Target: ₹2,450

CMP: ₹2,295.10

We upgrade IndiaMart InterMesh (InMart) to Buy from Sell earlier following a 28 per cent correction since our last published note. As expected, the stock has seen significant de-rating due to sharp deceleration in collections growth in 2QFY25 and muted paying supplier additions over the past 6 quarters.

While we do not see material improvement in these key metrics in Q3, from a medium-term perspective we see collections in the standalone business growing around low teens vs. 5 per cent y-o-y in Q2, supported by mid-single growth in both paying suppliers as well as realisation.

Consol. EBITDA margin could also remain elevated (34-36 per cent) in the absence of meaningful growth investments. Post the recent correction, the stock is trading at 28x NTM PER (ex-cash and other income), about 50 per cent discount to own 5-year average of 56x.

For a stock, with FCFF yield (including other income) of above 6 per cent on FY26 estimates, this should cap downside in our opinion. We raise margin forecasts and roll forward for a revised Mar’26 TP of ₹2,450.

Key risks: Opening up of the GEM (government e-marketplace) platform to all buyers and sellers across the country; further slowdown in SME space; technology disruption from competition such as JustDial and Udaan, among others.