Indiamart Intermesh Ltd Management Discussions

Economy Overview

In CY 2024, the global economy demonstrated resilience, achieving a growth rate of 3.3% despite rising geopolitical uncertainities, Global inflation declined sharply to 5.7% in CY 2024 from 6.7% in CY 2023. But the outlook for the global economy is likely to be uncertain primarily due to US tariff policies which have unsettled global trade dynamics. India, though, is likely to fare significantly better than other economies due to robust macroeconomic fundamentals and strong domestic demand. Additionally, the Reserve Bank of India (RBI) has adopted an accommodative stance, with further policy easing anticipated in FY 2026, which could stimulate credit growth and boost business expansion. Inflation is forecasted to remain around 4% in FY 2026, elevating purchasing power and bolstering both urban and rural consumption.

Industry Overview⁶

The Micro, Small, and Medium Enterprises (MSME) sector remains a key pillar of Indias economy, driving substantial growth in manufacturing, exports, and employment. Serving as crucial ancillary units to large industries, MSMEs foster inclusive industrial development by promoting innovation and entrepreneurship across diverse sectors. Their expanding presence in both domestic and global markets enables the production of a wide range of goods and services, fuelling economic diversification. Importantly, MSMEs generate vast employment opportunities at relatively low capital investment, making them instrumental in uplifting rural and backward regions. This helps bridge regional disparities, supports a more balanced and equitable distribution of income and wealth, contributing significantly to Indias overall socio-economic progress.

Introduced in July 2020, the Udyam Registration Portal has become a critical driver for the growth of Indias MSME sector. It offers a free, paperless, and self-declaration-based process that simplifies business registration and enhances the ease of doing business. By integrating informal micro-enterprises into the formal economy, the portal has expanded access to government benefits and streamlined compliance.

The Indian digital advertising industry closed 2024 with a market size of H 49,251 crore, reflecting a growth rate of 21.1% compared to 2023. Digital media is expected to continue outpacing other advertising forms. Going forward, we expect digital media to grow at a compounded annual growth rate of 19.09%, reaching a market size of H 69,856 crore by the end of 2026.

Digital Advertising Industry*

Digital Adoption

India continues to witness a rapid rise in internet penetration, with the number of internet users crossing 900 million in 2025, up from around 759 million in 2022. Out of this 556 million are Urban internet subscribers and 398 million are rural internet subscribers. This growth is driven by affordable data, increasing smartphone adoption, and expanding rural connectivity. With over 55% internet penetration, India now ranks among the top three countries globally in terms of user base. This digital acceleration presents a significant opportunity for internet-based platforms to scale across Bharat.

The advent of digitalization has transformed the Indian MSME landscape by democratizing market access, streamlining operations, and enhancing overall competitiveness. Government initiatives like "Digital India" and "Make in India" have played a pivotal role by placing MSMEs at the centre of economic growth, manufacturing, and job creation. Key reforms and platforms such as UPI, Aadhaar, DigiLocker, E-Invoicing, E-way Bill, TReDS, ONDC, OCEN, and the Digital MSME Scheme have significantly reduced friction in business processes, improved access to credit, and opened new digital avenues. These measures have enabled MSMEs to scale operations, adopt formal financial systems, and expand beyond traditional boundaries, thus driving inclusive growth in the digital economy.

Business Overview

IndiaMART is Indias largest online B2B marketplace, facilitating seamless connections between prospective buyers and registered suppliers. Our platform enables efficient matchmaking and discovery of goods and services, supporting businesses across diverse industries. As of March 31, 2025, IndiaMART had a robust network of 211 million registered buyers and 8.4 million registered suppliers, including 217k paying suppliers. With an extensive supplier base, the platform currently features 119 million products across 98,000 categories and 56 industries, ensuring convenient discovery and sourcing of products from a vast pool of reliable suppliers. IndiaMARTs strong network drives platform growth, with an increasing number of buyers generating more business enquiries for suppliers, encouraging more suppliers to list their offerings through dedicated web storefronts. This, in turn, attracts additional buyers, reinforcing a cycle of continuous expansion. During FY 2024-25, IndiaMART recorded 110 crore traffic. we provides suppliers with enhanced online visibility, enabling them to showcase their products and generate business enquiries from prospective buyers. Our platform offers access to Requests for Quotations (RFQs) or Buy-Leads, facilitating seamless connections that drive business growth.

