Indiamart Intermesh Limited — Q3 FY26 earnings call

Call held 20 Jan 2026

Management summary

IndiaMART delivered a solid Q3 FY26 with 13% YoY revenue growth and 17% YoY collections growth, driven by strong deferred revenue. However, paying supplier numbers saw a slight decline, and unique business inquiry growth moderated. The company continues to invest in AI-enabled technologies and is navigating the impact of recent price hikes in its silver subscription tier.

Highlights

  • Consolidated revenue from operations grew 13% YoY to Rs. 402 crores.

  • Collections from customers grew 17% YoY to Rs. 426 crores.

  • Deferred revenue grew 19% YoY to Rs. 1,775 crores.

  • Consolidated EBITDA margin was 33% at Rs. 134 crores.

  • Busy Infotech's revenue from operations grew 50% YoY (normalised) to Rs. 32 crores.

Concerns

  • Total number of paying suppliers declined by 1 thousand to 221 thousand.

  • Unique business inquiries growth slowed to 4% YoY from 17%, 12% in previous quarters.

  • One-time impact of Rs. 8.5 crores on P&L due to new labor code.

Key financials

  1. Revenue from Operations ₹402 Cr +13%YoY
  2. Collections from Customers ₹426 Cr +17%YoY
  3. Deferred Revenue ₹1,775 Cr +19%YoY
  4. EBITDA ₹134 Cr
  5. EBITDA Margin 33%
  6. Net Profit ₹188 Cr
  7. Paying Suppliers 2,21,000 units
  8. Unique Business Inquiries 28 Mn +4%YoY

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
    ₹33 Cr Billing₹32 Cr Revenue from Operations₹112 Cr Deferred Revenue₹6 Cr Cash Flow from Operations4,31,000 units Total Licenses Sold

Capital allocation

high confidence
  • Liquidity Cash ₹3,051 Cr
    Our Treasury balance stood at Rs. 3,051 crores as of December 31, 2025.

Guidance & targets

ARPU

  • ARPU Growth (overall) ARPU · long-term · High confidence 6-8%
    I have always guided to 6-8% on the ARPU and top 10% ARPU at 9-11%, and that is how it is going.

    — Dinesh Chandra Agarwal

  • ARPU Growth (top 10% customers) ARPU · long-term · High confidence 9-11%

    — Dinesh Chandra Agarwal

Collections

  • Collection Growth Collections · JFM quarter · Medium confidence similar to 14%
    I think we are cautious. We are targeting even JFM quarter to be similar, but let's see.

    — Dinesh Chandra Agarwal

Customer Addition

  • Gross Additions Customer Addition · around April, May, June · Medium confidence natural numbers
    So I think gross additions should be coming to natural numbers sometime around April, May, June. So one more quarter of maybe plus/minus 0 customer addition you can expect.

    — Dinesh Chandra Agarwal

  • Customer Addition (short-term) Customer Addition · next quarter · Medium confidence plus/minus 0
    So one more quarter of maybe plus/minus 0 customer addition you can expect.

    — Dinesh Chandra Agarwal

Pricing

  • Full Impact of Price Hikes Pricing · 6-9 months later · Medium confidence known
    So will it be fair to say that the full impact of the price hikes, right or wrong, we will get to know maybe six to nine months later, that is when we will be in actual position to understand whether it worked or? Yes.

    — Dinesh Chandra Agarwal

Upsell

  • Upsell Trend Upsell · current · High confidence 8-9%

    From 15-20% today

    So from 17-18% upsell, which used to trend anywhere between 15-20%, that is now trending at 5-10%, depending upon the different industries and different buckets.

    — Dinesh Chandra Agarwal

Overall Growth

  • Overall Growth Rate Overall Growth · Low confidence 20%+
    If you want to target a 20% plus growth rate ideally speaking, the company should target 10% coming from customer addition and 10% coming from ARPU addition.

    — Dinesh Chandra Agarwal

What to watch in Q4 FY26

Churn levels for paying suppliers

April, May, June
Current Not much change, annual display expected later
Target Annual display of churn levels

Why it matters

To assess the effectiveness of product changes and price hikes on supplier retention.

