IndiaMart Shares Fall After BofA Slashes Target Price

Shares of IndiaMart InterMesh Ltd. fell over 4% on Tuesday after BofA Securities cut its target price citing near-term impact on growth.

BofA has reiterated 'underperform' on IndiaMart, with target price reduced to Rs 2,100 per share from Rs 2,175 apiece earlier. This implies a downside of 20% from the current market price.

The global brokerage expects IndiaMart to report softer net adds in Q4, led by higher-than-expected churn with overall collections growth to slow down. The combined impact of all these things may lead to a slower year-on-year standalone and consolidated growth of 18% in the fourth quarter, an April 1 note said.

The brokerage sees the near-term impact on growth as the company looks to defocus on a monthly plan. But, the better margin on lower opex will aid overall growth, it said.

"Given sustained higher churn, the overall net adds continue to remain weak. We see limited visibility on how to arrest chum. Furthermore, lower collections growth is likely expected to impact revenue growth for FY25."

Shares of IndiaMart fell as much as 4.59%, before paring loss to trade 2.79% lower at 11:06 a.m., compared to a 0.14% decline in the benchmark Nifty 50.

The stock has risen 5.08% in the past 12 months. Total traded volume so far in the day stood at 3.8 times its 30-day average. The relative strength index was at 49.2.

Of the 24 analysts tracking the company, 17 have a 'buy' rating, two recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The average 12-month analysts' price targets implies a potential upside of 21.7%.