Buy IndiaMART; target of Rs 5500: Motilal Oswal

Motilal Oswal is bullish on IndiaMART recommended buy rating on the stock with a target price of Rs 5500 in its research report dated January 22, 2023.

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January 24, 2023 / 18:45 IST

26 Aug, 2025 12:21

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Motilal Oswal's research report on IndiaMART

INMART delivered a strong performance in 3QFY23, with revenue up 33.7% YoY and 4.5% QoQ (in line). Collections registered strong growth of 27% YoY to INR2.8b, suggesting good visibility on FY23 and FY24 revenue growth. Deferred revenue rose 28% YoY to INR10.1b, which should support ~30%/25% revenue growth in FY23/FY24E. Paying subscriber additions (up 6.6k QoQ) were lower due to fewer working days. EBITDA margin remained flat QoQ, which was largely in line with our estimate. We expect INMART to deliver a 23% revenue CAGR over FY23-25, aided by sustained paying subscriber additions and strong growth in deferred revenue. The management indicated that it has largely completed the sales investment needed to sustain client additions and that employee growth should be commensurate with revenue growth going forward. We believe that INMART should benefit from operating leverage over FY23-25 and estimate EBIDA margin of 27.3%/29.8%/31.8% for FY23/FY24/FY25. This, in turn, should drive a 34% PAT CAGR (excluding one-time gain) over FY23-25E.

Outlook

We largely maintain our estimates on a stable quarter. We value INMART on a DCF basis to arrive at a TP of INR5,500 (a potential upside of 21%), assuming 12% WACC and a 6% terminal growth rate, implying 49x FY24E EPS. We reiterate our Buy rating.

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