Indiamart Intermesh delivered strong Q3FY25 earnings, with profit jumping nearly 48% year-on-year. However, despite the solid financial performance, the stock faced a sharp 10% decline post-results. What’s driving this contradiction? Let’s break it down.
Indiamart Q3FY25 financial performance: Strong numbers, but concerns remain
Indiamart Intermesh, India’s largest B2B e-commerce marketplace, reported its Q3FY25 results on January 21, 2025. The company showed strong revenue growth and a significant increase in profitability, yet its stock tumbled due to concerns raised by analysts.
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Here’s a quick look at the key financials:
Revenue and profit growth
| Metric | Q3FY25 | Q3FY24 | YoY Growth |
| Revenue (₹ Cr) | 354.27 | 305.26 | +16.06% |
| Net Profit (₹ Cr) | 121.00 | 81.83 | +47.87% |
| Operating Income (₹ Cr) | 159.11 | 77.34 | +105.73% |
| EBITDA (₹ Cr) | 138.3 | 85.7 | +61.4% |
| EBITDA Margin | 39% | 28.1% | +10.9% |
Quarter-on-quarter comparison
While the YoY performance was strong, the QoQ numbers showed a slowdown:
| Metric | Q3FY25 | Q2FY25 | QoQ Growth |
| Revenue (₹ Cr) | 354.27 | 347.67 | +1.9% |
| Net Profit (₹ Cr) | 121.00 | 135.13 | -10.46% |
| Net Income Before Tax (₹ Cr) | 158.99 | 177.29 | -10.32% |
- Net profit fell 10.46% compared to Q2FY25, signalling a slowdown in profitability.
- Revenue grew just 1.9% QoQ, which is weaker than previous quarters.
While revenue and profit still look solid YoY, short-term growth appears to be losing steam.
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Why did Indiamart’s share price fall despite strong earnings?
After announcing these numbers, Indiamart’s stock dropped 10% to ₹2,064.10 on January 22, 2025. Here’s why:
1. Analysts turned cautious
- Several brokerages downgraded Indiamart’s stock due to concerns about slowing subscriber growth and high customer churn.
- Nomura downgraded Indiamart to ‘Neutral’ and slashed its target price from ₹3,150 to ₹1,900.
- Nuvama also reduced its target price to ₹1,970, citing the first decline in subscribers since COVID.
2. Slower customer additions & weak collections
- Indiamart’s paying subscriber base declined for the first time since COVID.
- Standalone collection growth was just 8% YoY, raising concerns about future earnings momentum.
- Management’s guidance for less than 10% growth in collections for the upcoming quarters added to investor worries.
3. Market reaction to stock performance
| Timeframe | Stock Performance |
| Last 1 Week | +1.78% |
| Last 3 Months | -9% |
| Last 6 Months | -20.54% |
| Year-to-Date (YTD) | +2.05% |
- Indiamart’s stock had already fallen 20.54% in the last six months, meaning investors were already cautious.
- Even before Q3FY25, the stock had struggled to gain momentum.
Indiamart’s financial health: Key numbers
| Metric | Value |
| Market Cap (₹ Cr) | 13,763.49 |
| 52-Week High (₹) | 3,198.4 |
| 52-Week Low (₹) | 2,165.55 |
| EPS (₹) | 16.74 (+23.27% YoY) |
- The company is still financially strong, with a growing EPS and strong profitability.
- Its stock price, however, is facing downward pressure due to slowing growth concerns.
Future outlook: What’s next for Indiamart?
Indiamart is profitable, debt-free, and showing steady revenue growth, but analysts remain cautious about subscriber retention and future collections.
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Key factors to watch:
- Subscriber growth: Can Indiamart reverse the decline in paying subscribers?
- Revenue expansion: Will the company maintain its strong revenue growth despite weak collection numbers?
- Stock recovery: Will investor sentiment improve as management addresses concerns?
For now, brokerages suggest a ‘Hold’ on the stock, but if subscriber retention improves, Indiamart could regain its upward trajectory.