For our paying suppliers, we offer RFQ selection credits along with additional value-added services, included in our subscription packages, such as detailed buyer profiles, requisite buylead details, a lead management system and cloud telephony services. These features help suppliers efficiently manage and respond to enquiries, improving lead selection and response management, ultimately enhancing the business outcomes.

We leverage behavioural data-driven algorithmic matchmaking to connect buyers with the most relevant suppliers based on their displayed product, price, location and quantity preferences on the platform. These intelligent algorithms continuously analyse user interactions and refine their recommendations over time, ensuring an optimised and efficient matchmaking process as the buyer and supplier activity grows. Better matchmaking has enabled us to gradually reduce the number of times each enquiry gets delivered to a supplier. As part of our ongoing efforts to enhance the buyer experience through product improvements and to better fulfill their requirements, we observed a 90-day repeat rate of 58% in Q4 and 55% for entire year. We have an app rating of 4.8 on Google Play Store which further validates the user friendliness and effectiveness of our platform.

Revenue and Paying Suppliers

While the majority of suppliers on our platform are registered for free, our revenues are primarily derived from paid subscription packages, which are availed by 217K suppliers listed on the platform. Most paying suppliers initially subscribe to the Silver subscription tier before upgrading to Gold and Platinum subscriptions. These premium packages offer enhanced visibility and access to a greater number of RFQs, resulting in more business enquiries for suppliers. Suppliers subscribed to export oriented platinum packages also get access to export RFQs.

Upgrades to premium subscription packages improve the ARPU (Average Revenue Per User) as well as Supplier retention of our overall business, as we experience much higher supplier retention in Gold and Platinum packages as compared to Silver packages. Last year we have introduced category-based differential pricing for our platinum packages, which provides us with another lever to enhance ARPU.

All subscription packages are available on an annual or multi-year basis, while the Silver package is also offered as a monthly subscription. Subscription fees are collected upfront, regardless of the package duration. The revenue is recognised progressively over the subscription period. Any unrecognised revenue is classified as Deferred Revenue and recorded under ‘Contract Liability in our Balance Sheet. As of March 31, 2025, our Standalone Deferred Revenue stood at Rs. 16,003 million, providing enhanced revenue visibility and stability.

Paying Suppliers

(in thousands)

The suppliers in Gold and Platinum bucket constitute approximately 50% of our paying suppliers and contribute approximately 75% to our operating revenues. Our overall ARPU grew by 15% vs FY 2023-24. Our Revenue from operations grew to Rs. 13,201 million in FY 2024-25 which amounts to 16% growth on a YoY basis.

While the suppliers subscribed to Gold and Platinum packages continue to showcase good retention and upgrade rates, but, since FY 24, we are facing lower retention in silver bucket. The factors likely contributing to this are the rapid growth in paying suppliers post covid, which is being followed up by a period of consolidation, increased competition amongst sellers on the platform, and the necessity for enhancements in product usability and functionality. As a result, our net paying suppliers addition for FY 2024-25 was 2 thousand, which is significantly lower than the rate observed in the previous few fiscal years.

We are taking several steps to improve the retention of suppliers on silver packages. We have reduced the number of times each buyer enquiry gets delivered to a supplier. This reduction is aimed at easing the competition for each enquiry, likely leading to better conversion for the suppliers. Additionally, we are recalibrating our acquisition strategy by focusing on quality acquisitions, better customer onboarding, and servicing. We are also improving the quality of enquiries getting posted by the buyers by optimising buyers search and RFQ journey, as well as prioritising local matchmaking to improve relevancy.

