IndiaMART InterMESH jumps after brokerage initiates coverage

IndiaMART InterMESH rose 4.41% to Rs 2,072.70 after a foreign broker initiated coverage on the stock with a 'buy' rating and target price of Rs 2,500.

The foreign brokerage reportedly stated that IndiaMART InterMESH is the dominant B2B classified platform in India. It has strong moats to defend it against the competition. The brokerage expects 20% revenue CAGR over FY20-22 despite macro headwinds. The brokerage feels the margin should expand to 28% by FY22 from 16% in FY19.

The S&P BSE Sensex was down 126.40 points or 0.30% at 41,555.14.

On the technical front, the stock's RSI (relative strength index) stood at 53.169. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading below its 50-day moving average (DMA) placed at Rs 2,014.49. This level would serve as support in the upcoming trading sessions.

On a consolidated basis, IndiaMART InterMESH's net profit fell 57.4% to Rs 8.70 crore on 27.8% surge in net sales to Rs 156.60 crore in Q2 September 2019 over Q2 September 2018.

IndiaMART InterMESH connects buyers with suppliers. The firm's online channel focuses on providing a platform to small and medium enterprises (SMEs), large enterprises, as well as individuals.

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