Indiamart Intermesh Ltd - Research Report

Private Client Research




Ecommerce - Online Classifieds


Indiamart Intermesh Ltd

Ecommerce - Online Classifieds

July 31, 2020

Sensex: 37606.89

CNX Nifty: 11073.45


BSE: 542726

Reco Price
Rs. 2750.00
Price Target (3 - 6 Months)
Rs. 3435.00


July 31, 2020



CNX Nifty








Stock Data

CMP (Rs)
Face value (Rs)
52 Week Range (Rs)
2862.50 - 1102.95
Market cap (Rs Crores)
Price To Book Value (x)
P/E Ratio (x)

One Year indexed Stock Performance

Indiamart Intermesh Ltd Sensex
Indiamart Intermesh Ltd
Return (%)


(in %)

+91 22 6639 3000


Indiamart Intermesh Limited (IIL), incorporated in 1999, is India’s largest online B2B marketplace for business products and services with approximately 60% market share of the online B2B classifieds space in India. The company provides 10.2 crore+ registered buyers with access to 60 lakh supplier storefronts in India, which list 6.7 crore products and services across 56 industries as on March 2020. It provides a robust two-way discovery marketplace connecting buyers and suppliers. Buyers locate suppliers on its marketplace, including both Indian small and medium enterprises (SMEs) and large corporate, through a webpage containing the suppliers’ product listings. The company has limited capex requirements, improving fundamentals and growth in subscription revenue making it an attractive investment prospect. Brijesh Agrawal and Dinesh Chandra Agarwal are the promoters of the company.

The company earns revenues primarily by selling its subscription packages namely Platinum, Gold and Silver packages which are available for a month, year and multi-year. These packages offer the following benefits to suppliers: Listing of suppliers’ storefronts on the online marketplace based on priority, enhancement in business visibility, access to lead management system, integrated access to online payment gateway, and access to ‘Request for quotations’ (RFQs includes description of the product or service that a buyer seeks to purchase, its intended use, estimated purchase quantity and an indicative price). If a supplier is interested in fulfilling the order under the terms of the buyer’s RFQ, it can utilise RFQ credit and obtain the buyer’s contact information. In addition, the company also generates revenues by advertising on their website, sales of ‘Request for quotation ‘credits and payment facilitation service. It also allows sellers to list without subscribing and is free for buyers.

The company is India’s largest B2B online marketplace with robust execution skills

Rationale for Investment

India’s largest B2B online marketplace
The company is India’s largest online B2B marketplace with around 60% market share in online B2B classifieds. The company operates a product and price discovery platform, facilitating interactions between suppliers and buyers. The platform is unique as it enables two-way interactions—suppliers can post their listings and buyers can request for quotations. Their market leading position creates strong network effects as a large number of buyers on their online marketplace results in more enquiries for suppliers, which in turn attracts more suppliers to register and list products and services, consequently attracting more buyers.

Caters to diversified industry and product categories
The company offers a comprehensive breadth of listing products across a wide range of industries. Its products and services are well diversified and spread across 56 industries rather than relying on a single target industry. As on March 2020, the company’s online market place had a total of 6.7 crore listed products. The wide assortment of industry, product and service categories enables the company to secure a diversified revenue stream, which in turn, results in further growth of its marketplace and provides a broad range of products and services for buyers.

Technological competence
The company has a reservoir of supplier/buyer behaviour and preferences data, which enables it to deploy analytics to implement behavioural data, based algorithmic matchmaking on its platform, thereby ensuring much more relevant discovery of products and services. This leads to an increase in repeat buyers on its platform; the company had 55% repeat buyers as on March 2020.

Continuously improving its mobile platform and capabilities
Mobile platforms will continue to drive the growth of online commerce in India. As of March 2020, 76% of traffic (number of visits on the website) comprised of mobile traffic. Since the company’s mobile website and app are largely do-it-yourself tools, increased usage of its mobile platforms helps to increase operating efficiency. The company intends to continue investing in its mobile platform by further developing and integrating lead management system applications and user interface and notifications. The company encourages use of its mobile platform through targeted marketing initiatives such as integrated voice search, and by encouraging buyers to use the mobile platform to upload their RFQs.

Asset-light model
The company, being a mere intermediary, does not require huge capital expenditure, hence, costs associated with up gradation of technological infrastructure and employees are the primary costs expensed. In the last three years, at a consolidated level, the company had no debts in its books. The company foresees no major advertisement spends lined up in the near future and its cash flows have also been improving.

Limited competition
The company has no direct listed peer in India. It, however, faces competition from unlisted entities such as and Alibaba India, besides indirect peers like Just Dial Ltd., Google and other search engines, which allow buyers to locate suppliers, also pose as a risk for IIL. Besides, traditional trading channels such as trade show organisers, trade magazine publishers, yellow pages, classified advertisements and outdoor advertising are other competitors.

Provides effective tools for communication
The company allows buyers to easily connect with its database of suppliers by posting RFQs, which gives buyers access to many suppliers that they would not have reached through traditional methods. IIL aims to maximize the visibility of buyer RFQs through its automated systems that match buyers’ customized quotes with potential suppliers and a search feature that allows interested suppliers to locate and seek further details about quotations.

COVID-19 Impact
The company will have near term impact in its business operations specifically on its paying subscriber base, but we expect its strong balance sheet and a resilient business model will aid them in navigating through this business disruption and get back to growth soon.


Indiamart Intermesh Ltd


Price: INDIAMART has gained 21.64% over last one month after finding bottom at Rs.1641.05 made on March 2020, which also ended medium term down trend in the stock from the life time high of Rs.2862.50 made on February 2020 indicating its long term secular uptrend has resumed after its cyclical correction. The stock has been significantly outperforming NIFTY over last month. We expect the stock to continue its outperformance in the coming weeks. The stock has high of Rs.2862.50 made on February 2020 and move low till Rs.1641.05 made on March 2020. Drawing Fibonacci Retracement between this level the stock is trading in range of 50% and its 61.80% retracement, which has a value of Rs.2251.75 and Rs.2399.30. The stock has bounced from the support level with increased in volume which indicates the strength in the counter.

Indicator: The stock is trading above important moving average 21SMA, 50SMA & 200SMA on daily charts as well as weekly chart. Bollinger Band (20, 2, S) set up on daily chart has started to expand and currently the stock is trading above the upper band of Bollinger Band indicating the volatility expansion on the higher side. RSI (14) on daily chart is pegged at sub 76.61 levels, indicating the stock has not yet been over bought. The Parabolic SAR is trading below its price action on daily charts reflect up trend in the stock will remain intact in near term. The MACD is trading above the signal in buy territory on weekly chart, indicating positive momentum in the stock in the near term.

Volume: Price and volume analysis plays an important part in determining overall strength or weakness in the stock. Price and volume pattern are moving in the same direction which reflects the true movements in the stock. INDIAMART stock has seen the profit booking with thin volume, which still shows the movement of this stock, is still on bull side.

Conclusion: Considering all the above data facts, we recommend buying for short to medium term. The stock has seen decent deliverable quantity to trade quantity on daily basis, which indicates strong hands are accumulating the stock at currents levels, which enhance the confidence over the stock. The stock is trading with bullish bias and all set to make new 52 week high in coming days. Traders may go long on the stock around Rs.2750 levels keeping a stop loss below Rs.2420 for target of Rs.3435 level.