Good day Friends,
Welcome to our latest newsletter, it has been a wonderful week while Indices are hovering around the all-time high, hope with the last newsletter you are now able to make the best use of All-Time-High.
Sign Up for our Newsletter Below It’s Free
Reliance Retail has become the new promoter of the company JustDial Ltd which was incorporated in the year 1996, got listed in the year 2013 at a Share Price of Rs. 543 and currently it’s trading at Rs. 1075 giving a return of 8.91 % which is a nearly fixed deposit rate.
Reliance Retail could add the synergy that was the missing ingredient in the performance of the Justdial.
Justdial, India's leading local search engine, has roped in Bollywood Superstar, Ranveer Singh, as it’s Brand Ambassador. The company had its brand ambassador as Mr. Amitabh Bachchan earlier.
There is a joke that’s floating currently in the analyst community that, since the calling is free they Just dialled it!
It’s a Special Situation definitely that’s got high potential.
Now coming to its past performance.
The sales have grown at 14% CAGR and profit has grown at 22% CAGR which is a reasonable growth. The company is almost debt-free with a good return on Capital.
The Company has about 9500 employees in telesales, marketing, feet-on-street activities deployed across 250+ cities covering 11,000+ pin codes in India. It derives 70% of its revenues from the top 11 cities including Mumbai, Ahmedabad, Hyderabad, Kolkata, Bengaluru, Chennai, Delhi, etc. Its technology and R&D division is located in Bengaluru.
Reliance Retail Ventures (the parent of Reliance Retail) will put 2100 cr. into Justdial for a preferential allotment of 25%, and buy out 2/3rd of what VSS Mani owns, at Rs. 1020 or so per share. Open offer coming up to JustDial investors.
Additional funds with new promoter justdial will be rightly be placed to take advantage of the tech opportunities in India.
The company have revamped its approach to B2B businesses, providing a database with enriched content on its platforms by creating digital catalogues for various businesses. It has also launched a new sub-platform, JD Mart, an exclusive platform for B2B businesses that provides a new wholesale experience.
Also, with low risk on the downside, the opportunities on the upside are unlimited.
Gone are the days where good monies can be made with traditional businesses one needs to invest in the new age business for long term structural advantage.
Disclaimer: It’s safe to assume that I or my clients could have a position in Justdial. Not a Buy Advice. This post was just for educational purposes.
Hope with this example you can spot how a change in management can act as a catalyst for low-risk return opportunities.
Hit that 💚 if you liked today’s issue.
You can forward this email or share WM on social media by clicking the button below.