IndiaMART InterMESH Ltd. share price target

We reinitiate coverage on IndiaMART InterMESH (IndiaMART) with a BUY rating and target price of Rs6,000 (~38% upside).

Initiating Coverage Report

We recommend a BUY rating on the stock and assign a 45x P/E multiple to its FY24E earnings of Rs 150/share to arrive at a TP of Rs 6,800/share, implying an upside potential of 38% from the CMP.

We assign 45x to the company's FY24E earnings of Rs 150 to arrive at the target price of Rs 6,800/share, implying an upside of 52% from the CMP.

IndiaMART's 3QFY22 performance was weaker than expected led by lowerthan-anticipated revenue growth (at 8.4% YoY) and paid suppliers (up 6K QoQ, +5% YoY). Moreover, EBITDA margin (at 41.9%; down 370bp QoQ) contracted as employee cost shot up 25% YoY due to wage hikes and increased onboarding, while ARPU dipped 0.8% QoQ owing to higher share of suppliers within the lower value package, as business normalized. Conversely, collections remained encouraging at +25% YoY, suggesting good visibility on FY23 revenue growth. Similarly, deferred revenue also increased 25% YoY, which should support 20%+ revenue growth in FY23....

Q3 revenue up 3% QoQ, short of our estimates due to weak ARPU growth

Stock looks attractive following ~25% correction from its Oct'21 peak upgrade from HOLD to BUY with unchanged TP of Rs 8,430

Q2 performance in line as sales grew 12% YoY and EBITDA margin stood at 46%