Leadership reset revives rerating hopes at Just Dial

ET Intelligence Group: The stock of Just Dial hit an upper circuit on Monday after the local search services provider announced a transition to professional management from a founder led approach.

Excluding Monday’s surge, the stock has lost 40% over the past 12 months, with its price-earnings (P/E) multiple languishing at around 10 from the historical average multiple of over 30, largely reflecting a limited scope for growth.

A shift to expert professional leadership, however, is likely to bolster the company’s presence in the business-to-business (B2B) segment through a higher participation of small and medium enterprises (SME) and fuel its efforts in providing AI led solutions. This optimism is expected to result in a valuation rerating in the short term. However, efficient execution of the strategies led by the new management will be crucial for the stock to retain higher valuation in the long term.

The company has appointed Dinkar Ayilavarapu who was previously the head of Flipkart Wholesale as the new CEO. He will take charge on August 1 once VSS Mani, the founder and current CEO/MD, concludes his term. In addition, Dinesh Taluja, formerly one of Just Dial’s directors, is made the CFO.

Reliance Retail acquired a controlling stake in Just Dial in July 2021 for ₹5,710 crore. Since then the company’s revenue from operations and net profit have grown at a five-year compounded annual growth rate of 13% and 19% to ₹1,213 crore and ₹497 crore respectively. The active enterprise listings on Just Dial’s platform have increased to over 56 million at the end of the June 2026 quarter from around 30 million at the time of its acquisition in 2021.

The company’s cash and investments have steadily improved to ₹6,022 crore at the end of the June quarter from ₹4,756 crore two years ago, offering ample room for investments in building required capabilities. The new management is expected to scale up the B2B presence and help in fast deployment of platform intelligence using AI capabilities. However, this will be an uphill task amid intense competition, necessitating a focussed execution.