Motilal Oswal has given a buy rating to IndiaMART InterMESH with a target price of Rs 5830. The share price moved up by 0.70 per cent from its previous close of Rs 4964.90. The stock’s last traded price is Rs 4999.45.
IndiaMART InterMESH Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 14554.08 Crore) operating in Services sector.
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 163.20 Crore, up 6.60 % from last quarter Sales of Rs 153.10 Crore and up 4.21 % from last year same quarter Sales of Rs 156.60 Crore Company reported net profit after tax of Rs 70.00 Crore in latest quarter.
The brokerage values IndiaMART on a DCF basis at INR5,830 per share (+17% upside), on an assumption of 11% WACC and 5% terminal growth rate, implying a oneyear forward multiple of 55x.
Promoters held 52 per cent stake in the company as of Sept 30, 2020, while FIIs held 22.3 per cent, DIIs 5.7 per cent and public and others 20 per cent.
“Justdial has historically been a good company in the telephone-based directory market. However, B2B markets experience strong network effects — it’s not a one or two quarter game, and it takes decades to build a strong B2B platform,” said Dinesh Agarwal, CEO and MD of B2B marketplace IndiaMART. Agarwal was responding to an investor’s query during a call with investors on Tuesday to discuss the company’s Q2 performance, about how IndiaMART viewed Justdial launching its own B2B marketplace — JD Mart. The company saw a jump of 706% over last year in net profit, as it raked in ₹70 crore, as opposed to ₹9 crore last year.
Despite the new competition, Agarwal said that IndiaMART doesn’t see any immediate need to increase its advertising spending for increasing customers or platform traffic. “In any case, we don’t see advertising as a means to acquire traffic or customers. Advertising only helps in brand recall,” he added.
IndiaMART registered a traffic growth of 32% YoY with 259 million in Q2 FY21 as compared to 196 million in Q2 FY21. Total business enquiries delivered increased to 175 million from 123 million, a growth of 42% YoY. Supplier Storefronts grew to 6.2 million in Q2 FY21, an increase of 9% YoY and paying subscription suppliers grew to 141 thousand, a growth of 3% YoY.
Digital collection vs physical collection: When asked why the company still relied on a physical collection process, Agarwal said that 95% of the revenue that the company made this quarter came in through digital modes. “If you see pre-COVID, we used to do about 55-60% digital collection. It will never become 100%, since for a lot of our customers in the higher subscription models, their deal sizes are ₹2-3 lakh, and you have to go and meet the management of these companies, and in those sases, making a phone based sale done will be difficult,” he added.
Lending coming to IndiaMART?
When asked whether the company will introduce more payments features on its platform, Agarwal said that “there are some new innovations by these new age dukaan-tech companies, and we are learning from them”. “Historically we have been trying to move closer to the transactions as much as possible. We started to add a lead management system which is being utilised by buyers and sellers and then we added payment options. B2b order sizes are much higher, so our payment gateway is used only for smaller transactions,” Agarwal added.
Subscribers grew: It posted a revenue of ₹163 crore, out of which 95% is contributed by subscriptions to its various tiers of services. Paying subscribers on the platform stood at 141,000, an increase of 3% over last year.
Platform traffic saw a spike in the September quarter — it was 259 million this quarter, compared to 191 million in the previous quarter, and 196 million in the same quarter last year. Almost 82% of this traffic came via mobile phones, the company said.
Noida, India, Nov 9, 2020: IndiaMART InterMESH Limited (referred to as “IndiaMART” or the
“Company”), today announced its financial results for the second quarter ending September 30, 2020.
IndiaMART reported consolidated Total Revenue from Operations of Rs. 163 Crore in Q2 FY21, a growth
of 4% y-o-y, supported by marginal improvement in realization of existing customers and increase in
number of paying subscription suppliers amidst the ongoing Covid-19 pandemic. Consolidated Deferred
Revenue declined marginally from Rs. 631 Crore in Q2 FY20 to Rs. 628 Crore in Q2 FY21.
