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Yes securities Report
IndiaMart Intermesh Ltd. reported broadly inline financial performance for the quarter. The sequential revenue and Ebitda margin were along expectation.
It reported sequential revenue growth of 3.6% QoQ, led by 1.0% QoQ increase in the number of paid customers and around 2.9% QoQ increase in average realisation.
The growth in the number of paid customers was at around ~2000 QoQ. There was sequential improvement in Ebitda margin (up 92 basis points QoQ) led by decrease in other expenses.
The Internet traffic to the portal and the number of registered buyers grew during the quarter as per the trend.
It has dominant market share in B2B classified business with around 65% market share in paid listings. The strong performance is led by higher value proposition for sellers leading to higher pricing power, efficient matching algorithm resulting in higher buyer satisfaction.
As guided by management the growth in paid customers is expected to be between 7000‐8000 per quarter going ahead. The growth in collections remain robust and provides strong growth outlook.
Most of traffic on the portal is organic driven led by strong value proposition with little spending on advertising. Ebitda margin has stabilised after being under pressure recently and we expect it to reach around 30% by Q4 FY23.
We estimate revenue compound annual growth rate of 23.6% over FY23‐26E with average Ebitda margin of 29.4% over the period.
We maintain our 'Buy' rating on the stock with revised target price of Rs 3,350/share based on discounted cash flow methodology.
The stock trades at PER of 35.0 times /29.2 times on FY25E/FY26E EPS.
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