Indiamart Stock Tumbles As Q4 Profit Falls 31% Sequentially

Shares of Indiamart Intermesh Ltd., operator of the namesake online retail platform, fell the most in 13 months as its profit tumbled sequentially in the quarter ended March.

Net profit rose 26% over a year earlier to Rs 56 crore in the three months ended March, according to its exchange filings. But it fell 31% over the previous quarter.

The company reported a deferred tax asset write-off of Rs 10.9 crore on account of latest tax amendments on goodwill recognition.

Consolidated revenue rose 6% year-on-year to Rs 190 crore. It grew 4% sequentially. The company attributed the growth to improvement in realisation from existing customers and increase in number of paying subscription suppliers.

JM Financial Research in its note, however, said the company’s standalone revenue, contributing 99% to the company’s business, missed estimated by a percent or two as period-end paying customer base of 1,52,000 was slightly below the brokerage’s estimates of about 1,54,000. Standalone other income (net of finance expenses) of Rs 4.7 crore was significantly below its estimate of Rs 16.6 crore.

Indiamart’s Ebitda declined 3% sequentially to Rs 85 crore. This was weighed down by a 13% rise in manpower and outsourced sales cost. Operating income, however, rose 63% over a year earlier due to a lower base and a 16% decline in year-on-year manpower costs.

In the fourth quarter, Indiamart successfully completed a qualified institutional placement of equity shares to raise Rs 1,070 crore, the proceeds of which will be used for future growth and expansion.

Cash and Investments balance stood at Rs 2,365 crore as on March 31 compared with Rs 931 crore a year earlier.

The board recommended a final dividend of Rs 15 per share for FY21, subject to shareholder approval.

Shares of Indiamart closed 9.83% down, the most since March 23, 2020, compared with a 1.77% fall in the Nifty 50.