Skip to content

    Indiamart Intermesh Q2 FY26 earnings call

    INDIAMARTNeutral
    Consumer Services·17 Oct 2025
    Management Summary

    IndiaMART delivered a steady second quarter characterized by double-digit growth in revenue and collections, supported by strong performance in the platinum and gold customer segments. While the company faced a significant decline in other income due to mark-to-market treasury losses, core operational metrics like EBITDA margins remained robust at 33%. Management is proactively pivoting its strategy to address high churn in the silver segment and is increasingly leveraging AI for call automation and inquiry quality improvement.

    Highlights

    8

    • Consolidated revenue from operations reached ₹391 crores, a 12% YoY increase.

    • Collections from customers grew to ₹406 crores, representing 14% YoY growth.

    • Deferred revenue stood at ₹1,750 crores, up 18% YoY.

    • Consolidated EBITDA was ₹130 crores with a healthy margin of 33%.

    • Total paying suppliers reached 222,000, with normalized net additions of 2,800 in the quarter.

    • Unique business inquiries grew 12% YoY to 31 million.

    • Cash and treasury balance remained strong at ₹2,874 crores as of September 30, 2025.

    • Busy Infotech reported a 57% normalized YoY growth in billing, reaching ₹38 crores.

    Concerns

    1

    • Elevated Churn in Silver Segment

    What Changed1

    vs Q3 FY26

    Tone shiftGood → Neutral

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹391 Cr+12%YoY
    2. 02Collections₹406 Cr+14.0%YoY
    3. 03EBITDA Margin33%
    4. 04Net Profit₹83 Cr
    5. 05Deferred Revenue₹1,750 Cr+18%YoY

    Segment breakdown

    IndiaMART Standalone
    ₹365 Cr Collections8% Growth
    Busy Infotech
    ₹38 Cr Billing₹29 Cr Revenue₹111 Cr Deferred Revenue12,000 count New Licenses Sold
    List

    Guidance & targets

    4
    CategoryTargetPriority
    Other
    AI Voice Bot Capacity
    1 lakh calls per day
    		High
    Other
    Marketing Spend
    ₹8-10 crores
    		High
    Revenue
    Sustainable ARPU Growth
    6-8%
    		Medium
    Margin
    Selling and Marketing Cost as % of Revenue
    17-18%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Elevated Churn in Silver Segment

    Monthly silver churn is at 7% and annual silver at 4%, which management admits they cannot yet provide guidance on improving. — Both acknowledged

    high

    Treasury Portfolio Volatility

    Mark-to-market losses occurred due to significant increases in bond yields, reducing other income from ₹92cr to ₹10cr. — Management acknowledged

    medium

    AI Bot Scraping and Data Poaching

    Analyst concerned about bots diluting the platform's moat; management argues that deep insights into supplier preferences are not scrapable. — Analyst downplayed

    medium

    Areas of Evasion(2)

    • Specific guidance on net supplier additions
    • Detailed breakdown of organic vs. paid traffic growth beyond a 50/50 estimate

    Q&A highlights

    3

    “I'm going to drop this KPI altogether, because this KPI has become very unreliable in the days of web crawling, scraping, agentic and all of this.”

    Management is acknowledging that traditional web traffic metrics are being distorted by AI bots, necessitating a shift to higher-intent metrics like inquiries.

    asked by Kunal Thanvi

    2 min read5 chapters

    Detailed Narrative

    01

    AI Automation Pivot

    Management is aggressively deploying AI to handle customer interactions and improve catalog quality. AI-based voice bots are currently handling 10,000 to 20,000 calls per day, with a target to reach 100,000 calls per day by January 1, 2026. This initiative aims to solve the 'black box' of 3 crore monthly calls between buyers and suppliers through automated analytics and sentiment analysis.

    02

    The Churn Challenge in Silver Segment

    The silver segment continues to be a point of stress with monthly churn remaining elevated at 7%. Despite various interventions like reducing competition per buyer and improving inquiry quality (80-90% of RFQs now have specifications), these efforts have not yet translated into significant churn reduction. Management remains cautious, refusing to provide forward guidance on net supplier additions until they have a better grip on this segment.

    03

    Strategic Shift in KPIs

    IndiaMART is officially dropping 'Traffic' as a Key Performance Indicator. CEO Dinesh Agarwal explained that AI crawlers from companies like Meta, OpenAI, and Perplexity have made it nearly impossible to differentiate between human users and machine traffic. The company will now focus on 'Unique Business Inquiries' (31 million in Q2) as a more reliable lead indicator of growth.

    04

    Busy Infotech Momentum

    The Busy Infotech subsidiary showed strong momentum with billing of ₹38 crores in Q2, representing a normalized YoY growth of 57%. The segment sold 12,000 new licenses during the quarter, bringing the total to 421,000. Management expects this momentum to continue, though they noted that Q4 and Q1 are typically stronger for accounting software due to the financial year-end.

    05

    ARPU Expansion Strategy

    ARPU for the top 1% of customers has nearly doubled from ₹6 lakhs in FY21 to approximately ₹11 lakhs. This growth is primarily driven by price hikes and customers opting for multi-city and multi-keyword targeting. Management believes a sustainable ARPU growth rate of 6-8% is achievable over the long term⏳ as they better serve medium and large enterprises.

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