Equirus Securities expects 17% upside in IndiaMart by March 2025
Equirus Securities has initiated coverage on IndiaMART InterMESH, parent of online marketplace IndiaMart, with a 'long' rating and a price target of ₹3,180 by March 2025. The price target implies an upside of 17% over the stock's Friday closing price of ₹2,710.
The brokerage said IndiaMART is trading at a premium to multiples of classifieds-based models listed globally and in India, barring Info Edge.
But its premium valuations are justified, given a healthy earnings growth outlook, strong cash generating abilities, and superior returns profile, it said.
«The company operates with negative working capital due to upfront collections (average subscription packages of 19-20 months), ensuring robust cash generation,» said Equirus' analyst Samarth Patel in a note to clients. The brokerage said it expects strong free cash flow (FCF) generation of ₹27 billion over FY23-FY28 led by operating profit growth and low capex.
IndiaMART shares are up 25% so far in 2023 as against 22% gains in the BSE 500 index.
«INMART has evolved from a pure lead-generation discovery platform to a conversational commerce platform,» said Equirus.