Consolidated EBITDA was Rs. 82 Crore as compared to Rs. 36 Crore in Q2 FY20. Increase in EBITDA
margin to 50% in Q2 FY21 from 23% in Q2 FY20 was primarily driven by sustained as well as temporary
benefits arising from various cost optimization initiatives undertaken during last six months. Consolidated
EBIT was Rs. 77 Crore as compared to Rs. 31 Crores in Q2 FY20, representing a growth of 147% y-o-y.
EBIT margin increased to 47% in Q2 FY21 from 20% in Q2 FY20.
Profit before Tax was at Rs. 93 Crore and Net Profit was Rs. 70 Crores, representing margins of 51% and
Consolidated Cash Flow from Operations for the quarter was at Rs. 78 Crore. Cash and Investments balance
stood at Rs. 1,045 Crore as on September 30, 2020 as compared to Rs. 780 Crore on September 30, 2019,
an increase of 34% YoY.
IndiaMART registered a traffic growth of 32% YoY with 259 million in Q2 FY21 as compared to
million in Q2 FY20. Total business enquiries delivered increased to 175 million from 123 million, a growth
of 42%. Supplier Storefronts grew to 6.2 million in Q2 FY21, an increase of 9% YoY and paying
subscription suppliers grew to 141 thousand, a growth of 3%.
Q2 FY2021 vs. Q2 FY2020
▪ Consolidated Revenue from Operations of Rs. 163 Crore, YoY growth of 4%
▪ Consolidated EBIT of Rs. 77 Crore
▪ Consolidated Cash generated from Operations at Rs. 78 Crore
Commenting on the performance, Mr. Dinesh Agarwal, Chief Executive Officer, said:
“As we navigate through these unprecedented times and a volatile environment, we are happy to report a
moderate financial performance in this quarter. With the pick up in business activity and increasing
realization for online adoption by the small and medium businesses, our revenue and customers have shown
a positive recovery trend and helped us to maintain healthy margins as well as cashflows. Our investments
in the product over the last couple of years has strengthened the value proposition for our customers and
hold us in good stead to leverage the emerging market opportunities in these tough times.’’
Indian Business-to-Business e-commerce platform IndiaMART has clocked in moderate performance for the second quarter of the current financial year. Its revenue from operations rose 4% at ₹163 crore, while its consolidated EBIT stood at ₹77 crore, up 147% on a year-on-year basis.
Its net profit shows an eight-fold surge, but IndiaMART CEO Dinesh Agarwal attributed that as a one-time jump due to a tax readjustment last year. On a quarterly basis, its profit fell by 6%, resulting in a marginal dip in its share price on Tuesday. However, IndiaMART’s share price has more than doubled during the quarter.
Competition is rising for the country’s oldest e-commerce platform IndiaMART, with Just Dial launching its B2B e-commerce platform, and the push from Amazon and Flipkart in the B2B space.
Justdial – the 24-year old local discovery platform –- is set to launch its own B2B (business to business) marketplace called JD Mart. This will be in direct competition to IndiaMart, which has had an unchallenged run for 24 years.
But Agarwal isn’t worried about competition from JD Mart, at least not right away. “There are various kinds of B2B businesses and there are players like Amazon, Walmart. Let us see what JD Mart comes up with,” he said.
Agarwal said that you can build a feature, but the kind of data, insights and algorithms IndiaMART has put together over the years can’t be launched overnight. “It will be a 3-5 year journey and at the end of it the buyers and sellers will see who offers a better value proposition to them. For any new player to do sales is one thing, but getting the product right is a long term plan. We didn’t build IndiaMART over a couple of quarters. Just Dial is a great company and I’m sure they will find something new, some day,” said Agarwal.
During an interview with Business Insider, IndiaMART CEO Dinesh Agarwal explained the two main changes that the company dealt with during the second quarter. “There has been a definite shift in online adoption and the second, the kind of fear everyone had in mind initially has gone away. So, the overall economy has started to move on from June,” he said.
Agarwal added that the COVID impact hasn’t completely worn off as 20% industries listed on IndiaMART continue to struggle while 30-49% of them are doing better than pre-COVID time too.
One of the biggest differences has been that the lockdown has resulted in a 30-40% growth in their buyer side traction. “The number of buyers have gone up and their repeat rates have also gone up. Our number of buyers has gone up 30-40% from last year and the repeat rate from those buyers has gone up from 55% to 60%, which has further strengthened our network effect,” he said.