Sales and Servicing Network

IndiaMARTs Sales and Servicing Network operates across India, ensuring seamless supplier engagement and customer support. We have a dedicated sales team for acquiring and on-boarding new paying suppliers and customer servicing teams for managing relationships with existing paying customers to facilitate a smooth experience on the platform.

Our sales team plays a key role in the conversion of free suppliers to paying suppliers. This team consists of in-house sales representatives and channel partners, who engage with suppliers through a combination of in-person meetings and tele-calling. The sales process is enabled by dynamic customer data allocation, supplier activity-based lead generation and a mobile ERP system to optimise efficiency. Additionally, an elaborate supplier verification, on-boarding and training process ensures that new suppliers are on-boarded with right expectations. Through these efforts, the sales team also contributes to the enhancement of IndiaMARTs brand presence by communicating the platforms capabilities to a wider business audience.

Our servicing team, comprising an in-house team of telephone and field sales representatives, focuses on customer success by assisting suppliers throughout their journey on IndiaMART. They provide training and guidance, address customer queries and ensure that suppliers derive optimal value from the platform. Their responsibilities also include scheduled customer interactions and event-based interventions to strengthen relationships. Additionally, the servicing team manages subscription renewals and upgrades to premium services, supporting long-term engagement and retention.

By leveraging a structured sales and servicing approach, IndiaMART continues to enhance supplier experience, drive engagement and foster sustainable business growth

During the year, we expanded our employee base to build a strong 5,211 sales and service personnel team. Strategic partnerships with nearly 120 channel partner locations now enable IndiaMART to serve customers in over 1,000 cities and towns. We are further strengthening our regional sales and service networks by decentralising and building senior leadership, empowering faster decision-making, and creating a better understanding of regional needs and preferences.

Gen-AI Opportunity

We leverage AI-powered solutions to improve the user experience on our platform. With advanced language comprehension, our technology enables precise search results, even when queries are in ‘Hinglish. We also use AI to expedite product cataloguing, enhance visual display, photo upscaling, PII detection, photo and voice search and spam detection on the platform. The Platforms product category mapping is witnessing continuous improvement through the integration of generative AI and other machine learning techniques. These techniques also boost SEO and improve user interactions. We have also enabled an AI-powered chatbot on the platform to provide users with assistance as they use the platform.

Furthermore, our Lead Management System uses AI to evaluate buyer requests and offer personalized suggestions, enabling faster replies, enhancing conversion rates and creating stronger connections with customers. The platform utilises behaviour-driven algorithmic matchmaking that takes into account the preferences and behaviours of sellers and connects them with the most suitable buyer. As more users engage with the platform, the system continuously improves, becoming better at making accurate connections. This ensures that suppliers receive only the most relevant enquiries, increasing overall efficiency for both buyers and suppliers.

Financial Overview-Standalone

The standalone financial results reflect the performance of our IndiaMART.com B2B marketplace business which contributes ~95% of Revenue from Operations to the consolidated business.

Key Financial Statistics

		(‘Amount in H Million)
Metric	FY 2024-25	FY 2023-24	Change (%)
Collections from	15,256	13,993	9%
Customers
Deferred Revenue*	16,003	13,947	15%
Revenue from	13,201	11,390	16%
Operations
EBITDA	5,134	3,339	54%
PBT	7,730	4,746	63%
Net Profit	6,072	3,622	68%
Cash from	6,140	5,451	13%
Operations

*Includes Advances from Customers

Note: The above figures are on a standalone basis.

Our major expenses primarily comprise employee benefits and outsourced sales costs, which together accounted for 47% of our revenue from operations in FY 2024-25. These expenses include costs related to our sales and service teams, which play a crucial role in driving the growth of our paying suppliers, supporting existing customers and facilitating upselling to higher-value subscription packages. For the year ended March 31, 2025, our standalone EBITDA and PAT were recorded at Rs. 5,134 million and Rs. 6,072 million, respectively. Furthermore, we present a functional breakdown of our standalone profit and loss statement, categorising expenses based on business functions. This includes customer service costs associated with servicing paying suppliers, selling and marketing costs related to acquiring new suppliers, technology and content expenses for developing and maintaining our digital infrastructure and general and administration expenses.

