Buy IndiaMART InterMESH, target price Rs 7200: HDFC Securities

HDFC Securities has buy call on IndiaMART InterMESH with a target price of Rs 7200. The current market price of IndiaMART InterMESH is Rs 4869.6. Time period given by analyst is one year when IndiaMART InterMESH Ltd. price can reach defined target.

IndiaMART InterMESH Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 14965.33 Crore) operating in Services sector.

IndiaMART InterMESH Ltd. key Products/Revenue Segments include Income From Information Services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 210.00 Crore, down -1.78 % from last quarter Total Income of Rs 213.80 Crore and up 5.95 % from last year same quarter Total Income of Rs 198.20 Crore. Company reported net profit after tax of Rs 73.30 Crore in latest quarter.

Investment Rationale
IndiaMart is expected to post a strong quarter on account of economic recovery, improved business sentiment, and easing of mobility restrictions. The brokerage expects a healthy addition of ~8K paid suppliers, with most of them in the monthly package and some of the lost suppliers are expected to return to the platform. It expects revenue to increase +6.3% QoQ and margin will decline 221bps QoQ to 39.7% on account of increase in investments. The collections will improve significantly in the quarter (INR 3.11bn +40/14.2% QoQ/YoY) setting stage for growth uptick in FY23E. It expects revenue/EPS CAGRs of +26/16% over FY22-24E. It maintains BUY with a DCF-based target price of INR 7,200, implied P/E of 53x FY24E.

Promoter/FII Holdings
Promoters held 49.52 per cent stake in the company as of 31-Dec-2021, while FIIs owned 26.53 per cent, DIIs 5.33 per cent.