IndiaMART InterMESH Ltd: Navigating Growth and Innovation in Q2 FY26

IndiaMART InterMESH Ltd., India's largest online B2B marketplace, has reported a robust performance for the second quarter of Fiscal Year 2026 (Q2 FY26), demonstrating resilience and strategic foresight amidst evolving market dynamics. The company's consolidated revenue from operations reached Rs. 391 crore, marking a commendable 12% year-on-year (YoY) growth. This top-line expansion was complemented by a 14% YoY increase in collections from customers, totaling Rs. 406 crore. Consolidated EBITDA stood at Rs. 130 crore, representing a 33% margin, while net profit for the quarter was Rs. 83 crore. The company's cash and treasury balance remained strong at Rs. 2,874 crore as of September 30, 2025.

The quarter's operational highlights underscore IndiaMART's continued efforts to enhance its platform and expand its reach. Unique business inquiries grew by 12% YoY to 31 million, reflecting improved engagement and the effectiveness of performance marketing. The total number of paying suppliers reached 2.22 lakh, with net additions of approximately 2,800, excluding a one-time benefit from a simplified onboarding process. This simplification, which now allows immediate activation of new silver subscribers by bypassing previous 3-7 day waits for payment and GST verification, is a testament to the company's focus on operational efficiency.

Strategic Initiatives Driving Future Growth

IndiaMART is actively pursuing several strategic initiatives to deepen its market penetration and enhance its value proposition. A significant focus is on AI integration, with the company implementing a growing range of AI use cases to strengthen its platform and product offerings. Management anticipates AI bots will handle up to 1 lakh calls per day by January 1st, improving query resolution and overall customer service. This AI-driven approach also extends to enhancing cataloguing and categorization, making the platform more efficient for both buyers and suppliers.

Another key strategy involves refining buyer-supplier matchmaking. IndiaMART is reducing the number of suppliers introduced per buyer and encouraging buyers to provide more detailed inquiry specifications. This, coupled with localized search results, aims to improve the quality and relevancy of leads for suppliers, thereby boosting their satisfaction and retention. The company is also strategically focusing on large and medium enterprises, recognizing their potential for higher ARPU (Average Revenue Per User) and ability to serve larger markets.

IndiaMART's expansion into business enablement services, including fintech and accounting solutions, represents a crucial step towards becoming a comprehensive B2B ecosystem. This includes offerings like credit facilitation, logistics, inventory management, payroll, and tax compliance, aiming to provide end-to-end support for businesses. The company's investments in accounting software businesses like Busy Infotech and Livekeeping Technologies are integral to this strategy, providing mobile and cloud functionality to Tally users and expanding the reach of business accounting solutions.

Financial Summary

Addressing Challenges and Outlook

Despite the positive overall performance, IndiaMART faces certain challenges. The company observed a decline in other income due to mark-to-market losses on its treasury portfolio, influenced by increased bond yields. Furthermore, the churn rate among silver-tier customers remains elevated, a point management is actively working to address through various interventions. The reliability of traffic growth metrics has also become a concern, as distinguishing human user traffic from bot and scraping activity is increasingly difficult in the age of advanced AI.

Looking ahead, IndiaMART's management remains optimistic about its long-term growth trajectory. They anticipate an ARPU growth of 6-8% and expect selling and marketing costs to stabilize around 16-18% of revenues. The company's commitment to continuous innovation, particularly in AI and business enablement, positions it well to capitalize on the vast addressable market of Indian SMEs. By focusing on quality leads, enhancing platform utility, and expanding its service offerings, IndiaMART aims to sustain its leadership in the online B2B marketplace and drive long-term value for its stakeholders.

Key Operational Metrics (Standalone)

IndiaMART's Q2 FY26 results reflect a company strategically investing in its platform and ecosystem, balancing growth with operational efficiency. The journey towards comprehensive commerce and business enablement is well underway, promising a more integrated and valuable experience for its diverse customer base.