With the economy opening up, offline retail once again poses competition to IndiaMART. Agarwal agrees but adds that the adoption of online seen in April, May and June is higher than ever before, and the impact continued even in the second quarter. “Even if 5% of people go back to offline, the new normal of the internet has happened and it’s not going to vanish,” he said.
However, IndiaMART’s seller subscribers are yet to reach its pre-COVID levels and Agarwal believes it will take four-five months for them to completely get back to normal.
Agarwal understands that most of his buyers come from smaller cities for whom ‘search’ and using correct English might not be the first option. And that’s why IndiaMART continues to invest in voice search, AI/ML and language options for sellers and buyers. “For example, even if you write 300 different spellings of jewellery on IndiaMART, you will still get the right result,” he said.
And that’s why the company doesn’t shy away from tech investments. Of IndiaMART’s total expenses, 20% of it goes into investing in products and technology. And out of the 4500 employees, 20% of them are in product and technology.
Justdial – the 24-year old local discovery platform – is placing a new big bet. The company is set to launch its own B2B (business to business) marketplace called JD Mart. This will be in direct competition to the country’s oldest e-commerce platform IndiaMart, which has had an unchallenged run for 24 years.
Even the entry of Alibaba and Walmart into India’s wholesale market had not threatened IndiaMart as much as Just Dial’s JD Mart might. Global investment bank UBS added fillip to the excitement among Just Dial’s shareholders by raising the target price for the stock from ₹640 to ₹800. The shares of Just Dial jumped by over 3% in early trade on Wednesday.
JD Mart – powered by Justdial’s existing strengths
The potential and excitement for Justdial’s new platform comes with the fact that the company already has a strong foothold in the market and a loyal user base. According to a report by UBS, the company will be able to leverage its already existing 140 million quarterly unique users and 100,000 paid B2B subscribers to sell JD Mart.
A snapshot of Just Dial before JD Mart
IndiaMart has a headstart but e-commerce in India is so young that analysts are excited. “While IndiaMART is the leader with 150,000 paid subscribers (2.5% of listings) and $90 million in revenue in FY20, this is a fraction of the number of MSMEs in India. Given room for growth, we think two or more B2B platforms can co-exist,” said the UBS report. MSME stands for micro, medium and small enterprises.
And Just Dial is pumping big money to capture this space. For the launch of the new platform, the company has already earmarked $15 million (₹110 crore) for marketing, branding and hiring. That is equal to the money spent by the company on advertising and promotion in the last two years combined.
“We think Justdial has developed a superior platform on the backdrop of an interactive user interface along with robust depth and breadth of B2B product offerings. JD’s core strength is its large sales force (9,000), which should aid monetizing the new platform,” said the UBS report.
IndiaMart and JD Mart will have to share
India’s current B2B online marketplace has a clear leader – IndiaMart. Led by Dinesh Agarwal, the company has secured its position in the B2B marketplace space with over 150,000 subscribers. Its growing popularity has even led to analysts comparing IndiaMart to Chinese giant Alibaba (which is yet to make a mark in the Indian market).
The platform has over 68 million product listings across 100,000 categories. “If you can’t find something on IndiaMart, you won’t find it on the internet,” Agarwal had told Business Insider in an earlier interview. Agarwal believes this also keeps them different from their rising list of B2B ecommerce competitors – Amazon, Alibaba, Flipkart wholesale, TradeIndia, and ExportersIndia.com among others.
However, JD Mart is coming in with the exact same payment model as IndiaMart: a ‘freemium’ model where subscription is free but leads are chargeable and it is followed by a charged subscription model for premium users.
A couple of years ago, I was standing on a platform in the New Delhi train station and noticed several
men watching a big Mumbai-Delhi cricket match on a crystal-clear video feed streaming from their smart phones. The service worked as well as any live stream I could pull up at home in Austin, Texas. Yet in some ways the scene was right out of the 19th century — the air was dusty and hot; there were far more passengers waiting than benches for them to sit on; and it was impossible to ignore all the aromas that waft through India’s public spaces.
