IndiaMart InterMesh Gets Its Highest Target Price As Nuvama Upgrades To 'Buy' On Growth Cycle Reboot

Nuvama has upgraded IndiaMART InterMesh Ltd. to 'buy' from 'reduce', sharply raising its target price from Rs 2,100 to Rs 3,800. The business is entering a new upcycle, underpinned by improving subscriber metrics, strategic platform investments, and a recovering demand environment.

This is the highest price target so far among the analysts tracked by Bloomberg.

After two years of elevated churn in its silver subscription tier and declining user engagement, IndiaMART has initiated several corrective measures. These include upgrades to its platform, insourcing parts of its sales force, and increased investments in branding and marketing.

These efforts have started to yield results, with unique business enquiries per paid supplier rising from a low of 106 in first quarter of financial year 2024 to 125 in the fourth quarter of the previous fiscal, closing in on the long-term average of 130.

Management’s decision to reduce the number of suppliers per enquiry—from around seven to fewer than four—has improved lead quality and is expected to support higher supplier satisfaction and retention, the brokerage added. With a strong focus on attracting buyers, Nuvama anticipates a further rise in traffic and enquiry volume, leading to improved net subscriber additions and a pickup in collections from second and third quarter in financial year 2026.

IndiaMART had previously raised prices for its silver packages in June 2023, triggering higher churn, especially among less-experienced users. However, the company is now prioritising engagement quality over gross additions.

Margins, currently elevated at 38%, are expected to normalise to the mid-30% range as IndiaMART scales up its marketing investments to Rs 50–60 crore in fiscal 2026E.

Nuvama has increased its earnings estimates by 9–10% for fiscal 2026–2027, driven by stronger revenue growth. Revenue is forecast to grow at an 18% CAGR over financial year 2025–2028E, supported by an 8.2% CAGR in subscriber additions and 9.7% CAGR in ARPU.

While Ebitda margins may moderate, Nuvama believes this will not negatively impact investor sentiment, as higher margins have historically been viewed as temporary.

Currently trading at a forward P/E of 28 times—below its historical average of 45 times—IndiaMART is seen as undervalued. Nuvama believes the company is well-positioned for a re-rating as growth re-accelerates and key performance indicators continue to improve.