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Business News/ Markets / Stock Markets/  Q4 results review: IndiaMART InterMESH zooms 10% despite target price cuts as Q4 PAT jumps 79%
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Q4 results review: IndiaMART InterMESH zooms 10% despite target price cuts as Q4 PAT jumps 79%

IndiaMART InterMESH shares surged 10% on strong Q4 results despite target price cuts. Stock hit day's high of ₹2,913, up 21.6% from 52-week low. Company's net profit rose 79% YoY in Q4FY24 to ₹99.6 crore.

IndiaMART InterMESH shares surged 10% on strong Q4 results despite target price cuts. Stock hit day's high of ₹2,913, up 21.6% from 52-week low. Company's net profit rose 79% YoY in Q4FY24 to ₹99.6 crore. (Pixabay)Premium
IndiaMART InterMESH shares surged 10% on strong Q4 results despite target price cuts. Stock hit day's high of 2,913, up 21.6% from 52-week low. Company's net profit rose 79% YoY in Q4FY24 to 99.6 crore. (Pixabay)

Shares of IndiaMART InterMESH (Indiamart) surged 10 percent in intra-day deals today (May 2) on the back of robust March quarter (Q4FY24) results. The rise comes even after brokerages cut target price for the stock post its Q4 results.

The stock rose as much as 10 percent to its day's high of 2,913. With today's rally, stock has advanced 21.6 percent from its 52-week low of 2,395, hit on January 1, 2024. However, it is still 11.5 percent away from its 52-week high of 3,293.45, hit on September 7, 2023.

The scrip has lost around 6 percent in the last 1 year but has gained 7 percent in 2024 YTD. It has been flat in April (up 0.09 percent) and March (down 0.2 percent). Meanwhile, it rose 5.3 percent in February after a 7.5 percent decline in January this year.

Read here: Adani Ports Q4 net profit jumps 76% YoY to 2,040 cr; 6 dividend declared

The company's consolidated net profit jumped 79 percent year-on-year (YoY) to 99.6 crore in Q4FY24 versus 55.8 crore in the same period last fiscal. Meanwhile, its revenue rose 17 percent YoY to 315 crore in the quarter under review from 269 crore in the year-ago period.

For the entire financial year FY24, the company posted a 17.7 percent YoY jump in its consolidated net profit to 334 crore as against 283.8 crore in FY23. Also, its consolidated revenue for FY24 increased 21.45 percent to 1,196.8 crore from 985.4 crore in FY23.

Read here: REC jumps 9.5% to record high on strong Q4 results, soars 30.5% in 8 sessions

Q4 Results Review

Post the March quarter results, brokerages Nuvama and Nomura, retained their neutral outlook but reduced the target price for the stock on the back of its expensive valuations. However, domestic brokerage Choice raised its target price for the stock with a buy call.

Nuvama: The brokerage cut its target price on the company to 2,650, down from 2,800 while maintaining its 'hold' call. It also cut its earnings estimates for FY25 and FY26 by 3.7 percent and 2.9 percent, respectively, to factor in lower growth post the March quarter results. The brokerage also noted that paid supplier addition for the firm continues to remain subdued as churn in the silver category remains elevated.

"IndiaMart has delivered consistent growth since Covid-19, with a mix of volume and higher realisation. However, over the last three quarters, this growth has largely been driven by higher realisation. While we appreciate the company's strong position and leadership in the B2B e-commerce marketplace, we believe that elevated churn would keep subscriber addition counts lower, thereby impacting collection/revenue growth," it said.

Read here: Q4 results review: Havells India shares hit record high despite MOSL downgrade

Nomura: Nomura also reiterated its 'neutral' stance on the firm but reduced its target price to 2,520 from 2,530 earlier.

Nomura noted that the recent price hike and the base effect of high subscriber additions in FY23 contributed to the elevated churn rates in the silver category for IndiaMART. The brokerage expressed concern over the company's business model, highlighting weak growth in business inquiries and high subscriber additions as factors that lead to diminishing returns for paying subscribers. These issues suggest potential challenges in the company's approach to customer acquisition and retention, which could impact its overall business performance.

Read here: ICICI Bank denies report of MD & CEO Sandeep Bakhshi wanting to quit

Choice: Contrary to the other two brokerage views, Choice maintained its buy call on the stock and raised its target price of 2,985.

IndiaMart continues to make investments in strengthening their organisation to leverage the growth opportunities. Growth will be driven by new sales, service and marketing head, focus on tier1 and tier 2 suppliers and ARPU growth in the gold and platinum segment, it rationaled.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

 

 

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Published: 02 May 2024, 03:13 PM IST
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