Indiamart Intermesh: Jefferies initiates coverage with 'buy' rating, sees 26% upside – 6 key reasons why

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Indiamart Intermesh, an online B2B marketplace, with a 'buy' tag, setting a target price of ₹3,400 apiece, which implies a 26% upside from the stock's current trading price. Additionally, in a bull case scenario, the brokerage sets an even higher target price of ₹3,820 for the stock. The brokerage's bullish outlook stems from the company's strong position in the online B2B classified segment, potential revenue growth driven by the rise in digital penetration among SMEs, and reasonable valuations.

Dominant player in B2B classified in India: Indiamart is the largest online B2B classified in India, having over 60% traffic market share. The platform connects SME suppliers and buyers across 95k+ product categories. Monetisation is done through a freemium model where suppliers pay subscription fees for premium services.

The platform has over 185 million registered buyers, and 7.8 million supplier storefronts, of which 212k are paid suppliers. Also Read: Indian stock market to see record inflows as India-China weight gap in MSCI Index narrows to historic low The platform is mobile-centric, with 80% of traffic on mobile. In addition, Indiamart has invested in a portfolio of SaaS products over the last three years.

Well-placed against competition: Indiamart's strong community and network effects, higher value to suppliers, and diversified listings are key moats against competitors. The platform also looks well positioned against horizontal platforms. Strong revenue growth prospects: The brokerage anticipates robust revenue growth for the company, driven by several factors.