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HDFC Securities Institutional Equities
Indiamart Intermesh Ltd.’s stock remains under pressure due to persistent churn in its lower-tier customer base, prompting HDFC Securities to trim its target price by ~6% to Rs 2,400 from Rs 2,550, even as it maintained a ‘Buy’ rating on the stock.
The brokerage highlighted that elevated churn in the silver-tier segment continues to drag subscriber additions and overall growth momentum. Net additions have remained muted over the past several quarters, significantly below historical averages, impacting collections and revenue visibility.
Despite multiple initiatives—such as improving lead quality, reducing supplier competition per lead, and redirecting enquiries to paid customers—the company has not yet achieved meaningful success in curbing churn, according to the report.
Adding to the concern is the stagnation in the unique business enquiries generated (UBEs) on the platform, which dropped from ~31 million in Q2 FY26 to ~27 million in Q4 FY26 (8qtr CQGR of 1.5%). This results in decrease in the quantity of relevant leads available for the silver tier members as most relevant leads are converted by gold and platinum tier customers.
The recent price hike implemented led to a further pressure in net additions in the last two quarters (~2K drop).
However the brokerage noted that growth is led by average revenue per user expansion, which is a function of-
- platinum-tier buying more pan-India packages,
- category-based pricing,
- gradual up-tier migration of gold and silver cohorts, and
- price hikes.
The brokerage expects revenue growth to moderate to low double digits.
Valuations:
The brokerage has reduced its estimates by ~1–2%, however HDFC Securities remains constructive on the stock and maintain a Buy rating on IndiaMART, supported by its strong platform quality and sticky gold and platinum customer base.
The brokerage continues to expect low double-digit growth, with potential acceleration once the current churn issues are resolved.
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