This tension between 19th century challenges and 21st century opportunities creates interesting dynamics for the 86 percent of global consumers who live in developing countries and the businesses that serve them. The majority of Indians don’t have access to indoor plumbing or electricity; many rural citizens, in particular, don’t have access to high-quality health care and school — but digital technologies have the potential to address many of those challenges.
I was already thinking about this in 2017, when I saw the trailers for “Toilet, a Love Story.” Based loosely on a true story about an Indian woman who refused to move in with her new husband because he didn’t have an indoor toilet, the film resonated across India. Almost half of the country’s population still defecated in the open, according to UNICEF. So, to help improve sanitation and to reduce incidents of harassment against women, Prime Minister Narendra Modi pledged to build 100 million new toilets across the country as part of the Swachh Bharat Mission. Residents could use a mobile phone app to find the nearest toilet, following the advice of billboards that said: “When nature calls, use your phone!” And while stubborn habits and issues with the program’s administration remain, the government provided toilets to more than 600 million people in five years, according to Modi.
The most successful consumer goods companies in India use digital technologies to connect with millions of rural consumers, expand markets by improving economic opportunity, and improve the health and welfare outcomes. Consider the rise of Reliance Jio, the telecom company founded in 2016 by India’s richest citizen, Mukesh Ambani. By providing lower-cost phones and offering consumers free 4G data connections for the first seven months, Jio amassed a huge subscriber base in less than two years and set itself up to reshape all kinds of Indian marketplaces — so much so that Jio has been valued at $65 billion and multiple companies, including Facebook, have acquired a stake in it.
Consumer goods companies need to understand the opportunities — and challenges — this juxtaposition poses.
The success of IndiaMART, an e-commerce platform, illustrates how companies can expand their own market opportunities by connecting local businesses and consumers to the outside world. Digital technologies facilitate these interactions at macro and micro levels, providing an opportunity to tap both large groups and niche audiences. In some cases, they cater to urban, educated consumers: Prime Minister Norendra Modi loves the Gucci mushrooms that IndiaMART carries. But the site also helps rural consumers — during a visit to company headquarters, I observed dozens of people selling cow dung and urine for use in organic farming.
Facilitating new connections between sellers and buyers can foster prosperity and spending power for SMEs, but it’s good for IndiaMART, too, which has enjoyed exponential growth and recently launched an initial public offering.
Digital technologies have allowed innovative companies to blend online and offline interactions in ways that allow them to reach consumers who are less affluent or live outside urban markets. To a great extent, Indian retail will skip the large shopping mall and big-box phase, leapfrogging instead to digital sales (though bricks-and-mortar and similar in-person interactions will persist).
Thanks to the rapid emergence of digital wallets and payment platforms, online marketplaces such as Flipkart, Grofers and now JioMart have flourished, with plenty of room to grow. According to the Wall Street Journal report, Forrester Research Inc. expects Indian e-commerce sales will more than double to $68.4 billion by 2022 from $26.9 billion in 2018. That’s not just an affluent, urban phenomenon; digital technologies are enhancing the welfare of rural and less-affluent consumers, as I observed in 2018 while conducting interviews in Gurgaon. I went from a conversation with Uber, where managers explained how rural workers were streaming into urban centers to make money as drivers; to an in-depth discussion with the co-founder of Eko Financial, who talked about how their platform allowed for a frictionless, nearly real-time option for those same drivers to transfer money back home to family; and then to a small shop in the DLF Phase 3 development in Gurgaon in suburban New Delhi, where a merchant attended to drivers, delivery-wallahs and others who regularly sent money back to their home villages over the Eko platform. Launched in 2007, Eko caters to urban migrants employed informally. As customers become more familiar with digital payments, they’ve also used Eko to make utility payments or to top off mobile phone credits. Prior to the pandemic, Eko alone was processing domestic remittances worth roughly $330 million a month.
The key to success in this context is to customize the technology to the local market, rather than waiting for the market to adapt to the technology.
