Known for providing information on the contact numbers and details of various establishments, Just Dial, through Search Plus, launched services like food delivery, wine delivery and bus ticket booking in December.
Speaking to CNBC-TV18's Ekta Batra & Anuj Singhal, CFO Ramkumar Krishna Machari said the company will invest Rs 60-90 crore on advertising and marketing next year with around Rs 40-60 crore being a one-time spend. The company will continue to have a normal ad spend of around 5 percent of the revenue thereafter, he said.
Just Dial is confident of good revenue growth in FY15 on recent initiatives. Excluding the one-time ad spend, Krishna Machari expects margins to improve by around 150 bps in FY14-15.
Below is the interview of Ramkumar Krishna Machari, CFO, Just Dial with Ekta Batra & Anuj Singhal on CNBC-TV18.
Anuj: The belief in the market is that maybe the company needs some new revenue drivers. Tell us more about Search Plus because that is one of the new innovations from the company. How much can it contribute to financials in FY15 and 16?
A: As far as the revenue potential is concerned most of these will be live in various stages, monetisation should start for some of these in Q3-Q4 but meaningful contribution to revenue should happen from '15-16 onwards. We maintain that this year our endeavour is to make sure that we popularise the Search Plus among the user community. We have as many vendors sign up for these services and once you see the user traffic, monetiaation will follow, the vendors will also realise that they can grow their business, they can increase the geographic reach, they can increase their customer base through our platform on Search Plus and on the reverse auction to be specific, it will enable the user the discover best price at given point of time in a very non intrusive manner even if you were to be standing in a shop and wanted to buy a television set, you may want to discover the best price at that point of time…
Anuj: What kind of ad spend would be required to popuralise these products in terms of overall ad spend and marketing spends?
A: As we mentioned earlier in the Q3 conference call that we are allocating about Rs 60 crore to Rs 90 crore for the spend that will include about Rs 40 crore to Rs 60 crore of one time spend which will do because you have to realise that this is the first time we are introducing the Search Plus among the wider user community. So far whatever good traction in the usage that we are getting on Search Plus, people are discovering themselves that they can do many things like order food, reserve a table, order grocery or schedule a doctor's appointment, they are discovering on their own and doing things but we haven't gone to the wider user. So, we will be doing that late this quarter or Q2 onwards our ad spend will start on the Search Plus but I want to underline that this entire budget, there will be a big one time component and after that it will be a normal ad spend that we do which is about around 5 percent of the revenue. So, we believe that that would be sufficient for us from a traffic perspective.
Ekta: What would the expectation then be on margins in FY15 on one hand, for example the company is increasing investments but there is higher usage of internet and mobile taking place as well?
A: If you were to exclude the one time spend, margin definitely they will improve. As we mentioned earlier more and more traffic is getting on internet today, we have a high fixed cost base; margins will continue to expand given the operating leverage inherent in the business model. Having said that we are continuing to invest in both sales and technology infrastructure, on a like to like basis margins will continue to improve FY14-15 but this one time spend is going to be there. If you were to exclude that definitely margins will continue to improve.
Ekta: Staying with the margins, how much do you think margins can improve?
A: We maintain 150 bps on an average. We should be able to see that kind of improvement consistent with what we reiterated earlier as well.
Just Dial stock price
On April 16, 2014, at 14:14 hrs Just Dial was quoting at Rs 1259.75, up Rs 73.45, or 6.19 percent. The 52-week high of the share was Rs 1774.35 and the 52-week low was Rs 530.00.
The company's trailing 12-month (TTM) EPS was at Rs 15.37 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 81.96. The latest book value of the company is Rs 60.70 per share. At current value, the price-to-book value of the company is 20.75.
Anda sedang membaca artikel tentang
To spend Rs 60-90 cr on ad, marketing next year: Just Dial
Dengan url
https://kesehatanda.blogspot.com/2014/04/to-spend-rs-60-90-cr-on-ad-marketing.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
To spend Rs 60-90 cr on ad, marketing next year: Just Dial
namun jangan lupa untuk meletakkan link
To spend Rs 60-90 cr on ad, marketing next year: Just Dial
sebagai sumbernya
0 komentar:
Posting Komentar