Indiamart Intermesh Limited — Q1 FY27 earnings call

Call held 21 Jul 2026

Management summary

Indiamart Intermesh Limited reported a mixed Q1 FY27, with consolidated revenue growing 11% YoY to Rs. 414 crores and deferred revenue up 16% to Rs. 2,014 crores. EBITDA margin remained strong at 35% due to operational efficiencies. However, the paying supplier base declined by 1,850, and unique business enquiries stagnated, primarily due to churn in the Silver tier and a shift in buyer acquisition strategy. The company announced a new finance subsidiary to address MSME credit needs and discussed ongoing efforts in trust, safety, and AI integration.

Highlights

  • Consolidated Revenue from operations grew 11% YoY to Rs. 414 crores.

  • Consolidated Deferred revenue grew 16% YoY to Rs. 2,014 crores.

  • Consolidated EBITDA was Rs. 146 crores, representing a margin of 35%, elevated due to savings arising from lower customer acquisition and operating leverage.

  • Consolidated Net profit for the year was Rs. 172 crores.

  • New subsidiary, IndiaMART Finance Limited, approved to serve MSMEs for their short-term credit requirement.

Concerns

  • Total paying supplier base saw a net decline of 1,850 suppliers during the quarter, primarily due to moderation in gross addition and elevated churn at the Silver subscription tier.

  • Unique business enquiries were 26 million, with active buyers down by 5%, and overall buyer numbers stagnating.

  • BUSY Infotech's billing growth was 10% YoY (Rs. 59 crores), which was slightly lower than its trend growth rates due to a high base effect from a prior-year winback initiative.

Key financials

  1. Consolidated Revenue from Operations ₹414 Cr +11%YoY
  2. Consolidated Collections from Customers ₹463 Cr +8%YoY
  3. Consolidated Deferred Revenue ₹2,014 Cr +16%YoY
  4. Consolidated EBITDA ₹146 Cr
  5. Consolidated EBITDA Margin 35%
  6. Consolidated Net Profit ₹172 Cr
  7. Consolidated Cash from Operations ₹163 Cr
  8. Consolidated Cash & Treasury Balance ₹3,553 Cr
  9. Total Paying Supplier Base 2,18,000
  10. Net Decline in Paying Suppliers 1,850
  11. Unique Business Enquiries 26 Mn

What they filed

Q1 FY27: revenue up 8.7%, net profit up 6.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue332 337 336 346 360 +8%368 +9%368 +10%376 +9%
EBITDA120 144 133 135 115 −4%136 −6%135 +2%149 +10%
Net profit127 125 231 166 84 −34%206 +65%70 −70%176 +6%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • BUSY Infotech
    ₹59 Cr Billing₹36 Cr Revenue from Operations₹146 Cr Deferred Revenues₹16 Cr Cash from Operations12,000 New Licenses Sold (Q1)4,54,000 Total Licenses Sold

Capital allocation

high confidence
  • M&A IndiaMART Finance Limited Joint venture · Announced

    To facilitate transaction financing for MSMEs and improve marketplace effectiveness by partnering with lenders for short-term credit requirements.

    Will work with partnership lenders; no plans to lend large amounts from own balance sheet.

    Board of Directors has approved the creation of new subsidiary, IndiaMART Finance Limited. This entity will serve MSMEs for their short-term credit requirement.
  • Liquidity Cash ₹3,553 Cr Consolidated Cash and treasury balance overall stood at Rs. 3,553 crores as on June 30, 2026.
    Consolidated Cash and treasury balance overall stood at Rs. 3,553 crores as on June 30, 2026.

Guidance & targets

BUSY Growth

  • BUSY CAGR Growth Rate BUSY Growth · year-on-year · Medium confidence 35-40%
    We would want this business to become at least a 35-40% CAGR business year-on-year.

    — Brijesh Kumar Agrawal

  • BUSY CAGR Growth Rate BUSY Growth · next couple of years · High confidence 27-30%
    But over the next couple of years, I think we can definitely expect us to be closer to anything between, let's say 27-30% CAGR growth rate, that we've seen over the last four years.

    — Brijesh Kumar Agrawal

BUSY Licenses

  • License Growth Rate BUSY Licenses · immediate year or two · Medium confidence 15-20%
    Ideally, we would want to see a higher growth rate of about 15-20% in the licenses in the immediate year or two.

    — Brijesh Kumar Agrawal

Verification

  • Bank Account Verification Coverage Verification · two years' timeframe · Medium confidence 80%
    And in the two years' timeframe, we will cross 80% verification on that [bank account].