Maintaining an efficient supply chain can be especially difficult in developing countries. Companies need to modernize logistics, but in a way that adapts to on-the-ground realities. Consider, for example, the case of Rivigo, a trucking company headquartered in Gurgaon. Rivigo transformed how trucking and delivery can be done in India, adapting both digital systems and the physical construction of its trucks to improve efficiency and quality of life for its “pilots.” In the past, India’s disorganized market and challenging infrastructure meant that truck drivers had to leave home for long periods of time. Because the cabs and trailers of most trucks in the country were inseparable, drivers couldn’t leave a trailer behind at a warehouse and hitch up to a full load, nor could they drop a trailer for another driver to take across the next leg. Rivigo changed that, creating what it calls “relay as a service” trucking that allows drivers to relay trailers from hub to hub, allowing them to stay closer to home and spend more time with family — and allowing the company to keep its thousands of trucks on the move.
Already a hit with drivers, Rivigo became a hit with customers by heightening efficiency and slashing turnaround times. It did this by making each truck into a driving Internet of Things. The company covers trucks and trailers with an array of intelligent sensors that constantly interact with a real-time, responsive logistics network. For example, “smart” tires alert drivers to problems with tire pressure, vertical load, and temperature. Trucking and fleet companies can use the data to measure when repairs might be needed, retain their production and delivery records, and lower the amount of downtime for drivers. The drivers, meanwhile, have an app they can use to track trips, stay in touch with managers, and stay on schedule. All told, the company tracks almost 200 data points, all of which serve as performance measures for drivers. Rivigo slashed 50 to 70 percent off turnaround time and significantly cut costs for clients in the e-commerce, pharmaceutical, automotive, cold chain and FMCG sectors.
Imperfect infrastructure — as well as limited digital access and skills — have left emerging markets with shallower data pools than those in developed markets. Language and literacy can also be major obstacles on digital platforms, especially in India, where residents speak 22 “scheduled” languages, 99 other languages, and thousands of different dialects and pidgins.
Companies need to adapt to those realities — and the ones that do so can find ways to empower their customers. When it launched in 2012, SocialCops wanted to bring the Big Data revolution to challenges that affect the well being of billions of people who don’t have robust digital footprints.
One of SocialCops’ most remarkable programs is the Pradhan Mantri Ujjwala Yojana, an initiative started in May 2016 to replace chulhas — the traditional clay stoves that burn wood, coal, dung or other dirty fuels. The World Health Organization estimates that unclean cooking fuels lead to a half million deaths per year, mostly of women who inhale the equivalent of 400 cigarettes an hour when cooking at home. Nearly half of Indian households don’t have access to clean fuel, so the Ujjwala Yojana program — a partnership between SocialCops, the Ministry of Petroleum and Natural Gas, and the country’s three oil marketing companies — set out to provide free liquid petroleum gas (LPG) connections to households below the poverty line.
To make the program work, officials first needed to make sure more people could access an LPG distribution center. SocialCops analyzed more than 6 million data points to identify the best sites for 10,000 new centers. They analyzed clusters of villages to find the best locations, and then provided a visualization platform that allowed officials to make effective decisions. Next they set out to understand customer-application processes. More than 100 million applications generated a deep enough data pool to allow officials to track what worked and what didn’t. At one point, for example, the Ministry noticed that women were disproportionately rejected by distributors because they didn’t have bank accounts. So, they coordinated with another government initiative to expand access to financial services, virtually eliminating rejections based on lack of bank accounts — a step that, in itself, has empowered tens of thousands of Indian women over the past decade.
For government and company administrators, the SocialCops dashboard ensured greater transparency across six levels of hierarchy, from government offices in Delhi down to the citizens in small villages. Top government ministers could look at the village level and see where the program is available, how well it’s running and how to improve it. That unparalleled transparency and insight helped link the program to more than 22 million women in the first year. In its second year, it reached 40 million women, so they upped their goal from 50 million to 80 million women. According to the SocialCops website, the program now includes more than 72 million connections.
With a little ingenuity, companies can facilitate big wins for disadvantaged consumers using digital technologies — and make a good living doing it.
New Delhi, 16th September 2020: IndiaMART InterMesh Ltd., today announced that Bajaj Consumer Care has engaged the services of IndiaMART platform to target potential customers of FMCG products range in the B2B category.
