Shares of Indiamart Intermesh tanked as much as 10 percent to Rs 2,065 in morning trade on January 21 despite the company reporting a 47.6 percent year-on-year (YoY) jump in net profit at Rs 121 crore for the third quarter that ended December 31, 2024.
The company’s revenue from operations rose 16 percent to Rs 354.3 crore, compared to Rs 305.3 crore in the same period last year. Operating performance improved significantly, with EBITDA surging 61.4 percent to Rs 138.3 crore in Q3, up from Rs 85.7 crore in the year-ago period.
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Following this, two brokerages have expressed concerns about Indiamart Intermesh following weak performance metrics. Nuvama retained a "Reduce" rating, lowering the target price to Rs 1,970 from Rs 2,500, citing a decline in subscribers for the first time since COVID and weak standalone collection growth of 8 percent year-on-year. The management’s guidance of sub-10 percent growth in collections for upcoming quarters and the absence of meaningful improvement in subscriber retention are expected to keep medium-term growth under pressure, despite lower sales and marketing costs temporarily boosting profitability.
Similarly, Nomura downgraded the stock to "Neutral," reducing the target price to Rs 1,900 from Rs 3,150. Concerns include a decline in the paying subscriber base, weak customer additions, and persistently high churn rates. Collections are likely to remain subdued in the near to medium term, prompting a downward revision in FY25-27 profit estimates by 4 to 13 percent.
In other news, IndiaMART Intermesh has appointed Manish Vij as a Non-Executive Independent Director for a three-year term, based on the Nomination and Remuneration Committee's recommendations. The appointment, not subject to rotation, awaits shareholder approval and adheres to applicable laws.
At about 9:20 am, shares of the company were trading at Rs 2,099, lower by 8.5 percent from the last close on the NSE. Indiamart Intermesh shares have tanked 9 percent in the last three months.
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