Debt to equity | 0.02 |
| 52w Index | 5.43 % | Qtr Profit Var | 2.81 % | EPS | 65.2 ₹ | Industry PE | 30.4 |
📊 Analysis: JUSTDIAL shows moderate fundamentals with ROE (6.18%) and ROCE (7.11%), which are below ideal compounding thresholds. Valuations appear attractive with a low P/E of 10.7 compared to industry PE of 30.4, and PEG ratio of 0.07 suggests undervaluation relative to growth. Debt-to-equity at 0.02 is very low, reflecting strong balance sheet stability. EPS of ₹65.2 supports earnings visibility. However, dividend yield is nil (0.00%), limiting passive income. Technicals are weak with RSI at 44.5 and MACD negative (-2.85), showing bearish momentum. Overall, the stock is undervalued but not a strong candidate for long-term compounding due to weak efficiency metrics.
💡 Entry Price Zone: Ideal accumulation range is between ₹680 – ₹710, closer to support levels and below DMA averages, offering margin of safety.
⏳ Exit / Holding Strategy: If already holding, maintain position for 2–3 years, provided ROE/ROCE improve above 10%. Consider partial profit booking near ₹1,000–₹1,050 resistance zone. Long-term investors should monitor profitability trends and institutional activity closely.
Positive
- ✅ Low P/E (10.7) vs industry PE (30.4), indicating undervaluation
- ✅ PEG ratio 0.07 suggests strong valuation efficiency
- ✅ Debt-to-equity 0.02 ensures strong financial stability
- ✅ PAT growth sequentially from ₹119 Cr. to ₹135 Cr.
- ✅ DII holding increased (+0.25%), showing domestic investor confidence
Limitation
- ⚠️ Low ROE (6.18%) and ROCE (7.11%)
- ⚠️ No dividend yield (0.00%)
- ⚠️ Weak technicals with RSI below 50 and MACD negative
- ⚠️ FII holding reduced (-0.56%), showing foreign investor caution
Company Negative News
- 📉 Weak efficiency metrics with ROE and ROCE below ideal levels
- 📉 Bearish technicals with price below DMA 200
Company Positive News
- 📈 PAT growth to ₹135 Cr. shows operational improvement
- 📈 Strong balance sheet with negligible debt
Industry
- 🌐 Industry PE at 30.4, much higher than JUSTDIAL’s valuation
- 🌐 Digital services sector benefits from rising internet penetration and SME adoption
- 🌐 Competitive industry with margin pressures from tech disruption and new entrants
Conclusion
📌 JUSTDIAL is undervalued with strong balance sheet stability but weak efficiency metrics (ROE/ROCE). Long-term investors should accumulate only near ₹680–₹710 for margin of safety. Existing holders may continue for 2–3 years, with partial exits near ₹1,000–₹1,050 resistance zone. Monitor profitability trends and institutional activity for sustained holding.
Would you like me to also prepare a peer benchmarking overlay comparing JUSTDIAL with Info Edge, Indiamart, and Yatra Online to refine the entry/exit logic?