IndiaMart Q1 Review - Mixed Result; Near Term Margin Guidance Key To Watch Out: ICICI Securities

ICICI Securities Report

IndiaMart InterMesh Ltd.'s strong revenue growth trajectory was maintained in Q1 FY24 with ~26% YoY revenue growth. However, new subscriber addition was significantly lower than expectations (4,993 versus our estimate of 8,000).

Our channel checks indicate more than 10% price increases were taken in base packages (price sensitive) mid-Q1 FY24. We believe lower subscriber additions was due to customer pushback to pricing action.

Ebitda margin was higher than estimated (27.4% versus our estimate 26.3%), as employee expense remained flattish QoQ.

BUSY revenue grew 15.4% QoQ in Q1 FY24, which we believe indicates improving traction for its accounting software service offerings.

In addition, the company has announced a buyback of 2.04% equity at Rs 4,000 per share. We look forward to more clarity on near term subscriber addition and operating margin outlook in its conference call today at 4 pm.

Buyback details

The proposal for buyback of 12,50,000 equity shares fully paid up having a face value of Rs 10/- each was approved by the Board at the price of Rs 4,000 per share. The size of the buyback is Rs 5 billion.

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