The Indian e-commerce industry is seeing significant growth with the help of increased participation from people across the country. Online shopping has been gaining popularity among Indians, with more than 25-30 million adults making purchases through the internet. In the initial years, the purchases through the internet were predominantly concentrated around buying airline tickets and hotel bookings. Today, the consumer is very happy logging on to the net and buying groceries, movie tickets, food items, electronic gadgets, apparels and other daily routine products. The largest online shopping is of mobile phones, which accounts for nearly 30%-35% of total e-commerce sales. With the demographic profile of our country and the surge of youngsters entering adulthood across Tier II and Tier III cities, according to many research reports, online sale of mobile phones is going to increase by over 50% during the next couple of years. E-commerce is big business today and with many large foreign equity players coming into the country, the industry is expected to get bigger by the day in India. With better infrastructure, broadband availability and higher penetration of the internet, the industry can create newer employment opportunities and increase the number of consumers substantially.
JustDial is a unique company in the country, providing local search related services to users through multiple platforms such as mobile phones, computers, apps, over the telephone and text. To engage the consumer in a smoother manner, the company has launched the JD App which is an all in one app, providing live TV, video, news and map aided search. The brand ambassador for the company is star icon Amitabh Bachchan, who regularly appears on TV, propagating the benefit of this app to prospective consumers. JD has recently started many new initiatives such as providing business management solutions for the SME sector, enabling quick digital payment through the JD Pay App and providing transaction oriented services for potential users. JustDial had reported a two-fold rise in its net profit at Rs 57.34 crore for the third quarter ended December 2018, as against Rs 28.60 crore for the year ago period. The company’s income also increased to Rs 260.85 crore for Q3FY2019 as against Rs 199.37 crore in the same quarter for the last fiscal. Meanwhile, the company has also completed the buyback offer of purchasing 2,750,000 equity shares from its shareholders at a price of Rs 800 per share up to a sum of Rs 220 crore. The company is running a highly efficient and profitable business model where advertisers pay fees to run search led advertising campaigns for their businesses on JustDial’s platforms. It employs over 9,000 people comprising telemarketers and sales staff as of end of last year. Many analysts are betting on the JD stock on the back of rising user engagement and revenue acceleration boosting margin expansion. Hence, the JustDial stock currently quoting at Rs 590 on the Indian bourses is a good buy for a 25% price appreciation in the next nine months.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.