Buy IndiaMart, target price Rs 9320: Motilal Oswal

Motilal Oswals has a buy call on Indiamart with a target price of Rs 9320. The current market price of Indiamart is Rs 7726.25.

Indiamart Intermesh Ltd, incorporated in the year 1999, is a Mid Cap company with a market cap of Rs 24135.06 Crore, operating in Services sector.

Indiamart Intermesh's key Products/Revenue Segments include Income From Information Services for the year ending 31-Mar-2020.


Investment Rationale
Acccording to Motilal Oswal, apart from collections and revenue growth, Indiamart has shown higher resilience on the margin front. While it concurs that margin at current levels are not sustainable, it would see positive benefits from cost optimization and operating leverage in the long term.

Motilal remains confident of strong fundamental growth in operations, led by:

• Higher growth in digitization among SMEs (~25 per cent)
• The need for out-of-thecircle buyers
• A strong network effect
• Over 70 per cent market share in the underlying industry
• The ability to increase ARPU on low price sensitivity
• High operating leverage

Financials
For the quarter ended 31-03-2021, the company has reported a Consolidated Total Income of Rs 190.10 Crore, down 4.09 per cent from last quarter's Total Income of Rs 198.20 Crore and up 1.49 per cent from last year same quarter's Total Income of Rs 187.30 Crore. Company has reported net profit after tax of Rs 57.30 Crore in the latest quarter.

Promoter/FII Holdings
Promoters held 52 per cent stake in the company as of Dec 30, 2020, while FIIs held 24.8 per cent, DIIs 5 per cent and public and others 18.2 per cent.