IndiaMart Has Analysts Bearish Amid Declining Subscriber Base, Weak Growth Outlook

IndiaMart InterMesh Ltd., one of India’s leading online business-to-business e-commerce platforms, has received bearish response from two brokerages, Nuvama and Nomura, following a weaker-than-expected quarterly performance and concerning trends in its subscriber base.

Both brokerages have significantly lowered their target prices, citing factors such as decline in paid subscribers, weak customer additions, and elevated churn rates, which have impacted the company’s near-term growth prospects.

Nuvama’s analysis highlights a surprising decline in IndiaMart's paid subscribers, a crucial metric for the company’s performance. The firm reports that the number of paying subscribers dropped by 3,715 in Q3 FY25, a sharp contrast to the growth witnessed in previous quarters. While the company’s revenue grew 16% year-on-year, it struggled with subdued collection growth, which is expected to remain under 10% in the coming quarters.

Nuvama has retained its rating to 'reduce' and lowered the target price for IndiaMart to Rs 1,970 from Rs 2,500 per share, reflecting concerns about slower growth and sustained subscriber churn. The firm also noted that margins were temporarily elevated, due to reduced spending on sales and marketing.

Similarly, Nomura has cut its target price for IndiaMart to Rs 1,900 from Rs 3,150 per share, and downgraded its rating to 'reduce' from 'neutral'. The brokerage points to the company’s ongoing struggle with weak subscriber additions and high churn, particularly in its lower-tier subscription packages, as significant concerns. Nomura has also revised its PAT estimates downward by 4-13% for FY25-27, citing the slow pace of subscriber growth and limited potential for improving collections from existing customers.

Both brokerages have raised concerns over IndiaMart's long-term growth trajectory, unless it can significantly reduce churn and improve gross subscriber additions. Despite efforts by management to stabilise the platform and focus on higher-quality customers, the elevated churn rates, especially in the silver-tier packages, continue to weigh on the company’s performance.