IndiaMART Q1 Snapshot: Rs 153.5 cr profit, 29 mn enquiries, 1,500 new paying suppliers

Time of India

22-07-2025

IndiaMART
InterMesh Ltd
, the parent of India's leading B2B marketplace, reported a consolidated net profit of Rs 153.5 crore for Q1 FY26, up 34 per cent YoY but down 14 per cent sequentially due to higher taxes and expenses. Revenue from operations rose 12 per cent YoY to Rs 372.1 crore, driven by improved collections and deferred revenues.
The company saw 29 million unique business enquiries, marking a 17 per cent YoY increase. Supplier storefronts grew 6 per cent YoY to 8.4 million, while paying suppliers stood at 2.18 lakh, a net addition of 1,500 during the quarter.
Total expenses climbed to Rs 246.5 crore, reflecting investments in marketing, tech, and customer engagement.
"The company remains focused on enhancing user experience, platform efficiency, and service offerings for SMEs,"
Dinesh Agarwal
, CEO, IndiaMART, said.
"The company continues to play a pivotal role in digitally empowering Indian businesses across categories and geographies," he further added.
He further discussed the financial results and other plans of the company with ETRetail. Here are the edited excerpts:
Q1 reported a 35 per cent YoY jump in profit, but there was a sequential decline due to taxes and higher spending. How should one read this?
It's a timing issue. In Q1, we only needed to deposit 15 per cent of advance tax, while Q2 requires 45 per cent. So, the sequential dip is largely due to tax outflows and some arbitrage in other income. Operationally, EBITDA margins have stayed stable at 38–39 per cent.
Could you walk us through the consolidated growth in terms of revenue from operations? What are the additional factors you believe will drive growth in the upcoming quarters?
Our revenue growth is fundamentally linked to deferred revenue, which in turn stems from collections. In Q2 and Q3, our collections grew by 6 per cent and 10 per cent, respectively. These gains gradually translate into deferred revenue, and eventually into topline growth. Essentially, our revenue growth reflects a 20-year moving average of our collection growth. If we break it down, around 9 per cent of growth came from the standalone average revenue per customer, about 1 per cent from the addition of new customers, and another 2–3 per cent from
Busy
, our accounting software subsidiary, which sees stronger traction in Q1, contributing to this quarter's uptick.
Looking ahead, we'll focus on driving growth through three levers—higher ARPU, improved collections from existing customers, and deeper performance from Busy. Each of these is a critical contributor to our topline momentum.
The recent dividend payout was significant. What's the broader message to shareholders?
We continue to follow a disciplined capital allocation strategy. We generate over Rs 600 crore annually through operations and a few hundred crores more via treasury income. This is either reinvested into growth and acquisitions or returned to shareholders. Over the last 4–5 years, we've returned about 50 per cent of the cash generated.
This year, we paid out Rs 300 crore in dividends i.e. Rs 50 per share, or 500 per cent. Shareholders appreciate that we're consistently improving cash flow, ROCE, and RoNW. With Rs 2,800 crore in cash reserves, no debt, and a negative working capital cycle, we're in a strong financial position, ensuring profitable growth.
Around 1,500 new suppliers were onboarded in Q1. Where is most of this traction coming from?
The majority of the new supplier additions are coming from the top 30–40 cities, excluding the eight major metros. That's where we're seeing the strongest momentum.
How are you looking to strengthen supplier engagement going forward?
We have a dedicated winback team that consistently works to re-engage past suppliers. That's an ongoing effort, and there's been no change to that process. What we're putting more focus on now is improving customer retention and increasing repeat usage, both of which are long-term efforts that we continue to prioritise.
What initiatives are you taking to strengthen partnerships with your customers?
This quarter, we saw a 15–16 per cent increase in unique business inquiries, compared to the usual 10–12 per cent. We invested Rs 6 crore in performance marketing and advertising across various media platforms, which helped boost demand by an additional 5–6 per cent.
On the product side, we've improved inquiry quality through a category-led approach and collecting specific details like quantities, specifications, and units, which improves matchmaking relevancy.
We've also limited the number of suppliers shown to a single buyer, improving the buyer's experience and reducing competition among sellers. Buyer repeat rate has climbed to 58 per cent, the highest in years, and supplier
NPS
is also at an all-time high. These enhancements directly support retention and reduce churn.
Currently, churn among
Platinum
users is just 1 per cent, while it stands at 4–5 per cent for annual Silver subscribers, and 6–7 per cent for monthly Silver plans. If we can bring down Silver churn by even 2 per cent, it would lead to meaningful improvements in both revenue and long-term retention.
What were the key investments or acquisitions this quarter, and what outcomes do you expect from them?
Our biggest investment this quarter went into improving lead volume and quality through advertising and performance marketing. We spent Rs 6 crore last quarter, and our typical quarterly budget is Rs 10 crore. If performance continues to improve, we may raise that to Rs 9 crore this quarter.
On the acquisition side, we increased our stake in Fleetx - a transport and fleet management platform catering to large and mid-sized enterprises. Fleetx raised Rs 100 crore from existing VCs, and we increased our stake from 17–18 per cent to 22 per cent. We've also raised our holding in
Mobi Technologies
to 31 per cent. These are follow-on investments in companies we've supported over the past 2–3 years.
Are there any new product categories or segments you're planning to enter?
We've already invested about Rs 700 crore into the accounting tech segment through two strategic acquisitions. It's still early days, but we expect results over the coming year. Beyond that, we remain open to evaluating new opportunities as they emerge.