IndiaMART Intermesh Shares Rally After Nuvama Doubles Target Price

Shares of IndiaMART InterMESH, India’s leading online B2B marketplace, jumped over 5.5% on Wednesday, June 25, following a bullish outlook from Nuvama Institutional Equities. 

The domestic brokerage firm upgraded the stock from ‘reduce’ to ‘buy’, citing the company’s entry into a new demand upcycle, supported by improving platform metrics and proactive management initiatives.

Source: Moneycontrol

In early trade, the stock was seen trading at ₹2,632.50, up 5.5% on the NSE, indicating strong investor interest following the upgrade.

Double Upgrade and Bullish Price Target

Nuvama gave IndiaMART a double upgrade, revising its recommendation from ‘reduce’ to ‘buy’. It also increased the target price from ₹2,100 to ₹3,800, implying a significant 52% upside from the current market price (CMP) of ₹2,500.

Source: Moneycontrol

Nuvama highlighted that IndiaMART is trading at a one-year forward P/E of 28x, notably below its historical average of 45x since listing. 

The brokerage anticipates a potential re-rating in valuation as the company’s growth outlook strengthens. 

It has introduced FY28 estimates and rolled forward its valuation to Q1FY28. By raising the target multiple to 35x, Nuvama arrived at a revised target price of ₹3,800 and subsequently upgraded the stock rating to ‘buy’.

Source: Mint

Company Overview

Before we explore the details further, let’s first understand what the company is all about.

IndiaMART InterMESH is India’s largest online B2B marketplace, connecting buyers with suppliers across a wide range of industries. The company enables small and medium enterprises (SMEs) to expand their reach digitally by offering lead generation, subscription-based services, and customer engagement tools. 

Known for its extensive supplier database and verified listings, IndiaMART plays a crucial role in digital commerce for Indian businesses. Its asset-light model, recurring revenues, and focus on technology-driven growth have made it a key player in India’s e-commerce ecosystem.

New Demand Cycle Driven by Platform Changes and Marketing Push

According to the brokerage, IndiaMART is entering a new demand cycle, driven by improved traffic, a rise in unique business enquiries, and ultimately a growth in net subscriber additions.

The management’s efforts such as platform enhancements and increased investment in marketing and branding to draw in buyers are expected to boost unique business enquiries, which will subsequently drive growth in net new subscriber additions.

Subscriber Churn and Metric Recovery

IndiaMART has been facing elevated churn in its silver subscriber segment for nearly two years. As a result, unique enquiries per paid supplier per quarter had dropped to 106 in Q1FY24, well below the long-term average of 130 and the pre-Covid benchmark.

However, the metric has shown steady improvement, rising to 125 in Q4 FY25. Nuvama appreciated the company’s approach of patiently addressing churn rather than aggressively pushing gross additions to offset losses.

Source: Economic Times/Moneycontrol

Revenue Upside Despite Margin Pressure

Alongside the rating upgrade, Nuvama also raised earnings estimates by approximately 9–10% for FY26E and FY27E, largely due to higher anticipated revenue growth. However, the brokerage also noted a lower profitability outlook, which it believes will not significantly affect investor sentiment.

Nuvama anticipates a recovery in collection growth, which is expected to drive overall revenue expansion. The brokerage believes this normalisation is unlikely to impact investor sentiment, noting that historically, the stock’s performance has shown little correlation with margin improvements, as investors have typically regarded higher margins as temporary.

Source: Economic Times/Moneycontrol

ARPU Growth and Monetisation Potential

Nuvama highlighted that Average Revenue Per User (ARPU) growth is already in place, laying a strong foundation for monetisation and sustainable growth. The brokerage expects that as traffic and business enquiries rise, they will lead to increased subscriber addition, which will then result in the acceleration of collection growth.

Conclusion

In summary, IndiaMART’s recent surge follows Nuvama’s upgraded outlook, driven by expectations of a new demand cycle, improved platform engagement, and subscriber growth. While the company continues to face challenges in subscriber churn and profitability, steady improvements in key metrics and ARPU growth have caught investor attention. 

With internal initiatives focused on long-term sustainability, IndiaMART remains a significant player in the evolving digital B2B landscape in India.

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