Established in 1996, Indiamart Intermesh Limited India’s largest online B2B marketplace, connecting customers and providers, and is focused on integrating Small and Medium-Sized Enterprises (SMEs) into the new paradigm. It provides a platform to discover products and services and connect with the suppliers of such products and services.
The company controls over 60% of the online B2B classified market, making it the industry’s top player, with 8 million Indian supplier storefronts and 202 million registered buyers in its portfolio.
The company has been diversifying its presence, and currently, metro cities account for 30% of total purchasers, tier-2 cities account for 25%, and the rest of India contributes 45%.
Stock Performance
The stock has delivered negative returns of nearly 10.4% in one year, as well as around 14% returns in the last six months. Likewise, the shares of Indiamart Intermesh have given negative returns of about 1.5% in the last one month.
The stock hit its 52-week high at Rs. 3,198.95 on 30th July 2024, and compared to its current trading price of Rs. 2,343, the stock is trading at a discount of nearly 27%.
After a prolonged period of subdued performance, the shares of the first and largest online B2B marketplace in India surged by around 3% on BSE to hit an intraday high at Rs. 2,369.9 on Thursday, with a market cap of Rs. 14,030.4 crores.
However, the stock opened lower on the same day at Rs. 2,294.55 on BSE, down by nearly 0.3% from the previous closing price of Rs. 2,300.4.
Financials
Indiamart Intermesh reported a significant growth in revenue from operations by 18% YoY to Rs. 348 crores in Q2 FY25 rising from Rs. 295 crores in Q2 FY24, and a marginal growth of 5% QoQ from Rs. 331 crores in Q1 FY25.
Meanwhile, the company’s net profit increased to Rs. 135 crores in Q2 FY25, increasing by 18.4% QoQ from Rs. 114 crores in Q1 FY25, and by 95% YoY from Rs. 69 crores.
The company’s net profit margin declined from 32.64% in FY23 to 31.27% in FY24. Over the past three years, Indiamart has seen a significant drop from
42.18% in FY21. Similarly, the operating margin decreased slightly to 42.23% in FY24, down from 42.35% in FY23, and has fallen considerably from 59.54% in FY21.
Also read….
Key Factors Affecting Share Price
Subscriber Growth Challenges: The company has been struggling to grow its base of paying suppliers, a crucial driver of revenue. Over the past six quarters, subscriber growth has remained stagnant, raising concerns about future revenue potential.
Over the past six quarters, the number of Paying Subscription Suppliers stood at 203K in Q4 FY23, marking a 20% YoY increase at that time. However, recent growth has been marginal. In Q1 FY25, the number of Paying Suppliers rose by 4% YoY to 216K, but growth stagnated in Q2 FY25, with Paying Suppliers increasing by just 4% YoY to 218K and showing a modest 1% QoQ increase.
The Collections from Customers showed a 14% YoY increase to Rs. 366 crores in Q1 FY25, the growth slowed significantly in Q2 FY25, with collections rising by only 6% YoY to Rs. 356 crores and declining by nearly 3% QoQ.
Cash Generated from Operating Activities saw a robust 50% YoY growth, reaching Rs. 136 crores in Q1 FY25. However, in Q2 FY25, the growth slowed drastically to just 1% YoY, amounting to Rs. 103 crores, and registered a sharp 24.3% QoQ decline.
Additionally, the number of Registered Buyers increased by 13% YoY to 198 million in Q1 FY25. However, the growth rate moderated in Q2 FY25, with Registered Buyers rising by 11% YoY to 202 million and showing a marginal 2% increase QoQ.
Intense Market Competition: The competitive landscape in the B2B sector has intensified, with rising competition from other platforms creating pricing pressures and challenges in customer retention. As new players enter the market, IndiaMART may find it difficult to sustain its market share, potentially impacting its financial performance.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