    — Dinesh Chandra Agarwal

  • Bank Account Verification Coverage Verification · next year or so · Medium confidence 50%+
    And I am sure in the next year or so, we will cross 50% plus on the bank account.

    — Dinesh Chandra Agarwal

Churn

  • Net Growth after Churn Resolution Churn · 2-3 quarters · Medium confidence positive growth
    That will happen only for 2-3 quarters. I mean, if I go and acquire larger, and you might have seen that happening with many other subscription players.

    — Dinesh Chandra Agarwal

What to watch in Q2 FY27

Paying Supplier Base Growth

Next quarter
Current Net decline of 1,850 suppliers in Q1 FY27, total 218,000.
Target Net positive growth in paying suppliers.

Why it matters

Direct indicator of core business health and effectiveness of retention/acquisition strategies.

Our total paying supplier base was 2 lakh18 thousand at the end of the quarter 1, reflecting net decline of 1,850 suppliers during the quarter. This decrease can primarily be attributed to moderation in the gross addition as well as elevated churn at the Silver subscription tier.

Risks & concerns

  • Paying Supplier Base Decline

    medium

    Net decline of 1,850 suppliers in Q1 FY27, attributed to moderation in gross addition and elevated churn at the Silver subscription tier.

    Management acknowledged

  • Stagnating Buyer Numbers and Enquiries

    medium

    Unique business enquiries at 26 million, active buyers down 5%, with overall buyer numbers stagnating, prompting a shift to higher ARPU buyers and new advertising channels.

    Management acknowledged

  • Impact of Large Language Models (LLMs) on Traffic

    medium

    Uncertainty regarding how LLMs will affect search traffic and direct links to the platform, with management expecting a 'hybrid' model to emerge.

    Analyst acknowledged

Q&A highlights

6 direct
Objective of IndiaMART Finance Limited Direct
Our objective is to facilitate transaction financing in order to help improve the marketplace effectiveness... We do not have any plans to lend out of our own balance sheet any large amount. So it is mainly to do the partnerships and short-term financing.

Clarifies the strategic intent and asset-light model for the new finance subsidiary, addressing concerns about balance sheet risk.

Asked by Kunal Thanvi

Buyer Monetization and Declining Buyer Numbers Partial
We have been thinking about launching a paid buyer program... In terms of buyer enquiry, I think they are typically flattish and plus minus 1% here and there. By and large, they're typically been flattish at unique business enquiries of 26-27 million.

Addresses concerns about stagnating buyer numbers and outlines strategic shifts towards monetizing buyers and focusing on higher ARPU segments, while acknowledging the current flat trend.

Asked by Kunal Thanvi

BUSY Collections Growth Rate Direct
On BUSY, so if you were to look at the Q1 of last year, we actually had about Rs. 10 crores coming in because of one-time winbacks that we had introduced in that particular quarter... if we were to remove that one-time Rs. 10 crores growth advantage that we got in that quarter, we would still be growing on a normalised basis at about 30 odd percent.

Provides crucial context for the seemingly lower 10% growth in BUSY's Q1 billing, explaining it as a base effect and indicating a stronger underlying growth rate.

Asked by Abhishek Banerjee

Progress on Buyer Quality and Trust Initiatives Direct
Now we are slowly moving to 100% OTP verification for the buyers also... we are now deploying from phone number and GST to further identity verification of the buyer... we have launched know your seller or seller verification page... we are also verifying their bank accounts now... we are also offering now for all the TrustSEAL buyers... payment assurance of up to Rs. 5 lakh.

Details concrete, multi-faceted initiatives being implemented to enhance platform trust, verify buyers and sellers, and improve overall transaction security.

Asked by Pratik Kothari

Strategy for Net Growth (Gross Additions vs. Churn) Direct
That will happen only for 2-3 quarters... Once we get the product-market fit right, we will know internally that, okay, the customers are renewing. Because if the customers are not renewing, acquiring same customer with double the intensity will make the CAC go higher and the LTV go lower.

Clarifies management's commitment to solving churn before aggressively pursuing gross additions, emphasizing a sustainable growth model focused on customer retention and LTV.

Asked by Pratik Kothari

Impact of Large Language Models (LLMs) on Search Traffic Partial
LLMs would try to answer as much of the things at their own rather than transferring the control back... if I stop completely my content from the LLM, then I risk the complete omission from that LLM... I can't comment on that, what would be the final destination of this particular debate. My hope is that over the time, there's a hybrid of a Google or a Gemini that will emerge over a period of time.

Highlights the significant uncertainty and strategic dilemma posed by LLMs for platforms reliant on search traffic, indicating a lack of a clear solution at present.

