Anand Rathi's research report on IndiaMart InterMesh
We recently met the IndiaMart management. 1) With ~38% of India’s MSMEs using the internet for business (vs 90% in China), e-classifieds holds substantial growth potential, 2)Focus on growing collections at a 20% CAGR ahead, 3) FY23 margins should be ~28-28.5% and expand from next year with revenue growth. We see value in the stock owing to network-effect, healthy cash-flows, negative working capital, asset-light model and healthy cash balance of Rs20bn (15% of market cap).
We retain our Buy rating and introduce FY25e, with a TP of Rs5,500 (based on DCF, an implied PE of 40x FY25e EPS).
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