Credit Suisse cuts earnings estimates for Just Dial

MUMBAI: Credit Suisse has cut its FY17 and FY18 earnings estimates for Just Dial by 19% and 8% respectively due to higher investments in the core business. The brokerage has also lowered target price on the stock to Rs 800 from Rs 950, and retained ‘neutral’ rating.

The stock fell 4.31% to Rs 667.50 today on the NSE.

Significant headcount addition us also likely to pressure margins going ahead, said the note by Credit Suisse to its clients.

“Management plans to add about 2, 000 employees in the next three quarters. Marketing spends for Search Plus will likely begin from the September quarter and hence will weigh on margins,” the brokerage said.

The brokerage’s commentary comes after Just Dial on Saturday reported a 25% decline in net profit at Rs 35.33 crore for the quarter ended March. The company had reported a net profit of Rs 47.16 crore in the corresponding quarter a year ago.