IndiaMart Q3 Results Review — Dolat Capital Maintain 'Buy' On The Stock, Sees 33% Upside; Here's Why

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Dolat Capital Report

IndiaMart InterMesh Ltd. reported revenue growth of 1.9% QoQ (our estimate: 2%), led by 3.5% uptick in average revenue per user despite 1.7% decline in subscriber growth. Consolidated operating profit margin expanded by 34 bps to 36.7% (our estimate: 35.5%) from operational efficiency and protracted sales/marketing investments.

Subscriber base saw an unexpected decline of 3,500, due to reduction in gross adds, as management focused on higher quality biz., compounded by fewer working days during the festive season. Average revenue per user growth remains healthy, with Top 10% customers ARPU up 20% YoY.

While subs. addition needs to demonstrate sustained uptick, ARPU growth is notable. The multi-pronged strategy to improve subs. quality would play out in next two quarters. As a result, we raise FY25E EPS by 5.5%, but lower FY26E/FY27E estimate by 6.7%/7.7%. Maintain ‘Buy’ rating with DCF-based target price of Rs 3,050 (implies PER of ~33x on FY27E EPS or implies two times on PEG).

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