JustDial Local Search up 33%, MasterApp by Sept

JustDial Local SearchJust Dial’s Search maintained a strong growth trajectory: searches were up 33% yoy in 1QFY16 with strong growth across business segments. Tier-II/III cities are growing at a very fast pace, supporting 20% growth for the top-5 cities. Steady growth in paid campaigns (ended at 346,000 in 1QFY16 in 15.3 mn listings) and steady pricing helped Just Dial sustain a 25% revenue growth in FY2015. Churn rate remains unchanged at 44% levels given high mortality and shift rate. Just Dial shared internet penetration limiting growth for the search business.

Just Dial aims to launch master app by September 2015 and is investing in back-end infrastructure in order to enhance user interface and experience of the offering. It may invest a few more quarters to handhold and educate SMEs before starting to monetize the Search Plus offering. It continues to refine is master app feature so as to leverage it as a one-stop solution for its user needs (addresses the problem of app fatigue). We expect the Search Plus to drive significant business, especially as it scales up meaningfully by FY2017E. The initial assessment of the management is that the response has been very encouraging (doctor appointment, ordering food, travel applications stand out).

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