Indiamart Intermesh share price climbs 6.5% as Nuvama upgrades to 'buy', lifts target price to ₹3800

Indiamart Intermesh share price in focus today: Shares of Indiamart Intermesh, an online B2B marketplace, gained 6.5% in early trade on Wednesday, June 25, hitting a 8-month high of ₹2,655 apiece, mirroring the positive trend on Indian stock market. The rally in the multibagger stock came after investor sentiment turned optimistic, following an upgrade by domestic brokerage Nuvama Institutional Equities, which raised its rating on the stock from 'Reduce' to 'Buy.' 

The brokerage also raised its target price to ₹3,800 from ₹2,100, citing expectations of a new demand upcycle for the business.

This comes after earlier downgrades in October 2023 (to ‘Hold’) and October 2024 (to ‘Reduce’).

"IndiaMART is trading at a one-year forward P/E of 28x compared with its historical average (since listing) of 45x. We believe valuations will rerate due to the improving growth trajectory. We are introducing FY28E estimates and rolling forward our valuation to Q1FY28. This, along with an increase in the target multiple to 35x, yields a revised target price of ₹3,800. We upgrade our rating to ‘BUY’ (from ‘reduce’)," said Nuvama.

The brokerage also noted that management’s platform enhancements and increased investment in marketing and branding are expected to drive a rise in unique business enquiries and result in an uptick in net new subscriber additions.

Nuvama sees new demand cycle emerging by Q2/Q3 FY26

According to Nuvama Institutional Equities, IndiaMART has been grappling with elevated churn in silver subscribers for nearly two years. Unique enquiries per paid supplier dropped to 106 in Q1FY24, below the pre-COVID average of 130. However, recent platform improvements, selective insourcing of the sales force, and renewed investments in branding and marketing have started yielding results. This metric has shown a steady improvement during the LTM and is now at 125 in Q4FY25.

Nuvama noted that management’s decision to reduce supplier competition—bringing down supplier enquiries from 7 to under 4—alongside efforts to attract more buyers, will likely create a healthier marketplace dynamic. The brokerage believes that subscriber additions could begin improving by Q2/Q3, leading to a revival in collection growth.

"We argue that a new demand cycle is beginning," Nuvama said, "with improving traffic, higher business enquiries, and rising net subscriber additions expected to drive collection and revenue growth acceleration." With average revenue per user (ARPU) growth already visible, Nuvama believes IndiaMART is well-positioned to monetize its platform and sustain growth, while margins are likely to normalize around the mid-30% level, as guided by the company.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.