Indiamart Intermesh shares: Why the stock plunged 10% today; is it a buy?

Shares of Indiamart Intermesh Ltd plunged 10 per cent in Wednesday's trade as the December quarter results failed to meet Street expectations. Analysts tracking the company said while the reported financial performance was healthy for the quarter, the paid customer addition remained muted and is a matter of concern.

IndiaMart continued to report elevated churn in the silver category despite last six quarters of efforts, said Nuvama Institutional Equities.

While the management has undertaken various efforts including focusing on quality of subscriber, making changes in algorithm and additional feature on platform, still subscriber churn remained unabated, the brokerage said.

"We are yet to see any meaningful sign of improving subscriber retention. Maintain ‘REDUCE’. Cuts in our estimates were limited as our estimates were already 10 per cent lower than consensus," Nuvama said.

Indiamart Intermesh shares fell 10 per cent to hit a low of Rs 2,064.10 on BSE today.

MOFSL said it is confident of strong fundamental growth in operations, propelled by higher growth in digitisation among SMEs, the need for out-of-the-circle buyers, a strong network effect, over 70 per cent market share in the underlying industry and the ability to improve ARPU on low price sensitivity.

It values Indiamart Intermesh on a DCF basis to arrive at target price of Rs 2,600. 

HDFC Institutional Equities expects the margin to stabilise at 30-35 per cent once growth resumes. IT maintained Indiamart's revenue estimate but cut EPS estimates for FY26 and FY27 by 3-5 per cent as higher investments will be required to boost growth. 

"We maintain BUY with a DCF-based target price of Rs 2,730, led by revenue/EPS CAGR of 17 per cent/20 per cent over FY24-27. 

Centrum Broking said the focus remains on driving higher paid customer additions in coming quarters, which have been impacted due to high churn in Silver monthly packages.

"We roll over to Sep’26E for valuation and maintain REDUCE Rating on the stock with revised target price of Rs 3,098 (vs Rs 3,154 earlier) at PE of 32x on Sep’26E EPS. We have reduced target PE multiple from 35x to 32x to account for reduced rate of addition of paid suppliers," it said.