Just Dial Ltd. shares have been under pressure after the company reported its quarterly financial performance for Q3 FY25, which showed a 15% quarter-on-quarter decline in net profit despite a solid 42.7% year-on-year growth. As of 10:00 am on January 13, the stock was trading at ₹954.90, down by 7.75% from the previous trading day.

Key Financial Highlights for Q3 FY25

Just Dial's net profit for Q3 FY25 stood at ₹131.3 crore, reflecting a 42.7% increase from the corresponding quarter in the previous year. This marked a significant improvement in profitability on a year-on-year basis. However, the company's net profit saw a nearly 15% decline from ₹154 crore reported in the previous quarter (Q2 FY25). The decline in profits on a quarterly basis has caused concern among investors, which is reflected in the stock's downward movement.

In terms of revenue, the company posted a 8.4% year-on-year increase to ₹287.3 crore, a positive indicator of growth in its operations. This is up from ₹265.5 crore reported in Q3 of FY24.

EBITDA and Margins

One of the bright spots in the company's Q3 results was its EBITDA, which surged to ₹86.6 crore, marking an impressive 43% year-on-year rise from the ₹60.2 crore EBITDA in Q3 FY24. The EBITDA margin stood at 30.1%, a significant improvement from the 22.8% margin reported during the same quarter last year, indicating the company's efficiency in managing costs.

Other Income and Profit Before Tax

The company also recorded a 3.4% YoY increase in other income, which stood at ₹77.4 crore for the quarter. However, other income saw a sharp decline of 31.9% from the previous quarter (Q2 FY25), primarily due to the higher mark-to-market gains on the company's treasury portfolio in the preceding quarter.

The Profit Before Tax (PBT) for Q3 FY25 stood at ₹149.2 crore, reflecting a 23.3% YoY growth. This is a positive indicator of the company's ongoing profitability and growth despite challenges in other areas.

Tax Rate and Deferred Revenue

The company's effective tax rate for the first nine months of FY25 was 12%, which was lower than the tax rate in the previous fiscal year. This was due to the reversal of deferred tax on treasury movements. Additionally, the company's deferred revenue grew by 7.3% YoY, amounting to ₹507.2 crore, highlighting a solid growth trajectory in its business operations.

Management's Focus on Growth

In an exchange filing, Shwetank Dixit, the Chief Growth Officer of Just Dial, expressed the company's focus on driving top-line growth while maintaining operational efficiency. He emphasized that the company continues to enhance its offerings to users while providing businesses with advanced tools, thereby creating sustainable growth for all stakeholders.

"We are focused on offering value to both users and businesses, helping them achieve their goals with easy-to-use solutions," Dixit said.

Conclusion

Despite a decline in quarter-on-quarter net profit, the year-on-year growth in revenue and EBITDA, alongside solid profitability, signals that Just Dial's business continues to grow. However, the market seems cautious about the decline in quarterly profit, reflecting investor concern over the company's ability to maintain strong sequential growth.

The share price drop may present an opportunity for long-term investors who believe in Just Dial's strategy of growth, digital transformation, and continuous innovation in its offerings.

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