Cost Breakup

Lower net additions during the fiscal year, cost optimization initiatives, and the inherent leverage in the business have contributed to the improvement in our margins. Our EBITDA margin stood at 39% for the year ended March 31, 2025.

		(‘Amount inH Million)
Metric	FY 2024-25	FY 2023-24	Change (%)
Revenue from	13,201	11,390	16%
Operations
Customer Service	(3,033)	(3,088)	(2%)
Cost
Gross Profit	10,168	8,302	22%
Gross Margin	77%	73%
Selling &	(1,806)	(2,107)	(14%)
Marketing
% of Revenue	14%	18%
Technology &	(2,008)	(1,990)	1%
Content
% of Revenue	15%	17%
General &	(1,219)	(867)	41%
Administration
EBITDA	5,134	3,339	54%
EBITDA Margin	39%	29%

Given the upfront collection of subscription fees, we operate a negative working capital business model. We prioritise providing timely liquidity to our stakeholders, including vendors and employees. Salaries and incentives are paid out weekly and we maintain low payable days at 44 days. Our standalone cash generated from operations during FY 2024-25 stood at Rs. 6,140 million.

Financial Overview-Consolidated

Key financial statistics

		(‘Amount in H Million)
Particulars	FY 2024-25	FY 2023-24	Change (%)
Collection from	16,260	14,743	10%
customers
Deferred revenue*	16,776	14,400	17%
Revenue from operations	13,883	11,968	16%
PBT	7,058	4,544	55%
Net Profit	5,507	3,340	65%
Earnings per share (in H)	91.8	55.2	66%
Cash from Operations	6,232	5,592	11%
Cash and Treasury	28,850	23,402	23%
Investments

Note: The above figures are on a consolidated basis *Includes Advances from Customers

Key financial ratios

Particulars	FY 2024-25	FY 2023-24	Change (%)
Current ratio	2.4	2.2	8%
Debt-Equity ratio	0.02	0.02	-35%
Debt Service	19.9	10.9	83%
Coverage Ratio
Interest coverage	96.3	52.2	85%
Ratio

 

		(‘Amount inH Million)
Particulars	FY 2024-25	FY 2023-24	Change (%)
Return on	28.1%	17.6%	60%
net-worth
Trade Receivables	21.5	13.6	58%
Turnover Ratio
Trade Payables	8.6	10.4	-17%
Turnover
Net Capital	0.8	0.9	-12%
Turnover Ratio
Net Profit Margin	39.7%	27.9%	42%
Operating Profit	35.3%	24.6%	43%
Margin
EBITDA Margin	37.7%	27.7%	36%
Return on Capital	31.5%	25.6%	23%
Employed
Return on	8.1%	8.4%	-4%
Investment
Debt to EBITDA	0.1	0.1	-49%

Note: The above ratios are on a consolidated basis.

Our Foray into Accounting Space

The accounting software sector within Indias digital services ecosystem is experiencing accelerated growth, fuelled by the increasing formalisation of the economy and the rising demand from MSMEs for efficient compliance management solutions. As businesses face growing requirements for E-Way bill generation and GST reporting, the need for digital and streamlined tools is becoming more pronounced. Indian business owners, in particular, are now seeking mobile-friendly solutions, real-time access to data and prefer concise insights on the go. The shift towards user-friendly, digitally accessible accounting software is expected to drive significant change in the industry in the coming years. With acquisitions of Busy Infotech and Livekeeping Technologies, alongside investments in Simply Vyapar Apps and Realbooks, we are well-positioned to capitalize on this growing demand.

