Rising Expenses and Shrinking Margins Drag Down Profit to INR 83 Cr Amid Steady Operational Growth
Profit Decline Overshadows Revenue Growth
B2B ecommerce platform IndiaMART InterMESH reported a sharp 39% YoY drop in net profit, falling to INR 82.7 Cr in Q2 FY26, compared to INR 134.5 Cr in the year-ago period. The downturn deepened 47% sequentially, down from INR 151.3 Cr in Q1 FY26.
Despite the bottom-line pressure, operating revenue rose 13% YoY and 5% QoQ to INR 391 Cr, reflecting solid topline momentum.
EBITDA Margins Under Strain
The company’s EBITDA declined 4% YoY to INR 130 Cr, with the EBITDA margin compressing to 33%, signaling margin headwinds amid higher costs.
- Total income stood at INR 401.2 Cr, including INR 10.2 Cr in other income, which was lower than previous quarters, contributing to the weaker profitability.
- Compared to Q2 FY25, total income dipped 3% YoY, and 14% QoQ.
Expenses Continue to Surge
IndiaMART’s expenses spiked 21% YoY and 9% QoQ to reach INR 269.2 Cr, eroding the gains from growing revenue.
This rise in expenditure has been attributed to increased investments in platform improvement, customer engagement, and expansion of service offerings.
Customer Metrics Show Positive Momentum
Despite profit challenges, operational metrics show resilience:
- Collections from customers grew 8% YoY to INR 365 Cr
- Deferred revenue stood at INR 1,633 Cr
- Ecommerce revenue from web and related services increased 9% YoY to INR 360.3 Cr
Platform engagement also improved:
- Unique business enquiries rose 12% YoY to 3.1 Cr
- Supplier storefronts grew 6% YoY to 86 Lakh
- Paying suppliers reached 2.2 Lakh, with a net addition of 4K during the quarter
Busy Infotech Shines Amid Overall Dip
IndiaMART’s accounting software subsidiary, Busy Infotech, delivered standout growth in Q2:
- Revenue surged 88% YoY to INR 29 Cr
- Net billing increased 57% YoY to INR 38 Cr
- Net profit for Busy came in at INR 5 Cr
This segment continues to be a high-growth contributor, indicating success in diversifying IndiaMART’s revenue streams.
CEO Commentary and Outlook
CEO Dinesh Agarwal acknowledged the profitability hit but reiterated the company’s long-term vision:
“We are committed to sustaining our growth momentum, with a continued focus on strengthening the platform, improving user experience for both buyers and suppliers, and building a trusted ecosystem,” he said.
The company emphasized its focus on user engagement, platform enhancements, and operational efficiency, as it seeks to regain margin stability in the coming quarters.
Market Reaction
Following the Q2 announcement, IndiaMART shares fell 0.67%, closing at INR 2,342.40 on the BSE.