On this development, Mr Jaideep Nandi, MD, Bajaj Consumer Care Ltd. said, “Looking at the current trend of increasing consumer traction on the e-commerce platforms due to the coronavirus pandemic, it is the right time to expand our footprints into online B2B consumer market segment. Today, IndiaMART is the go-to marketplace for all types of businesses with a pan India coverage. We are hopeful to strengthen the online reach and visibility of Bajaj Consumer Care FMCG products with the increased digital presence.”
IndiaMART, is the largest B2B online marketplace in the country with over 100 million registered users. IndiaMART exploits the latest in technology like artificial intelligence, machine learning and data analytics to leverage the robust behavioural matchmaking that connects suppliers with relevant buyers and vice versa, helping businesses to scale up with increased exposure on India’s largest online marketplace.
The e-commerce sector in India has witnessed tremendous growth in recent years, and the pandemic has brought in a new wave of consumers looking for contactless buying. The rising internet and mobile penetration in India have resulted in the rapid adoption of the e-commerce model of business and it is estimated to become a $230 billion industry by 2028 accounting for almost 10% of the retail market.
Speaking on this development, Mr. Dinesh Gulati, COO, IndiaMART InterMESH Ltd., said, “Enterprises all over the world are looking to explore digital channels to expand their reach and visibility, to target new customers not being serviced directly through existing sales and distribution networks. Online has become the new norm especially post the Coronavirus outbreak, wherein the businesses are trying to explore the digital way of doing business. IndiaMART provides an enabling marketplace and a large ecosystem to buyers and sellers to expand their reach and penetration.”
He further stated, “In the last six months we’ve witnessed above 40% growth in buyer traffic for consumer care products such as hair oil, face creams and sunscreen, and over 100% for hand sanitizer. This association will enable Bajaj Consumer Care with an alternate sales channel to reach high intent buyers easily.”
Today, more and more businesses are utilizing digital mediums for generating leads backed with insights into the consumer mindscape. Digital platforms like IndiaMART provide a significant understanding of the way people are engaging online for enquiries, purchase decision making and sales. Several enterprises are already generating leads from potential buyers through IndiaMART’s Enterprise Solutions initiative, thus unlocking the digital way of doing business. Today, more than 350+ leading brands across major industries like Healthcare, Construction Equipment, Oil & Lubricants, Generators, Commercial ACs, Farm Equipment, Hand and Power tools, Commercial Vehicles are executing plans to generate incremental business growth through their association with IndiaMART.
IndiaMART is India’s largest online B2B marketplace for business products and services. IndiaMART makes it easier to do business by connecting buyers and sellers across product categories and geographies in India through business enablement solutions. IndiaMART provides ease and convenience to the buyers by offering a wide assortment of products and a responsive seller base while offering lead generation, lead management and payment solutions to its sellers.
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Today, organically we have been able to get 107 million registered buyers, Dinesh Agarwal said
Dinesh Agarwal is the founder and CEO of IndiaMART.com, India’s largest online B2B marketplace for small and medium enterprises. Dinesh founded the company in 1996 and since then has steered it to become the world’s second-largest B2B marketplace today.
Prior to taking a plunge into entrepreneurship, he is Computer Engineer from HBTI, Kanpur worked with industry leaders such as HCL Technologies (America), Center for Development of Telematics (C-Dot) and CMC Limited before returning to India. His rich experience spans over 20 years in the field of Internet, Networking & Systems Development and Consulting.
In an interaction with Mamta Maity, indiainfoline.com, Dinesh Agarwal, founder and CEO of IndiaMART.com said, “our beta is 73 crores for the quarter as compared to 37 crores last year, same quarter. This shows 100% yoy growth but it is primarily because the current quarter was under severe lockdown, so we had a lot of cost savings, one-time temporary cost savings.”
We posted a total revenue from operations about Rs153cr in this quarter and it is about 4% yoy growth despite the fact that there has been a clear impact on the economy and MSMEs in general during the quarter due to the pandemic and lockdown. Our beta is 73 crores for the quarter as compared to 37 crores last year, same quarter. This shows 100% yoy growth but it is primarily because the current quarter was under severe lockdown, so we had a lot of cost savings, one-time temporary cost savings.
