The B2B segment in India is witnessing significant growth, driven by the increasing digitalization of industries and the shift towards e-commerce. With businesses increasingly seeking efficient and scalable solutions, B2B platforms are playing a key role in facilitating trade and services between enterprises. This sector offers immense growth potential, particularly in manufacturing, logistics, and technology, as businesses embrace automation, AI, and data analytics.
Companies like IndiaMART, TradeIndia, and Udaan are leading players, providing platforms for businesses to connect, source products, and streamline operations. Additionally, B2B marketplaces offer access to global markets, enabling Indian businesses to expand their reach. As the Indian economy grows, the B2B segment is poised for continued expansion, creating new opportunities for digital transformation and cross-industry collaborations.
Share Price
The shares of the company are currently trading at Rs. 2098.75 down by 8.55% from its previous close of Rs. 2294.85 as of January 22, 2025. The stock also touched an intraday low of Rs. 2065.
Q3 Results
YoY Performance
The company reported a strong financial performance with a 47.9% surge in profit, reaching Rs 121 crore compared to Rs 81.8 crore in the previous period. Revenue grew by 16.05%, rising to Rs 354.3 crore from Rs 305.3 crore. EBITDA saw a significant jump of 61.3%, increasing to Rs 138.2 crore from Rs 85.7 crore.
The company’s margin also expanded sharply to 39%, up from 28% year-on-year, reflecting improved operational efficiency and profitability.
These results highlight the company’s robust growth across key financial metrics, driven by increased revenue and enhanced cost management.
QoQ Performance
On a quarter-on-quarter basis, revenue rose by 1.6%, up from Rs 332 crore in Q2FY25 to Rs 337 crore. However, profit after tax (PAT) declined slightly by 1.6%, from Rs 127 crore in Q2FY25 to Rs 125 crore. While the revenue growth was positive, the slight dip in PAT highlights potential cost pressures or other challenges impacting profitability in the short term.
Nomura Downgrades
Nomura’s Downgrade on IndiaMART
Nomura has downgraded IndiaMART Intermesh Ltd. to a “reduce” rating from its earlier “neutral” stance, slashing its price target to ₹1,900 from ₹3,150. This revised target suggests a potential downside of 10% from the current levels. The downgrade follows a weak performance in the company’s October to December quarter, particularly due to a decline in paying subscribers, which fell by 3,715 compared to the September quarter.
Rationale for Downgrade
Nomura highlighted the unexpected decline in IndiaMART’s paying subscriber base, marking the first sequential drop since Q1 FY2022. The brokerage also pointed out a decrease in unique visitors from 28 million to 27 million. Nomura expressed concern that the combination of low subscriber additions and high churn will negatively impact collections growth in the near to medium term, until subscriber metrics improve.
Motilal Oswal
Motilal Oswal’s Rationale
Motilal Oswal is optimistic about IndiaMART’s long-term growth, citing strong fundamentals. The brokerage expects growth driven by increased digitization among SMEs, the demand for out-of-the-circle buyers, and a robust network effect.
IndiaMART holds a dominant 70% market share in its industry, with the potential to further improve its Average Revenue Per User (ARPU) due to low price sensitivity.
Price Target Update
Despite maintaining a “buy” rating on IndiaMART, Motilal Oswal has revised its price target down to ₹2,600 from a higher estimate. This new target implies a potential upside of 23% from current levels, reflecting confidence in the company’s ability to navigate challenges while benefiting from strong industry tailwinds.
About the Company
IndiaMART is the first and largest B2B digital marketplace in India, revolutionizing the B2B landscape by integrating Small and Medium Enterprises (SMEs) into the digital ecosystem. The company continuously innovates to make its platform more accessible, visible, and engaging for businesses, ensuring a seamless online experience. IndiaMART’s focus on enhancing the visibility of SMEs sets it apart as a leader in the industry.
With nearly 60% market share in the online B2B classifieds space, IndiaMART is the dominant player in the sector. It boasts an impressive portfolio of around 7.9 million supplier storefronts, 214,000 paying subscribers, and 108 million live product listings. The platform attracts 24 million unique business inquiries and a total of 252 million repeat users, showcasing its extensive reach and relevance in the B2B marketplace.
Written By: Dipangshu Kundu
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