Indiamart Inter. Q1 FY27 Results (NSE: INDIAMART)
Signal: Margin pressure
The read
Revenue growth decelerated to 11.4% YoY (from 12.4% in Q4FY26), the 6th straight quarter of sub-14% growth. Operating margin contracted 200bps YoY to 59.4% — the 4th consecutive quarter of YoY margin contraction — as other expenses (marketing/tech) grew 21% YoY, far outpacing revenue. PAT growth of 12.2% was entirely supported by other income (₹107 Cr, 15.5% of revenue) narrowing the core operational drag. The accounting software segment, while growing rapidly, remains unprofitable.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹414.4 Cr | 11.4% | 2.5% |
| EBIT | ₹246.3 Cr | 13.0% | |
| Net profit | ₹172.2 Cr | 12.2% | |
| EPS | ₹28.66 | 12.0% | |
| EBIT margin | 59.4% |
P&L walk
Revenue grew 11.4% YoY to ₹414 Cr, decelerating from +12.4% in the prior quarter, driven by Web & Related Services (+8.5%) and Accounting Software (+49.2%). EBITDA margin (OPM) contracted 200bps YoY to 59.4% as employee costs grew 8.1% (vs revenue 11.4%) but other expenses surged 21.0% YoY, outpacing revenue growth. Other income of ₹107 Cr (+15.5%) and lower finance costs helped PAT grow 12.2% to ₹172 Cr. Share of loss in associates widened to ₹14.6 Cr from ₹14.1 Cr YoY.
Segments
Web & Related Services remains the growth and profit driver: revenue ₹3,759 million (+8.5% YoY), segment result ₹1,492 million (+11.3% YoY). Accounting Software Services is high-growth (+49.2% YoY) but loss-making (segment loss ₹27 million vs loss ₹6 million in Q1FY26), dragging consolidated profits.
Key positives
- Accounting Software Services revenue surged 49.2% YoY to ₹385 million, now 9.3% of total revenue, diversifying the business model.
- Employee costs grew at 8.1% YoY, below revenue growth of 11.4%, indicating some cost discipline on headcount.
- PAT grew 12.2% YoY to ₹1,722 million, with basic EPS of ₹28.66 (+12.0% YoY).
- Other income of ₹1,067 million (+15.5% YoY) provided a steady earnings buffer, representing 25.7% of total income.
Key concerns
- Operating margin contracted 200bps YoY to 59.4%, the 4th consecutive quarter of YoY margin decline (from 61.4% in Q1FY26).
- Other expenses grew 21.0% YoY to ₹939 million, far outpacing 11.4% revenue growth, suggesting aggressive marketing/tech spending.
- Accounting Software Services remains loss-making, with segment loss widening to ₹27 million from ₹6 million a year ago.
- Share of loss in associates increased to ₹146 million (vs ₹141 million YoY), with 7 associates posting cumulative losses.
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