Busy Infotech

For over 25 years, Busy Infotech has been a leading brand in the Indian accounting software landscape. Since its acquisition in April 2022, we have focused on accelerating growth through product enhancements, improved data accessibility across desktop, mobile and cloud platforms and a wider sales network across India.

We have introduced the Busy Mobile App and Busy Online, to further enhance accessibility and user experience. The Busy Mobile App extends the capabilities of Busy Accounting Software to smartphones (Android/iOS), allowing business owners and accountants to efficiently manage invoices, inventory and financial reports on the go. This enables real-time decision-making and operational control, essential for dynamic business environments. Meanwhile, Busy Online brings the widely used desktop version of Busy to the cloud, offering businesses a secure, real-time collaboration platform. Designed for enterprises with multiple locations or remote teams, it facilitates seamless data sharing, automatic updates and enhanced security, ensuring flexibility and efficiency in business operations.

In FY 2024-25, Busy sold 33 K new licenses, 9% higher than the previous year. Revenue for the year grew by 10% to 658 million and Deferred Revenue as at March 31, 2025 was at 723 million, 48% higher over the previous year.

Other Investments

We have made strategic investments in fintech, logistics and business enablement software in addition to accounting software. These investments are meant to streamline various business functions, including processing, sales, procurement, distribution, logistics and human resources.

During the fiscal year, the company disinvested its entire stake of 26% in Shipway Technology Private Limited for a consideration of H 41.6 crore resulting in a gain of H 24 crore. Further, we acquired 10% stake for H 90 crore in Baldor Technologies Pvt. Ltd. which runs ‘Idfy, an integrated identity verification and fraud detection platform. We made follow on investments of H 11 crore in Simply Vyapar, H 10 crore in Superprocure, H 5 crore in Easyecom, H 14 crore in Bizom, H 28 crore in Fleetx and H 4 crore in M1 exchange.

Investee Company	Cost of Investment as on March 31, 2025 Rs,. Mn)	Ownership as on March 31, 2025
Busy Infotech	5,071	100.0%
Livekeeping	594	66.0%
Technologies
Fleetx Technologies	1,197	20.1%
IB MonotaRO	1,179	23.7%
Simply Vyapar Apps	1,079	28.7%
Baldor Technologies	897	10.0%
Mobisy Technologies	669	31.3%
Mynd Solutions	530	9.6%
Truckhall	315	35.0%
Agillos E-Commerce	260	26.2%
Edgewise Technologies	183	26.0%
Zimyo Consulting	170	10.0%
Adansa Solutions	138	26.0%
Legistify Services	88	15.4%
Instant Procurement	14	13.0%
Services

We will continue to explore investment opportunities that improve our platforms ability to support and empower businesses. This aligns with our vision of building a comprehensive ecosystem that serves the needs of small businesses.

Growth Strategy

Our growth strategy focuses on expanding the adoption of IndiaMARTs platform by attracting a broader base of buyers and suppliers, regardless of enterprise size. To achieve this, we continuously enhance our core value proposition by offering access to a diverse product assortment while ensuring a simple and efficient commerce experience for all users.

Looking ahead, our goal is to evolve into a comprehensive, one-stop solution that supports businesses in enhancing their ease of operations. We remain committed to investing in accounting software, given the significant growth potential in this segment. Additionally, we will continue exploring and investing in business-relevant solutions that align with our vision of empowering enterprises and driving long-term value.

Return to Shareholders

As at March 31, 2025, we had H 28,850 Mn as Cash and Treasury Investments. Our treasury continues to be managed within the framework of an approved investment policy statement. We invest in highly rated, low-risk instruments with capital preservation as the primary objective. This approach helps us mitigate financial risks arising from market volatility. We aim to maintain cash levels aligned with the scale of our operations and future growth plans, while also returning surplus capital to our shareholders through dividends or buybacks.