So I'm expecting that any annual display of the churn would be available sometime around April, May, June, not before that.

Risks & concerns

  • Decline in paying suppliers

    medium

    Total paying suppliers declined by 1 thousand due to price increases in the silver tier and fewer working days.

    Management acknowledged

  • Moderation in unique business inquiries growth

    medium

    Unique business inquiries grew only 4% YoY, attributed to seasonal factors and reduced advertising during holidays.

    Management acknowledged

  • Churn from silver category price hikes

    medium

    Price increase in the silver tier may lead to churn among 'fence-sitters', with the full impact to be seen in 6-9 months.

    Management acknowledged

  • Buyer traffic shift to AI search

    medium

    Potential shift of buyer traffic from Google search to AI search, though management believes it expands TAM and focuses on repeat traffic.

    Analyst downplayed

  • Impact of new labor code

    low

    A one-time impact of Rs. 8.5 crores was taken in the P&L due to the new labor code.

    Management acknowledged

  • Bot traffic affecting data reporting

    low

    The proliferation of various bot types (ChatGPT, LLM bots) makes it difficult to distinguish human traffic, leading to the cessation of total traffic data reporting.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Paid supplier numbers and business model strategy Direct
Do we feel market is saturated? No. Market has kind of unlimited demand for enough number of quality leads that can be converted by sellers. So there is a number of sellers willing to pay if they get leads, which can be converted by them. Second, to attract more buyers, do we want to prefer moving to a fulfilment model? No. We would like to remain a software and tech-oriented company, with enablement embedded wherever it can...

Analyst questioned the subdued paid supplier numbers and potential market saturation, asking if a shift to a transaction-based model was considered. Management clarified their strategy to remain a tech-oriented company and focus on improving buyer inquiries.

Asked by Anmol Garg

Reduction in advertisement/SG&A spend Partial
That is because there was Diwali, Dussehra and we didn't want to run the ads on the holidays, there's no point running ads on the holidays, 25th was a holiday. So that's about it. And secondly, as we are running the ads, we are getting confident how to optimise for the cost.

Analyst inquired about the reduction in ad spend and the timeline for reaching a higher quarterly spend. Management attributed the reduction to seasonal holidays and cost optimization, not providing a clear timeline for increased spending.

Asked by Anmol Garg

Slowdown in unique inquiries growth Direct
Generally, speaking holidays here and there, sometimes just having one additional working day or two additional working days also happen. And from Q2 to Q3, it is always lower, if you see historically also. But even if you compare Q3 to Q3, you are right that it was growing at 14%, 15%, but now it has come down to 7%.

Analyst highlighted the significant drop in unique inquiries growth. Management explained it as a seasonal factor, compounded by reduced advertising during holiday periods.

Asked by Prashant Kothari

Cessation of total traffic data reporting Direct
I guess I mentioned it last time also because currently, the bot traffic is coming from everywhere. Whether it is ChatGPT bot. And there are hundreds of LLM bots now, search engine bots, new browser bots, agentic bots. So in the traffic, when trying to identify the actual human traffic versus bot traffic...

Analyst noted the absence of total traffic data. Management clarified that the proliferation of various bot types makes it difficult to accurately distinguish human traffic, leading them to stop reporting this metric.

Asked by Prashant Kothari

Acceleration of new paid supplier additions Evasive
I am not able to comment on that. I think I will continue to focus on providing better quality and better quantity. As soon as it starts to trend 2-3 quarters in one single direction, then you will see.

Analyst pressed for a timeline on accelerating new paid supplier additions. Management remained non-committal, stating they would wait for consistent positive trends in quality and churn before making dramatic investments.

Asked by Prashant Kothari

Impact of new labor code Direct
Yes. So we have impact of new labour code. We have taken an impact of about Rs. 8.5 crores in P&L. And after that, the net profit and EBITDA number which has come, is there. ... That is right. This is a one-time impact.

Analyst sought clarification on the impact of the new labor code. Management confirmed a one-time P&L impact of Rs. 8.5 crores, which is important for understanding exceptional items.

