IndiaMART surges over 5% as Jefferies predicts subscriber additions to double by FY25

Analysts at Jefferies forecasted that paid subscriber additions will pick up from 3,000 per quarter in FY24E to 6,000 per quarter in FY25E

Shares of IndiaMART InterMESH surged over 5 percent to Rs 2,672 per share on March 12 after global brokerage firm Jefferies shared a ‘buy’ call with a target price of Rs 3,400 apiece, implying an upside of over 27 percent from the current level.

The stock of IndiaMART InterMESH has declined over 3 percent in the past one month, as against 3 percent rise in the benchmark Sensex. Earlier, IndiaMART shares had hit 52-week high of Rs 3,293 per share on September 7, 2023.

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Analysts at Jefferies said that investors had raised concerns about the company’s slow subscriber additions, SaaS investments, and execution challenges. However, they have now agreed with the company’s structural growth potential and moats.

“The paid subscriber additions will pick up from 3,000 per quarter in FY24E to 6,000 per quarter in FY25E. This rise should support the stock’s valuations going ahead. We expect the company to deliver 19 percent/25 percent revenue or earnings per share (EPS) compounded annual growth rate (CAGR) over FY24-26,” the brokerage firm added.

Earlier, IndiaMART’s subscriber additions moderated to 9,000 in nine months ending FY24 (9MFY24) from 34,000 in FY23.

In Q3FY24, the online retailer’s net profit dropped 27 percent to Rs 82 crore, while revenue from operations jumped 21 percent to Rs 305 crore. The company also recorded a significant decline in other income at Rs 41.7 crore from Rs 102 crore in the same quarter a year ago.

Meanwhile, operating profit, known as earnings before interest, taxes, depreciation, and amortisation (EBITDA), rose 22.4 percent to Rs 85.9 crore and margins were flat at 28 per cent year-on-year for the December quarter.

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