Reduce Just Dial After Reliance Acquisition: YES Securities

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Reduce Just Dial After Reliance Acquisition: YES Securities

By Aditya Raghunath -- Early this week, Reliance Retail, the holding company for all retail ventures under Reliance Industries Ltd (NS: RELI ) said that it has acquired a controlling stake in Just Dial Ltd (NS: JUST ), India’s only listed search advertising company.

Reliance wants to make a B2B commerce play via Just Dial. It said, in a press release, “The capital infused by RRVL will help drive the growth and expansion of Just Dial into a comprehensive local listing and commerce platform. Just Dial would expand discovery on its platform and enhance transactions for millions of products and services. These investments will leverage Just Dial’s existing database of ~30.4million listings and its existing consumer traffic of ~ 129.1million quarterly unique users (as on 31 Mar 2021).”

However, brokerage firm YES Securities has recommended a ‘reduce’ rating on the stock with a target of Rs 950. The stock closed at Rs 990 on July 21.

YES Securities said that the B2C sector where Just Dial has a major presence in and derives most of its revenues from is highly competitive and the traffic is stagnant. The number of additions of new customers has been low over the last few quarters. While the launch of the B2B platform is a step in right direction, but it will take time to make its presence felt in the space.

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