Why IndiaMART InterMESH Stock Has A 14% Upside From Current Levels?

The stock of IndiaMART InterMESH has an upside target of 14 per cent from current levels, according to the latest report by Motilal Oswal. IndiaMART InterMESH Ltd is an ecommerce company that provides B2C and B2B vis its web portal.

The broking firm recently hosted an interaction with Mr Brijesh Kumar Agrawal, Co-founder and Whole Time Director - IndiaMART InterMESH Ltd, for an update on the business and sectoral trends in the B2B Internet space.

"IndiaMART uses superior analytics to match buyers and sellers on its platform based on the behavioural attributes of the two parties. This creates a roadmap for sustainable volume growth for the company," Motilal Oswal has said.

According to its report, realization growth comes from companies' ability to increase pricing and consistently upsell its customers to higher packages, this is possible due to superior value created by IndiaMART for its customers. The company also continues to build and bundle new products - such as customer relationship management (CRM) and other SaaS offerings - that help improve customer experiences with the website. It currently has CRM bundles with 100k paid subscriptions primarily catering to IndiaMART queries.

"Going ahead company will keep focussing on its core business along with potential growth from entering into other aspects of SME value chain. We remain confident of strong fundamental growth in operations of the company. Our DCF-based Target Price of Rs 5,830 implies upside of 14% from current levels. Reiterate Buy," the broking firm has stated.

Biggest risk

Motilal Oswal has also noted that the biggest risk is that the company could become unknown in the market. The Internet space has various models, driven by ever-changing technology. Disruptive new technology being used to provide a superior user experience could pose a concern. To avoid this, IndiaMART continues to invest in new emerging technology and constantly upgrades its platform and user experience - although there is no visibility on the benefits in the short term. This practice ensures the company platform stays relevant in changing times.

The shares of Indiamart Intermesh were last seen trading at Rs 5,126 on the NSE.