The Board of Directors, at their meeting held on April 29, 2025, have recommended a final dividend of H 30 per share for FY 2024-25 and a special dividend of H 20 per share, aggregating to total dividend of H 50 per share, subject to approval of shareholders.

The table below illustrates the year-on-year amount that is distributed to the shareholders as a percentage of cash generated f rom operations.

Human Resource Management

IndiaMART considers its employees to be the most vital pillars of its growth story. We acknowledge the dedication and consistency of our workforce, whose contributions are essential to our success. We align employee objectives with our financial goals to achieve mutually beneficial results.

We prioritise creating an optimal workplace environment that offers ample opportunities for learning, growth and development. We engage with our employees through various formats, including one-on-one meetings between employees and managers, regular team interactions, quarterly town halls with senior management and several other sessions. These initiatives help strengthen connections with our employees, allowing them to express themselves effectively while remaining aligned with our core values and vision.

To further enhance accountability, we have implemented a transparent employee issue resolution and feedback system to address their queries and concerns. Our ‘employee-first approach has led us to implement several initiatives, such as iLEAP, our education sponsorship programme designed to help employees enhance their skills and prepare for future opportunities and iLEAD, our Management Development Program. Additionally, we have introduced weekly salary pay-outs to improve our employees financial well-being.

We also maintain a comprehensive and objective rewards and recognition programme that acknowledges our employees contributions on both a monthly and annual basis. Further, the Company strongly believes in providing wealth-building opportunities through stock-based retention programmes such as SARs and ESOPs. As on March 31, 2025, 700+ employees have been covered under the companys SAR/ ESOPs program.

During the year, we strengthen our leadership team by welcoming Mr. Jitin Diwan as Chief Financial Officer and Mr. Saurabh Deep Singla as Chief Human Resource Officer. Additionally, Mr. Prateek Chandra, the former Chief Financial Officer, transitioned to a new role as Chief Strategy Officer.

For further information, please refer to the employee section ofthe ESG report.

Data Privacy and Risk Management

We have established robust frameworks and protocols to identify, assess and mitigate risks effectively. The risk management process is continuously evaluated and updated to align with evolving challenges, ensuring it remains agile and responsive to the changing business landscape.

We have implemented a comprehensive Information Security Policy to address IP rights and safeguard the Company from information security lapses, involving all relevant stakeholders. As an ISO / IEC 27001:2013 certified organisation, we follow rigorous information security protocols. Additionally, we have enhanced our Information Security Management System (ISMS) - ISO 27001 by adopting Privacy Information Management System (PIMS) - ISO 27701, focusing on the protection of Personally Identifiable Information (PII).

We also have in place a Business Continuity and Management System (BCMS) certified under ISO 22301:2019, designed to identify and mitigate potential disruptions to business operations. Furthermore, to reinforce our commitment to economic resilience, organisational reputation and sustainable practices, we achieved ISO 31000 certificate for Enterprise Risk Management during the year.

Internal Control Systems

The Company has a well-established internal control framework supported by well-structured systems, policies and procedures to ensure financial discipline. The internal control systems are appropriately designed to align with the nature, scale and complexity of operations. Throughout the year, these controls were rigorously tested and no material weaknesses were identified.

Outlook

We are cognizant of the significant growth opportunity that lies before us as India MSMEs transition to digital solutions. we believe that IndiaMARTs unique value proposition, market leadership, and product capabilities remains strong Further our acquisitions and strategic investments are likely to help us enhance the value we are able to deliver to our stakeholders. We remain optimistic of leveraging our strengths and our culture of innovation to keep playing the leadership role in "Make doing business easy" in India.

Cautionary Statement

The statements in the Management Discussion and Analysis outlining the Companys objectives, projections, estimates and expectations may be considered ‘forward-looking statements under applicable laws and regulations. Actual results may differ significantly from those expressed or implied due to various factors. Key influences include climatic conditions, economic fluctuations impacting demand-supply dynamics and pricing in both domestic and international markets, regulatory changes, amendments in tax laws and other unforeseen factors.