IndiaMART Profits decline in Q3 Performance: Net Profit Slides 27% YoY to INR 82 Crore, Achieves 21% Growth in Sales

IndiaMART InterMESH, a prominent B2B marketplace, has reported a consolidated net profit of INR 82 crore in the third quarter (Q3) of the financial year 2023-24 (FY24), marking a 27.4% decline from the INR 112.8 crore recorded in the same period of the previous year.

 

The profit dip is attributed to subdued growth compared to the robust performance in the corresponding quarter of FY23.

 

Despite the annual decline, IndiaMART‘s net profit exhibited an 18.8% quarter-on-quarter (QoQ) increase, rising from INR 69 crore in the previous quarter (Q2 FY24).

 

Operating revenue experienced a 21% surge, reaching INR 305 crore in Q3 FY24 from INR 251 crore in the year-ago quarter. However, on a QoQ basis, the growth was a modest 3.4%, compared to INR 295 crore in Q2 FY24.

 

It is noteworthy that IndiaMART delivered impressive financial results in Q3 FY23, boasting a 61% year-on-year (YoY) increase in net profit and a 34% rise in operating revenue during that period.

 

The number of paying subscription suppliers for IndiaMART saw a mere 9% YoY growth, reaching 2.12 lakh in the reported quarter, with 1,826 suppliers added during this period.

 

The Indian supplier storefronts increased by 5% YoY to 78 lakh, and the platform’s traffic grew by 9% YoY, reaching 27.2 crore. Unique business enquiries also saw a 4% rise, 2.3 crore in Q3 FY24.

 

Dinesh Agarwal, the CEO of IndiaMART, commented on the company’s performance, noting modest growth in revenue, deferred revenue, and healthy operating margins in the third quarter.

 

He expressed confidence in sustained profitable growth and cash flows, citing the increasing digital adoption by businesses as a market opportunity.

 

Agarwal emphasized the company’s ongoing focus on enhancing customer experience and expanding the penetration of paying customers across cities to facilitate online business growth.

 

During the reported quarter, IndiaMART incurred expenses totalling INR 230 crore, reflecting a nearly 20% increase from the INR 192 crore spent in Q3 FY23.

 

Employee benefit expenses accounted for the most significant portion of the total costs, rising by 27.9% YoY to INR 138.5 crore in Q3 FY24.

 

Following the quarterly earnings announcement, IndiaMART’s shares concluded Thursday’s trading session 3.4% lower at INR 2,511 on the BSE.

 

The market reaction suggests investor sentiment may be influenced by the decline in net profit despite positive indicators such as revenue growth and increased paying subscription suppliers.

 

In conclusion, IndiaMART’s Q3 FY24 results reflect a mixed performance, with a decline in net profit YoY but a positive trajectory in revenue growth and other essential operational metrics.

 

The company’s strategic focus on customer experience and expanding paying customers remains pivotal in navigating the evolving B2B marketplace landscape.