So, two kinds of cost savings are possible one which is permanent automation and lead cost-saving and another, which were temporary like some rental waiver we received some salary waivers we received from employees. So that is why the data has jumped almost double.
We have about fixed 6 million suppliers who are listed on our platform with the 68 million products and services spreading across 100,000 product categories and we have a paying customer base of 1,33,000 now on an average revenue per customer of about 45,000 rupees. We get about over 60 million visits on our platform every month by the buyers by traffic and 82% of them are coming on our mobile website and mobile apps. And a hundred percent of this traffic is organic traffic. We do not spend any money on advertising or anything else. Today, organically we have been able to get 107 million registered buyers. Every month we do more than 40 million barrels’ supplier matchmaking. From last many years our growth rates have been in the range of 25 to 30%.
So, I think current challenges from last one year if you see the economy was already growing through pain of first there was a demand slowdown because of the last two-three years of an economic slowdown. For example, last year in September, October, they have reduced the corporate tax from 33% to now 25%. And for the new manufacturing companies, the taxes reduced to even 20% or lower. So, I think the government is trying it’s big with the GST now nationwide shipment of goods has become easier.
So, I think the current challenge remains that economies under lockdown. And most of the company’s sales and service used to happen. Now two-thirds of our sales and service used to happen through by way of Field Sales operations and since our customers are under lockdown as well as we cannot send our people because of the fear of the corona and we do not want them to spread out into the market. So, I think that is what is the current challenge.
The benefits side, we are sitting on a strong balance sheet. We are still a profitable company. We do not have debt and we have a very good brand advantage that we have gained over the last many years and it has only strengthened in the last couple of months. So, I think there are challenges and opportunities that are there which will help us grow the business and help the nation in a better manner.
So, I think most of our businesses in India are not India 80% of our customers and 80% of our buyers are in India. So, in terms of the named customers, you can name some of them. Like for example, we have as I told you, Tata Steel is our customer Tata Motors is our customer, Airtel, customer Bosch has been around estimated canon has been our customer. curcuminoids have been our customer. ABB is our customer. Siemens is our customer; Philips healthcare is our customer. So, we have customers in different industries.
We believe that the worst is behind us and I think we will start to at least stabilize our business operations this quarter. Ever since the last one has happened from June. The business has started to do better. Yes, of course, the uncertainties continue as the coven. No fear looms. But we believe that you know, Delhi, Mumbai kind of cities, maybe the worst is behind us. So, I think next quarter should be better than the previous quarter for sure.
In terms of initiatives for the employees, I think we have taken multiple employees for multiple initiative first, we as a company never had a work from home systems and operations set up. So, I think in one, we did not lay off any person in different tires. We have about 5000 people 4700 people; we did not know lay off any single person.
And for the partners, which are basically mostly our customer partners. I think we have been able to operate, first of all, work from home to be able to answer their queries to be able to serve them properly. Number two, anybody who came back to us and said that our business is under lockdown, and we cannot pay you renewal. We have given them an extension so that when their business opens up again, they can start to pay. So, we have given the moratorium to our customers and partners. So I think many of our low level low, low salary staff which used to work in our offices, like, no sanitation staff or canteen staff or security staff, we have continued to give them you know, as part of our CSR initiative, we have continued to help them from there.
So I think multiple areas that we have worked upon to help our employees not only help our employees help our company brand also, secondly, during the last three, four months, I think IndiaMart has played a very important role in making sure that the health and sanitization and safety and food products are available to Indians at large because nobody knew where could you get a PP kit from, or nobody knew where could you get a face mask from or nobody knew. Where could you get a face shield or a ventilator or oxygen cylinder. India might be the probably all leap source which had access to these suppliers, and we worked innovatively, we call each and every supplier to say can you make for facemask Can you make news clipper Can you make elastic for facemask Can you provide us you know if you are a helmet maker Can you provide make face shield So, we have and we have quickly turned prime minister also said that from almost zero p peak manufacturing in India now we are a surplus PP gate manufacturer in India suddenly you know we are becoming an exporter of that similarly many medicines and food supplies we were the only supplier if you needed disinfectant.
