JUSTDIAL - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 20 Dec 25, 07:05 am

Investment Rating: 3.2

📊 Analysis: Just Dial shows valuation comfort with a low P/E of 10.9 compared to industry average of 30.1. EPS of 66.8 ₹ supports earnings visibility, and debt-to-equity at 0.02 indicates a strong balance sheet. PEG ratio of 0.07 suggests undervaluation relative to growth. However, ROE at 6.18% and ROCE at 7.11% are modest, limiting compounding potential. Dividend yield is 0.00%, offering no income support. Quarterly PAT declined from 160 Cr. to 119 Cr., raising concerns about earnings stability. Technical indicators (RSI 32.2, MACD negative) show bearish momentum, with price trading below both 50DMA and 200DMA. Overall, the stock is a moderately attractive candidate for long-term investment, but requires cautious entry.

💡 Entry Zone: Ideal accumulation range is between ₹700 – ₹740, closer to the 52-week low, offering valuation comfort and technical support.

📈 Exit / Holding Strategy: If already holding, maintain a medium-term horizon (2–3 years) provided ROE improves above 10% and earnings stabilize. Exit partially near ₹1,050 – ₹1,090 (previous highs) or fully if profitability stagnates. With no dividend yield, holding is justified only for growth potential. Monitor quarterly PAT and institutional flows closely.

Positive

• ✅ P/E of 10.9 is far below industry average, offering strong valuation comfort.
• ✅ EPS of 66.8 ₹ supports earnings visibility.
• ✅ PEG ratio of 0.07 indicates undervaluation relative to growth.
• ✅ Debt-to-equity at 0.02 reflects strong balance sheet discipline.

Limitation

• ⚠️ ROE (6.18%) and ROCE (7.11%) are modest, limiting compounding potential.
• ⚠️ Dividend yield 0.00%, unattractive for income-focused investors.
• ⚠️ Quarterly PAT decline from 160 Cr. to 119 Cr. indicates earnings pressure.
• ⚠️ RSI at 32.2 and negative MACD suggest weak technical momentum.

Company Negative News

• 📉 Quarterly profit variation -22.5% highlights earnings volatility.
• 📉 FII holding reduced by 0.56%, showing foreign investor caution.

Company Positive News

• 📈 DII holding increased by 0.25%, showing domestic institutional confidence.
• 📈 EPS of 66.8 ₹ reflects earnings visibility despite sector challenges.

Industry

• 🏗️ Industry P/E at 30.1, much higher than Just Dial’s 10.9, highlighting undervaluation.
• 🏗️ Digital services demand supported by online search, listings, and SME adoption, though competition remains intense.

Conclusion

🔎 Just Dial is a moderately rated investment with strong valuation comfort and low debt, but modest efficiency metrics and earnings volatility limit compounding potential. Best suited for cautious investors who can accumulate near ₹700–₹740 and hold for 2–3 years, while monitoring profitability trends and institutional flows. Current price offers fair entry, but patience for stability in earnings is advised.

Would you like me to extend this into a peer benchmarking overlay with Info Edge, Indiamart, and Yatra Online to compare valuation comfort and sector positioning?