Financial Performance Highlights

Consolidated Results (Q2 FY27):

  • Revenue from operations: ₹429 crore (10% YoY growth)
  • Collection from customers: ₹443 crore (9% YoY growth)
  • Deferred revenue: ₹2,029 crore (16% YoY growth)
  • EBITDA: ₹159 crore (37% margin)
  • Other income: Negative ₹8 crore (due to MTM losses from increased bond yields, considered notional and expected to reverse)
  • Net profit: ₹91 crore
  • Cash generated from operations: ₹135 crore
  • Cash and treasury balance: ₹3,234 crore

IndiaMART Standalone (Q2 FY27):

  • Collection from customers: ₹394 crore (8% YoY growth)

Operational Metrics:

  • Unique business enquiries: 27 million in Q2
  • Total paying suppliers: 217,000 (net decline of 615 suppliers during quarter)
  • Platinum and Gold customers contribute approximately 50% of customer base and 75% of revenue

BUSY Infotech Performance (Q2 FY27):

  • Billing: ₹46 crore (20% YoY growth)
  • Revenue from operations: ₹37 crore (27% YoY growth)
  • Deferred revenue: ₹155 crore (40% YoY growth)
  • Cash from operations: ₹12 crore
  • New licenses sold: 11,000 (total licenses sold: 466,000)

Strategic Developments

AI Integration:

  • Enhancing AI capabilities across platform including intelligent matchmaking and standardized cataloguing
  • Leveraging AI for voice-based applications (serving 80,000-100,000 buyers daily through voice AI agent)
  • Using multiple AI models (Gemini, Claude, ChatGPT, Gemma, Alibaba Qwen, Grok)
  • All AI-related expenses expensed out (not capitalized)

Platform Enhancements:

  • Implementing multi-layered user verification and platform protection features
  • Launching Trust Assurance Program (buyer protection up to ₹5 lakh for verified purchases)
  • BUSY launched BUSY Magic with new UI interface
  • Revamping entire BUSY technology base

Market Position Challenges:

  • 10-15% decline in business enquiries attributed to:
  • Putting proprietary data behind login protection
  • Protection from LLM data scraping
  • Google AI Overviews expansion affecting search traffic
  • Focusing advertising spend (₹8-9 crore per quarter) on top quartile categories

Customer Base Dynamics:

  • Silver subscription tier experiencing elevated churn
  • Gold and Platinum customers showing good upsell and retention rates
  • Working on improving Silver customer acquisition quality and targeting
  • Experiments with buyer verification (PAN, GST, Udyam) and potential buyer monetization programs

Management Commentary & Guidance

Growth Strategy:

  • Long-term expectation of balanced value (ARPU) and volume (customer) growth
  • Currently growth primarily from ARPU increases rather than customer additions
  • Will increase sales investment when churn improves

Margin Outlook:

  • Long-term EBITDA margin guidance of 33% for IndiaMART
  • Current elevated margins (37% in Q2) due to quarterly timing of cost recognition

ESOP Costs:

  • ESOP expenses decreased due to natural scheme design and employee churn
  • Baseline ESOP expense expected to remain at current level
  • Next major ESOP allocation likely at financial year end (board decision)

Credit Facilitation:

  • Early-stage experiments with credit facilitation to improve buyer experience
  • No significant capital committed currently
  • Focus on zero-risk, fee-based distribution marketplace model
  • No immediate plans for NBFC license or FLDG arrangements

Integration Initiatives:

  • Started integrating BUSY, Livekeeping and IndiaMART at backend
  • Data exchanges and technology integration underway

Q&A Session Highlights

Competitive Landscape:

  • Monitoring competitor moves toward marketplace models
  • Previous experiments with Tolexo and payment platforms
  • Focus on moving closer to transaction without abandoning listing model

Technology Strategy:

  • Using both in-house and external AI models
  • Focus on protecting proprietary data while exploring revenue opportunities from non-PII data
  • Believed IndiaMART data is valuable for AI integration and market position protection

Financial Management:

  • All expenses expensed out (no capitalization of manpower or software costs)
  • Capital allocation decisions including buybacks are board matters