Asked by Vivekanand

Windfall Gains from AI Implementation Direct
We used to get or do almost 80 thousand calls a day through our manual call centre used to handle. And we quickly upgraded that to the AI voice call centre... Another thing is in the content aggregation and audit. I think content aggregation and audit, I mean, AI can do 10x better job and 10x faster than whatever human BPO or any parser or anything could have done.

Provides specific, quantifiable examples of how AI is already delivering significant operational efficiencies and value, particularly in call handling and content management.

Asked by Shivam Gupta

Future Investment Strategy Direct
We want to invest in companies where we have conviction and where we feel that either we can help them or they can help IndiaMART. It is not only the mere capital allocation basic strategy. So as and when we find something very, very good, we will do. But as of now, we don't want to become too many strategic investments there.

Clarifies the strategic rationale and selective approach to future investments, indicating a focus on synergistic opportunities rather than broad venture investing.

Asked by Aman Thadani

3 min read 7 chapters

Detailed narrative

Q1 FY27 Financial Performance Overview

Indiamart Intermesh Limited reported a consolidated Revenue from operations of Rs. 414 crores for Q1 FY27, marking an 11% year-on-year growth. Collections from customers also grew by 8% YoY to Rs. 463 crores, while consolidated deferred revenue increased by 16% YoY to Rs. 2,014 crores. The company achieved a consolidated EBITDA of Rs. 146 crores, translating to a 35% margin, primarily due to savings from lower customer acquisition costs and operating leverage. Consolidated Net profit stood at Rs. 172 crores, and cash generated from operations was Rs. 163 crores.

Paying Supplier Base and Buyer Engagement Challenges

The total paying supplier base at the end of Q1 FY27 was 218,000, reflecting a net decline of 1,850 suppliers during the quarter. This decrease is attributed to moderation in gross additions and elevated churn within the Silver subscription tier. Unique business enquiries remained 'flattish' at 26 million, with active buyers down by 5%. Management indicated a strategic shift towards acquiring higher ARPU buyers and experimenting with new advertising channels beyond Google to address the stagnation in buyer numbers.

BUSY Infotech Performance and Outlook

BUSY Infotech recorded a billing of Rs. 59 crores in Q1 FY27, representing a 10% year-on-year growth. Revenue from operations for BUSY was Rs. 36 crores, a significant 47% YoY increase, with deferred revenues growing 44% YoY to Rs. 146 crores. Cash from operations for BUSY was Rs. 16 crores. The lower billing growth was explained by a high base in Q1 FY26 due to a one-time winback initiative. Management aims for BUSY to achieve a 35-40% CAGR business growth year-on-year, with license growth targeted at 15-20% in the immediate future.

Strategic Focus on Trust, Safety, and AI Integration

IndiaMART is embedding trust and safety elements into its marketplace, including strong seller verification via multi-layer KYC and TrustSEAL. A new seller verification feature allows buyers to verify sellers before payments, complemented by a Buyer Payment Protection Program for eligible purchases up to Rs. 5 lakh. The company is accelerating AI evolution, streamlining discovery through standardized cataloguing and intelligent matchmaking. Its AI-driven call handling system now autonomously manages over 1 lakh calls per day, improving buyer experience and operational efficiency.

New Finance Subsidiary for MSME Credit

The Board of Directors approved the creation of a new wholly-owned subsidiary, IndiaMART Finance Limited. This entity's objective is to facilitate transaction financing for MSMEs, thereby improving marketplace effectiveness. The company plans to partner with lenders to create small products and solutions for short-term transaction financing, rather than lending large amounts from its own balance sheet, indicating an asset-light approach.

Addressing Churn and Buyer Quality

Management acknowledged the elevated churn, particularly in the Silver subscription tier and among first-year onboarding customers. Initiatives to curb churn and improve new gross additions include focusing on better quality suppliers and buyers, enhanced curation and cataloguing, and integrating credit facilitation into transactions. The company expects the impact of these churn-reduction strategies to become visible over the next '2-3 quarters' and emphasizes that acquiring customers without good retention is unsustainable.

Impact of Large Language Models (LLMs) on Traffic

The company discussed the potential impact of LLMs on search engine traffic, acknowledging the industry-wide debate. Management noted that LLMs might try to answer queries directly rather than linking to external sites, posing a challenge for traffic acquisition. While there is uncertainty about the final outcome, IndiaMART is monitoring the situation and expects a 'hybrid' model to emerge over time.

This is an AI-generated summary of a publicly available earnings call transcript.
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