IndiaMART InterMESH rallies 22% in 7 days on F&O inclusion

Shares of IndiaMART InterMESH continued their upward journey, surging over 6 per cent to Rs 8,630 on the National Stock Exchange (NSE) on Monday. The stock has rallied 22 per cent in the past seven trading sessions after being included in the derivatives segment (Futures & Options contracts) on the NSE from the new series that began from August 27.

However, despite the recent 7-day rally, the stock has underperformed the S&P BSE Sensex and has gained mere 6 per cent in the past six months as against a 16 per cent surge in the benchmark.

IndiaMART is an internet software & services business provider primarily engaged in the business-to-business (B2B) e-marketplace, which acts as an interactive hub for domestic and international buyers and suppliers. IndiaMART makes it easier to do business by connecting buyers and sellers across product categories and geographies in India through business enablement solutions.

As the economy continues to recover from the impact of Covid-19 and businesses continue to transform themselves through online presence, the domestic economy offers strong opportunities in the long term. IndiaMART has become even more relevant to business in the current pandemic environment and the increasing adoption of digitalisation by micro, small & medium enterprises (MSMEs) at an accelerated pace.

Analysts at HDFC Securities maintain positive stance on IndiaMART based on higher visibility, given the 14 per cent year on year (YoY) growth in deferred revenue; increased activity on the platform despite COVID (registered buyers/unique business enquiries/traffic increased +4.8/8.3/4.3 per cent (QoQ); immense growth opportunity in the highly-underpenetrated B2B e-commerce space; margin expansion on account of cost savings led by automation; healthy cash reserves of Rs 2,420 crore that can be leveraged for further investments; and expected boost to growth from adjacent offerings in accounting, logistics and SaaS based solutions, the brokerage firm said. The stock, is currenlty trading near the its target price of Rs 8,500 per share.