Just Dial (JUSTDIAL)

FairStock Score: 44/100 — MIXED

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Strong balance sheet with negligible debt (D/E 0.02) and price close to book value (P/B 1.07), giving downside cushion.
• High promoter holding of 74.15% aligns management interests with shareholders.
• Earnings yield of roughly 12.2% (inverse of P/E 8.18) is attractive on an absolute basis.
• Latest quarter net margin is robust at ~38.5% (₹118 Cr profit on ₹306 Cr sales).
• Piotroski F-Score of 7/9 points to decent financial health.

Concerns

• Sales growth of only 6.39% and profit growth of 2.81% make this a slow grower, not a compounder.
• ROCE of 7.11% is weak for an asset-light internet business with low debt.
• Zero dividend despite low growth and a near-clean balance sheet suggests suboptimal capital return policy.
• The stock is ~38% below its 52-week high of ₹878.60, and the stated FCF of ₹256.29 lakh Cr appears inconsistent with a ₹4,679 Cr market cap.

AI Analysis

At ₹544.60, Just Dial is trading barely above its book value of ₹510.14, with a P/E of 8.18. That immediately gets my attention—Mr Market is offering an earnings yield of roughly 12%. But Graham always taught me that cheap can be a trap if the business is mediocre. The returns tell a mixed story: ROE of 12.85% is reasonable, but ROCE of only 7.11% tells me capital is not being deployed into especially productive activities. The balance sheet is safe: debt/equity of 0.02 and promoter holding of 74.15% align the people running the shop with my interests. What bothers me is the growth. Sales are up only 6.39% and profit barely 2.81%. With a PEG of 1.78, this is not a bargain on a growth-adjusted basis. The latest quarter, though, showed decent operating traction: ₹306 Cr of sales produced ₹118 Cr of net profit, a nearly 39% margin. However, one quarter does not make a compounder. The zero dividend is another issue for a slow-growing, almost debt-free business; shareholders should be getting cash back if reinvestment opportunities are thin. Also, the stock fell from ₹878.60 to ₹480.50 before recovering to ₹544.60—that range tells me the market has no conviction in a smooth upward story. Finally, the stated free cash flow of ₹256.29 lakh Cr is impossible to reconcile with a ₹4,679 Cr market cap; I would not trust any conclusion built on that number until the company provides a clean cash-flow statement. Overall, this is a steady but slow business. At the right price it may offer value, but growth and capital allocation need to improve before I call it a great investment.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer