Nuvama upgrades IndiaMART to 'Buy'; ups target to ₹3,800 on growth revival

Nuvama on IndiaMART: Online marketing company IndiaMART shares are likely to remain in focus on Wednesday, June 25, 2025, after domestic brokerage firm Nuvama upgraded the stock to ‘Buy’ from ‘Reduce’, citing a revival in growth momentum. The brokerage has sharply raised IndiaMART's target price to ₹3,800 from ₹2,100, indicating an upside potential of 52 per cent.

 

“We upgrade IndiaMART from ‘Reduce’ to ‘Buy'—following earlier downgrades in October-23 to ‘Hold’ and October-24 to ‘Reduce’—as we believe the business is entering a new demand upcycle,” Nikhil Choudhary and Parth Ghiya, analysts at Nuvama said, in a report dated June 24, 2025.  On the bourses, following the upgrade, IndiaMART shares rallied up to 6.25 per cent to hit an intraday high of ₹2,650 per share. Around 9:20 AM, the stock was trading 5.25 per cent higher at ₹2,625 per share. In comparison, BSE Sensex was trading 0.47 per cent higher at 82,444.77 levels.

 

     

The upgrade, analysts said, is driven by management's strategic steps such as platform improvements, brand marketing investments, and salesforce insourcing, which are expected to lead to a sustained rise in unique business enquiries and eventually higher net new subscriber additions.

 

That said, earnings estimates for FY26E and FY27E have been increased by about 9–10 per cent, led by stronger revenue outlook. However, profitability has been slightly lowered. Notably, Nuvama has raised the target valuation multiple from 22x to 35x—"same as pre-downgrade level"—reflecting improving growth prospects. 

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The brokerage noted that IndiaMART has faced high churn in its silver subscriber base over the past two years, with average unique enquiries per paid supplier per quarter dropping to 106 in Q1FY24—below its long-term average of 130 and even pre-Covid levels. However, after a series of corrective actions by the management, this metric has improved to 125 in Q4FY25.

 

Nuvama observed, "Management is on the right path by reducing the number of supplier enquiries from ~7 to < 4 now, thereby reducing competition within suppliers." The brokerage believes these changes, coupled with increased buyer engagement, will drive a turnaround in subscriber additions by Q2/Q3, which will further fuel a rebound in collection and revenue growth.

 

While margins are expected to normalise to the mid-30 per cent range, Nuvama maintains that “this normalisation will not alter investor sentiment,” as historical trends show limited stock correlation with margin fluctuations.

 

IndiaMART currently trades at a one-year forward P/E of 28x versus its post-listing average of 45x. “We reckon valuation shall rerate due to improving growth trajectory,” the brokerage said, introducing FY28E estimates and rolling forward valuations to Q1FY28. The revised 35x multiple yields a target price of ₹3,800.