Asked by Anmol Garg

Buyer traffic shift from Google Search to AI Search Direct
One, every time a newer technology and more pervasive and more useful technology comes, it overall improves the TAM, it means if earlier, X number of people were only using Google, now the total number of people that will use either Google or Gemini or ChatGPT would be higher than X. So it actually expands the TAM anyway.

Analyst raised a strategic concern about the potential threat of AI search to IndiaMART's traffic. Management viewed this as an expansion of the total addressable market and emphasized their focus on repeat traffic.

Asked by Devang Patel

Silver category price hike and its impact on churn Direct
I mean we, as a company, have taken this decision after enough discussion and enough pros and cons. So we obviously think that it was the right time after many, many years. ... So I think, yes, you are right, some fence sitters might actually churn out because of that.

Analyst questioned the timing and potential negative impact of the steep price hike on churn. Management acknowledged the risk of some churn but defended the decision as well-debated and necessary, noting that renewals would only see new prices later.

Asked by Swapnil Potdukhe

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

IndiaMART reported a consolidated revenue from operations of Rs. 402 crores in Q3 FY26, marking a 13% year-on-year growth. Collections from customers also saw robust growth, increasing by 17% year-on-year to Rs. 426 crores. The company's deferred revenue grew 19% year-on-year to Rs. 1,775 crores. Consolidated EBITDA for the quarter stood at Rs. 134 crores, representing a 33% margin, while net profit reached Rs. 188 crores.

Busy Infotech's Contribution

Busy, IndiaMART's accounting software subsidiary, recorded a billing of Rs. 33 crores in Q3 FY26. Its normalized year-on-year growth rate, after adjusting for payout structure changes, was 28%. Revenue from operations for Busy was Rs. 32 crores, showing a 50% normalized growth, and deferred revenue was Rs. 112 crores, growing 56% normalized. Busy sold approximately 10 thousand new licenses during the quarter, bringing its total licenses sold to 431 thousand.

Supplier Base and Business Inquiries Dynamics

The total number of paying suppliers experienced a slight decline of 1 thousand, settling at 221 thousand. This decrease was primarily attributed to a moderation in gross additions following a price increase in the silver subscription tier and fewer working days due to the festival season. Unique business inquiries reached 28 million, growing 4% year-on-year, which indicates a slowdown compared to previous quarters' growth rates of 17% and 12%.

AI Adoption and Platform Enhancement Strategy

IndiaMART continues its journey as an early adopter of new technologies, rapidly integrating AI-enabled solutions to enhance product quality, user experience, and trust. The company believes that the emergence of new technologies like AI expands the total addressable market (TAM). Management is actively focusing on improving repeat traffic, which currently stands at an all-time high of 58-59%, as a key strategy to navigate evolving search behaviors.

Pricing Adjustments and Churn Management

A significant price increase was implemented in the silver subscription tier, raising the monthly rate from Rs. 3,000 to Rs. 4,000 and the annual rate from Rs. 28,500 to Rs. 32,000 (after discount). Management acknowledged that this steep hike might lead to some churn among 'fence-sitters.' The full impact of these price changes on renewals and overall churn is expected to become clear in the next six to nine months.

ARPU Growth and Monetization Focus

The company's ARPU growth is currently aligning with its long-term trend of 6-8%, with top 10% customer ARPU growing at 9-11%. IndiaMART aims for an overall growth rate exceeding 20%, targeting a balanced contribution of 10% from customer additions and 10% from ARPU expansion. This strategy emphasizes balancing both top-line growth and profitability, leveraging higher-tier customers (Platinum and Gold) who contribute over 75% of revenue and maintain good upsell and retention rates.

Strategic Investment in Baldor Technologies and New Labor Code Impact

Consolidated Other Income for the quarter included a one-time fair valuation gain of approximately Rs. 82 crores, resulting from the revaluation of the strategic investment in Baldor Technologies. Additionally, the company incurred a one-time impact of Rs. 8.5 crores on its P&L due to the implementation of a new labor code, which was mandated by ICAI.

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