Why Just Dial faced sales slowdown in Q2

Just Dial's revenue growth slowed down in the second quarter ended September 30 as the company did not expand its sales team, VSS Mani, founder and CEO, told analysts.

In the quarter gone by, the online local business search engine company was fixated with Search Plus, a new app that integrates over 25 transaction-related services on a single platform.

The publicly-listed Just Dial Ltd, which is slowly trying to morph into an e-commerce marketplace, had launched its multi-purpose Search Plus app on September 14.

"...perhaps too much focus on Search Plus from top management and probably we neglected simple things like hiring more people and going after and acquiring new customers I think that was a blunder," Mani told analysts. The Search Plus app combines Just Dial's search services with transaction-based ones such as online food delivery, groceries, wine delivery, doctors' appointments, taxi bookings and online purchases of electronics among others.

Currently, separate set of firms cater to products related sales (e-commerce) and booking local services. With Search Plus, Just Dial is trying to integrate both in a single platform leveraging on its deep penetration with local businesses service provider.

Just Dial had reported 47 per cent increase in second-quarter net profit, driven mainly by non-operating income.

Net profit for the quarter ended September 30 rose to Rs 46.3 crore from Rs 31.49 crore a year earlier, the company said on Thursday. Revenue increased to Rs 171.27 crore from Rs 147.40 crore.

In fact, hiring at JustDial has been flat for the almost two years now. Its Q2-end headcount fell to 10,611 from 10,789 in the previous sequential quarter. "So if you go by our old data, we had a pretty much flat sales force for the last almost 18 to 24 months except barring the previous quarter. So that is where the hunting hiring happened. The new recruits are usually put in sales to get in new customers on board and that got neglected," Mani said.

Just Dial plans to ramp up on the hiring front.

"I think adding another couple of thousand people on the sales force is also less, which we should, do like as fast as possible," Mani added.

JustDial has been trying to add new revenue streams for the last few quarters. It recently rolled out a cloud-based mini enterprise resource planning platform for vendors on its platform.