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JustDial’s hiring woes in sales teams hits revenue growth in Q2FY16

JustDial UK

Online directory services company JustDial’s revenue growth was impacted in the quarter ended September 30, 2015 as the company did not make adequate hiring for its sales team, JustDial founder VSS Mani and chief financial officer Ramkumar K revealed in an analyst call.

Answering a query, Mani said that hiring in JustDial had been flat over the last 18-24 months and that hit the company’s ability to get new customers. “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.

“Now it got neglected because we were also focusing a lot more on Search Plus and other stuff and there were somewhere the top most management focus kind of little bit strayed,” he added.

justdial chart2

JustDial had reported operational income of Rs 171.27 crore during Q2FY16 growing  16.9% from Rs 147.4 crore in the same quarter last year. Total operating income increased 25% y-o-y to Rs 168.62 crore in the preceding quarter. Operating revenue increased by 26% y-o-y to Rs 156.28 crore in Q4Fy15.

Headcount at JustDial stood at 10,611 at the end of Q2FY16 a drop from 10,789 employees reported in the preceding quarter.

Ramkumar added that it would be a few quarters before the company would see revenue growth back +25% levels. JustDial also plans to add 1,000 or more ‘feet on the street’ employees specifically in sales over the next 2-3 quarters.

“We thought that our idea was to see if we should get 4% to 5% productivity increase from the existing sales force – that would have sort of compensated for this lack of the sales force addition, but that did not happen,” Ramkumar added.

As a consequence, income per listing took a beating in the quarter and stood at Rs 108.40 for the quarter.

justdial chart1

Newer geographies versus existing cities 

VSS Mani added that hiring was down across both in JustDial’s existing cities and newer geographies but added that there is still a lot of potential in Tier-1 cities and which needs to be tapped by the sales force.

However, Ramkumar added that the contribution of tier-2 and tier-3 cities to the revenue mix is increasing. “That the contribution of the smaller towns and cities are increasing and this quarter I would say the non-top 11 cities contribution is about 13.5%,” he added.

Increase in app installs

In September, Just Dial launched the new version of its Search Plus app. The revamped app featured an updated user interface with large tiles for each category of the services it offered. Mani said that the response to the updates were phenomenal and JustDial added 1.4 million new users in the quarter.

Download: Transcript

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