Here are the brokerage
Reviews of Justdial IPO which is Offer for Sale - Money Invested by you will go into promoters Pocket and ZERO Benefit to the Company.
Aditya Birla Money has the Following Recommendation,
The net proceeds of the IPO would not come into the company, as it is an exit opportunity for the existing investors (16% of the OFS by promoters and the remaining 84% by PE investors). We accept that the business model is efficient and has good growth prospects; however, the valuation premium JDL is demanding is very steep (P/E of 60x on upper band and 52x on lower band on FY13E), considering Google (US) trades at 27x. We believe that the steep pricing of the IPO factors in the medium term growth expansion. In addition, entering into low-entry
barrier business model (Google India & Nokia City lens app biggest threat) – demands rigorous monitoring and also has the risk of technological obsolescence. Moreover, ~ 16% of the issue size is an offer of sale by the existing promoters – a move not likely to inspire confidence among investors. We, thus, recommend an Avoid rating to Justdial IPO on valuation basis.
Emkay Share has the following Recommendation,
JD’s pricing optically looks expensive, but its justified by immense potential to generate strong cashflows in higher growth market. The premium would be paid for uniqueness of business and scarcity of same in the listed space. We would advise SUBSCRIBE with a potential upside of 15% over 12 Months on higher price band.
IIFL Analysts Sandeep Muthangi has the following Recommendation
In our interactions, the management seemed confident of 40% revenue Cagr in the medium term. However, we are sceptical and expect revenue growth rates to fall to 25% Cagr over the next three years. At the IPO price band (Rs470-543), valuations are expensive (FY14ii PER: 31x to 36x). Do not dial in yet
Asit C Mehta recommends as follows,
JDL has a cash kitty of Rs 500 crore and investors will keenly watch for effective utilization of the same. The consolidated diluted EPS for FY12 was `8.13. At that EPS, the PE at the lower price band of `470 is 57.81 while the PE at the upper price band of `543 is an eye-popping 66.79. The weighted average ROE is quite high at 40.59%. we recommend investor to SUBSCRIBE to the offer at the lower end of the price band of 470/-.
KR Choksey Analysts Umesh Patel says,
JD’s IPO offering comes at P/E of 62X-72X to its FY12 earnings, indicating stretched valuation at current offer price. However, we believe the unique business, asset light model, new product offerings, increasing internet users due to improving mobile penetration level along with more favorable preference by customers to use” JUST DIAL” as a local search tool will be the key growth drivers, going ahead. Therefore, investors with high risk appetite & wanting to invest in such kind of business model can SUBSCRIBE to the IPO
Nirmal Bang Equity analysts Jignesh Kamani and Saiprasad Prabhu says,
At the lower end of the IPO price band, JDL stock is valued at 20.1x/14.1x EV/EBITDA and 5.7x/4.0x FY14E/FY15E EV/S, respectively, lower than global peer Yelp, which trades at 38x/6.3x CY14E EV/EBTIDA and EV/S. The likely strong revenue/PAT CAGR of 36.1%/43.1%, respectively, healthy free cash flow of Rs1.5bn over FY13EFY15E and cash/share of Rs93 should command a premium valuation. - Subscribe
ICICI Direct Analysts Abhishek Shindadkar and Hardik Varma recommend
As on date, the company has ~9.1 million listings with ~2% of them being paid listers. Over time, the company is transitioning its business model from just being a voice player to internet, mobile app and SMS and is witnessing modest success. Although absolute paid listings grew at 61.6% CAGR to 171,000 in FY12 vs. 40,500 in FY09, revenue per campaign declined to 15,325 in FY12 vs. 21,215 in FY09. Finally, though the unique business model and scarcity premium could attract investors, we believe, 1) valuations are expensive while earnings growth is decelerating, 2) issue yields no money in the company and, hence, could be at most subscribed for listing gains.
SPA Financial Advisor, Amit Aggarwal said,
At INR 543, the company will trade at 60x FY13E EPS (35x for InfoEdge - online advertisement based revenue, though not fully comparable due to exposure limited only to jobs, matrimonial and property searches). However due to significant growth opportunity we recommend BUY with a long term horizon to the IPO.
