IndiaMart shares crack 10% as brokerages downgrade stock after Q3 results

IndiaMart Intermesh shares hit their 10% lower circuit at Rs 2,064.10 in early trade on Wednesday, January 22, after the brokerages downgraded the stock despite the company reporting a 36% jump in its consolidated net profit for the quarter ended December 31, 2024, to Rs 125 crore versus Rs 92 crore posted in the year-ago period.

The Q3FY25 revenue from operations stood at Rs 337 crore, a growth of 16% versus Rs 291 crore in the corresponding quarter of the previous financial year.

On a sequential basis, the revenue was up 1.6% versus Rs 332 crore reported in the July-September quarter. Meanwhile, profit after tax (PAT) fell 1.6% over Rs 127 crore reported in Q2FY25.


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Should you buy, sell, or hold IndiaMart InterMesh's stock? Here's what analysts say:

Nomura

Nomura downgraded Indiamart Intermesh to 'Neutral', reducing its target price to Rs 1900 from Rs 3150.

The decision follows an unexpected decline in the company's paying subscriber base and weak gross customer additions. Additionally, high customer churn raises concerns about future growth. Nomura anticipates that collections could remain weak in the near to medium term. Consequently, the brokerage has revised its FY25-27 PAT estimates by 4-13%.

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Nuvama

Nuvama retained its 'Reduce' rating on Indiamart shares, lowering the target price to Rs 1970 from Rs 2500.

The company reported its first decline in subscribers since COVID, and collection growth for its standalone business remains weak at 8% YoY. Management is guiding for less than 10% growth in collections over the coming quarters. While lower sales and marketing costs could boost short-term profitability, there are no meaningful signs of improved subscriber retention. As a result, medium-term growth is expected to remain under pressure.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)