You must have seen disinfectant sprays happening by multiple governments and multiple municipalities, corporations, these disinfectant chemicals were made available on India Mart site I think we have done a great service. Great help in making sure that our health workers our medical needing people and our food needing people do not at least get to in the lockdown a time at least get to know who is supplying what. So that has that is that has been our key agenda over the last two, three months.
Shares of IndiaMart InterMesh hit a fresh record high of Rs 3,883 apiece on the BSE on Tuesday, up over 10 per cent against Monday’s close of Rs 3,519.50. With today’s gain, the stock of the company has rallied 62.6 per cent in the past two months as compared to over 11 per cent gain in the benchmark S&P BSE Sensex, ACE Equity data show.
At 10:24 AM, the stock was trading nearly 8 per cent higher at Rs 3,800 on the BSE as compared to a 0.25 per cent rise in the benchmark S&P BSE Sensex.
Last week, the domestic brokerage firm Motilal Oswal Financial Services (MOFSL) had initiated the coverage on IndiaMart InterMesh with a “BUY” rating.
“In the past three years, the scalability of paid suppliers and request for quotation (RFQ) relevancy have led to a 26 per cent revenue compound annual growth rate (CAGR). Negligible spends on advertising over FY18–20 have led to turnaround in margins to 23 per cent in FY20 from -19 per cent in FY17. IndiaMART has shown tremendous resilience on the margin front. Despite a 50 per cent drop in collections for 1QFY21, the company has been able to increase margins on significant rationalisation in the operating cost,” MOFSL said in its report.
Shares of IndiaMart InterMesh were listed on the bourses in July 2019. The initial public offering (IPO) of the company had received a strong response with bids for 97 million shares. The IPO was subscribed 36 times. The qualified institutional buyers (QIBs) category was subscribed 31 times. The non-institutional investor’s category was subscribed 62 times. The retail individual investors (RIIs) category was subscribed 14 times.
For the quarter ended June 2020, IndiaMart had posted a 128.7 per cent jump in its consolidated net profit at Rs 74.1 crore against Rs 32.4 crore in the year-ago period. Total income came in at Rs 186.8 crore, up 15.59 per cent against Rs 161.6 crore in June 2019 quarter. Revenue from operations was Rs 153.1 crore, up 4 per cent year-on-year (YoY).
The company boasts of a strong network effect, resilience to supplier ROI, diversified exposure, and a robust Search Engine Optimization strength – which, according to Motilal, are its key differentiators.
Mumbai: Shares of IndiaMart continued the winning streak for the fourth consecutive session, with a 5% gain so far this week. The company was in the limelight today as Motilal Oswal initiated its coverage on the stock, calling it a “play on digitizing MSMEs”.
IndiaMart is the country’s largest B2B online classifieds marketplace, with more than 70% market share. The platform has more than six million supplier listings for 68 million products across one lac plus categories from 1000 plus cities.
The company boasts of a strong network effect, resilience to supplier ROI, diversified exposure, and a robust Search Engine Optimization strength – which, according to Motilal, are its key differentiators.
According to the brokerage, IndiaMart operates in a sweet spot, wherein high-growth SMEs fuel the top line and a subscription-based model limits the risk of default.
Analysts believe the margins of IndiaMart mirror the positive operating leverage from revenue growth in the business. The brokerage bets on the resilience shown by the company on the margins front.
Despite a 50% decline in collections for Q1FY21, IndiaMart reported an expansion in margins on significant rationalization in operating costs. Motilal forecasts a sharp turnaround in FY22 operations on account pent-up demand, a stable base of suppliers, the need for out-of-the circle buyers, and increased internet penetration. The company too is banking on increased digital adoption among SMEs.
According to Motilal, the underlying market is expected to grow at a 25% CAGR over the next five years, thereby, opening up an immense opportunity for growth.
The analysts at Motilal bet on the strong moats shield from disruption, high FCF yield and the strong balance sheet of the B2B classifieds player.
They forecast an 8 percentage points margin expansion over FY20–23 on account of the better management of cost structure and operative leverage in the business, as they initiate their coverage on the counter with a ‘Buy’ rating and a target of Rs. 3,550 apiece.