IndiaMART Q3 FY26 Profit Surges 56%, Revenue Rises 13%

Introduction

IndiaMART InterMESH announced a robust financial performance for the third quarter of fiscal year 2026, ending December 31, 2025. The company's consolidated net profit saw a significant year-on-year (YoY) increase of 55.62%, reaching Rs 188.3 crore. This strong bottom-line growth was supported by a healthy rise in operational revenue. Following the announcement, the company's shares jumped 3% to Rs 2,207.70, reflecting positive investor sentiment.

Consolidated Financial Performance

For Q3 FY26, IndiaMART's revenue from operations grew by 13.35% YoY to Rs 401.6 crore. The profit before tax (PBT) also showed substantial growth, increasing by 55.35% YoY to Rs 247 crore. However, the company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) experienced a slight contraction, falling 3% YoY to Rs 134 crore. The EBITDA margin for the quarter stood at 33%. The strong profit figures highlight the company's ability to manage costs and improve profitability despite a mixed operational environment.

Operational Metrics and Cash Flow

The company demonstrated strength in its core operational metrics. Collections from customers, a key indicator of business momentum, jumped 17% YoY to Rs 426 crore. This was primarily driven by the standalone IndiaMART business, which contributed Rs 390 crore. Deferred revenue, which represents advance payments for future services, increased by 19% YoY to Rs 1,775 crore as of December 31, 2025, signaling a strong future revenue pipeline. Cash flow from operations for the quarter was healthy at Rs 129 crore, and the company maintained a robust financial position with a cash and investments balance of Rs 3,051 crore.

Standalone Business Performance

The standalone business of IndiaMART also posted impressive results. Standalone net profit surged by 65.01% YoY to Rs 206.1 crore. Revenue from operations for the standalone entity increased by 9.13% to Rs 368 crore in Q3 FY26 compared to the same period in the previous fiscal year.

Key Business Drivers

IndiaMART's growth was supported by an expanding user and supplier base. The platform registered 28 million unique business enquiries during the quarter. The number of supplier storefronts grew by 6% YoY to 8.7 million. At the end of the quarter, the company had 221,000 paying suppliers, indicating steady engagement from its core customer segment. These metrics underscore the platform's continued relevance as India's largest online B2B marketplace.

Management Commentary

Dinesh Agarwal, Chief Executive Officer of IndiaMART, commented on the results, stating, "We are focused on delivering sustained growth by strengthening our platform, enhancing quality, and improving experience and engagement for both buyers and suppliers, while reinforcing trust across the marketplace." He also highlighted the role of AI-enabled technologies in supporting these initiatives and reiterated the company's position to create long-term value for stakeholders, backed by a strong business model and cash generation.

Market Outlook and Analyst Views

While the headline profit numbers were strong, the market is also considering some underlying challenges. The 3% dip in EBITDA suggests some pressure on operational profitability. Furthermore, a foreign brokerage recently downgraded the stock to 'neutral', citing concerns over an unexpected decline in the paying subscriber base and high customer churn. These factors could pose challenges to growth in the near to medium term. The management's focus on onboarding higher-quality suppliers, even if it means slower gross additions, appears to be a strategic response to these concerns.

Conclusion

IndiaMART InterMESH delivered a strong Q3 FY26 with a remarkable 56% surge in net profit and solid revenue growth. Healthy collections and a growing deferred revenue balance point to a stable outlook. However, the slight decline in EBITDA and analyst concerns regarding subscriber churn are key areas to monitor. The company's strong balance sheet, with over Rs 3,000 crore in cash and zero debt, provides a significant cushion to navigate challenges and invest in its long-term strategy of enhancing platform quality and leveraging technology for sustainable growth.