Indiamart Intermesh Limited

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.

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 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.

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.

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.

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.

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^⏳.