Buy Indiamart Ltd For Target Rs.5,439 - Yes Securities
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Growth in the number of paid customers and Collections remain robust
Our view and valuation
Overall, the financial performance was inline for the quarter. The revenue growth was strong led by robust addition in paid customers. The growth in paid customers is expected to be between 8k?9k per quarter going ahead. The EBITDA margin has stabilized(still lower than margin witnessed during Q1FY21?Q3FY22) on continued investment in manpower, sales and distribution during the quarter. The growth in collections remain robust and provides strong growth outlook. Most of traffic on the portal is organic driven led by strong value proposition with little spending on advertising. It continues to be a leader in B2B online classified segment with around 70% market share and remains a strong play on rising adoption of internet among SMEs. We estimate revenue CAGR of 26.6% over FY22?24E with average EBIT margin of 32.8% over the period.
We maintain BUY on the stock with revised target price of Rs 5,439 /share, based on DCF based valuation. Trades at PER of 30.0x on FY24E EPS.
Result Highlights
* Reported revenue of Rs 2,246 mn( up 11.5% QoQ, up 23.7% YoY), led by 7.1% QoQ increase in average number of paying subscribers. It includes Rs 105mn revenue from accounting software services.
* EBITDA margin increased by 18 bps QoQ to 28.6%, led by positive operating leverage
* Collection increased by 49% YoY to Rs 2,540mn.
* Added robust 9.9k( up 5.8% QoQ) paying subscribers in the quarter to end at 179.3k paying subscribers. Average revenue per user grew 0.4% QoQ to Rs 47.6k.
* Total traffic was 257mn in Q1FY23 vs 260mn in Q4FY22.
* Supplier storefronts increased to 7.2mn compared to 7.1mn in Q4FY22
* Number of registered buyers grew by 5mn QoQ to 154mn.
* Added 163 employees( up 4% QoQ) to reach headcount of 3,835 employees
* Cash and investment decreased by 22% QoQ to Rs 18.8bn
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