Buy IndiaMART InterMESH; target of Rs 3370: HDFC Securities

HDFC Securities is bullish on IndiaMART InterMESH has recommended buy rating on the stock with a target price of Rs 3370 in its research report dated July 21, 2023.

Broker Research

July 24, 2023 / 12:16 IST

buy

26 Aug, 2025 12:21

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HDFC Securities' research report on IndiaMART InterMESH

IndiaMART posted in-line revenue growth and strong cash collections (+26% YoY). The growth in supplier additions was lower than estimated at ~5K, which was partially offset by higher realisations (+2.3% QoQ). The price hike in the entry-level package impacted paid supplier addition but led to ARPU improvement, also supported by migration to a higher ARPU bucket (~2% of the paid suppliers upgrade). Strong cash collections provide visibility of >25% YoY growth in FY24E; the margin will gradually expand to ~30% as most of the investments are behind. The sales headcount growth will be in line with paid supplier addition. The management expects paid supplier addition to be ~7-8K per quarter and improve ARPU as customers move up the value chain. We maintain our positive view on IndiaMart, based on (1) better growth visibility led by strong collections; (2) lower churn across client buckets; (3) margin expansion; and (4) an increase in ARPU.

Outlook

We increase our EPS estimate by 1.7/1.5% for FY24/25E and maintain our BUY rating with a DCF-based TP of INR 3,370 (~47x June-25E EPS), supported by revenue/EPS CAGR of 24/33% over FY23-26E.

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