Indiamart Intermesh Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Abhishek Bhandari - Nomura - Analyst : Sir, I just had this question on surprise subscriber, paying subscriber number minus 3.7%. No, even in the worst of the last few quarters, you were at a positive number of around 2,000-odd. So what surprised you negatively? And do you think -- by when do you think we'll again go back to a positive number if at all? And sustaining this collection could rate in double digit, is it possible sans the net subscriber addition for you?

Question: Abhishek Bhandari - Nomura - Analyst : And sir, my question on whether you can sustain this double-digit customer collection growth in the fact that addition is negative?

Question: Nikhil Choudhary - Nuvama Group - Analyst : My question is on collection growth remaining below 10%. Last quarter, we highlighted there were some existing challenges, right? And that basically impacted your collection growth line, but still collection growth remained below 10%, and you're also guiding less than 10%. So I just wanted to get some color on what's happening? And is the impact of execution challenges continue to remain?

Question: Nikhil Choudhary - Nuvama Group - Analyst : Sure, sir. Second one, just want to understand your thinking behind it. So we have been trying to improve or reduce the churn basically during the last five to six quarters, right? We have made various initiatives, including changing the matchmaking, enabling overall easier contact between the seller, plugging WhatsApp is now available on your website, in your app. So just want to understand, despite so much initiative, if we are seeing the elevated churn continue to remain a problem, why don't we fundamentally think that elevated churn is now maybe a base case and we should focus on gross addition rather than cutting our sales and marketing, which is impacting our growth further.

Question: Nikhil Choudhary - Nuvama Group - Analyst : Sure, sir. Makes sense. The last one, if I can squeeze in, is on your buyer side. So we have seen a decent improvement in metrics, both on LTM active buyer as well as unique -- daily unique business inquiry, right? Any color, any initiatives you have taken which is resulting that? And just some color out there.

Question: Swapnil Potdukhe - JM Financial Ltd. - Analyst : So I had two questions. The first one is, see, we have been seeing this churn-related issues since the time we increased our pricing on the silver category, right, the last year, sometime in May. And that is when we have been seeing this kind of high-churn rates, especially in the silver category and that has sustained. Have we considered going back to a previous pricing, trying out something different rather than just saying that this is low -- the low margin growth and it may not get converted into upsells going ahead. But just for the time being, just going back to the previous pricing and -- or just to bring something new to the table rather than -- I'm just coming from that thought process if you can just --

Question: Swapnil Potdukhe - JM Financial Ltd. - Analyst : The second question is with respect to your categories which are getting impacted in a meaningful way. Now there has been some spending-related slower on especially government spend not increasing in a meaningful way. Are there any specific categories that are getting impacted? And a part of the problem could be this macro challenges rather than just on the churn side, I mean just trying to extrapolate a few things. Plus, sorry, just to conclude that point, and if yes if that is the thing, have you started working the thought process from a vertical perspective, right, focusing on certain categories where opportunities can be big even today, right, despite the kind of penetration could have happened and rather focus on those categories far more than those categories where chances of incremental supply growth could be lower? Have you thought of those lines also?

Question: Swapnil Potdukhe - JM Financial Ltd. - Analyst : Just to get that point a bit more, have you started hiring a specific vertical focused employees who can better you extract value for you within certain categories? I mean, is that the thought question? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 11:30AM, INMR.NS - Q3 2025 Indiamart Intermesh Ltd Earnings Call

Question: Anmol Garg - DAM Capital Advisors Limited - Analyst : A couple of things from my end. Firstly, if you can indicate that are we planning to change anything in our customer actuation strategy and what do you think is not working? Is it the channel partners or the customer acquisitions through our own employees if you can share a bit of light on that?

Question: Anmol Garg - DAM Capital Advisors Limited - Analyst : Right. Just on the continuation of the same, are we also planning somewhere to change the payout structures for our channel partners or for our sales employees who are bringing in more quality-based customers to us where the churn might be lower for those particular customers?

Question: Anmol Garg - DAM Capital Advisors Limited - Analyst : Secondly, I wanted to understand if we intend to acquire majority stake in any of the invested companies. The basis of this question is just wanted to understand if we are also looking to enter full fledgedly into any of the newer businesses which we have acquired or in associated manner.

Question: Anmol Garg - DAM Capital Advisors Limited - Analyst : Understood. And just one last thing from my end. Are we somewhere planning to enter into the e-commerce -- B2B commerce business as well? And are we seeing any kind of competition from that particular set of companies right now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 11:30AM, INMR.NS - Q3 2025 Indiamart Intermesh Ltd Earnings Call

Question: Amit Chandra - HDFC Securities - Analyst : So sir, in terms of the trend that we're seeing, in terms of the divergent trend in terms of the pressure that we're seeing on the field supplies and the increase in the ARPU, that actually suggests a very simple trend I'm trying to understand. I suggest that the lower end of the pyramid is notable to derive value from the platform, whereas the higher end or the top paying suppliers are able to derive much better value from the platform. And the ARPU's increasing is like adjusting that. And also, people are moving from a little over plan to hire a plan. So what explains this divergence? And is it going to continue in this manner for a while? Obviously, you have explained it in a different form. But just from the relevance of the platform for the lower end, is it you need some kind of more innovation there? Or the platform has to be -- in terms of offerings has to be let be considered in terms of what we're offering to the lower end? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 11:30AM, INMR.NS - Q3 2025 Indiamart Intermesh Ltd Earnings Call

Question: Amit Chandra - HDFC Securities - Analyst : Okay. And sir, lastly, on the collections. Obviously, we had the collections better than we did last quarter, but considering 4Q is the more important quarter for us in terms of collections. So how is the progress for 4Q because if I take at least 10% Y-o-Y growth also for 4Q, then also we are hitting, say, 9% to 10% growth for the full year. So the full year -- the collections growth is still let muted because like what happened in the first half. So still the ask rate for that is still high for the fourth quarter. So what you would like to suggest what is happening until now? And what kind of collections we can see for the fourth quarter?

Question: Amit Chandra - HDFC Securities - Analyst : So let's put it simply. So collections of INR500 crore or more in fourth quarter requires some fix? Or is it achievable at the current status? .

Question: Rahul Jain - Dolat Capital - Analyst : I just wanted to understand that what are the initiatives we are undertaking to ensure that full improvement trend continues to trend faster than the usual base, so that we could mitigate the medium-term challenges on the subscriber and any which way the subscriber adds during a year one REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 21, 2025 / 11:30AM, INMR.NS - Q3 2025 Indiamart Intermesh Ltd Earnings Call contribute very small portion of total incremental revenue. So is it possible to mitigate that by ensuring much better outcome from digitally savvy suppliers that we have to get to the aspired growth wage?

Question: Rahul Jain - Dolat Capital - Analyst : Yeah, Dinesh-ji, just a slight clarification, the last part of your response. So you're saying if we continue on this , we can mitigate the situation of a weak revenue performance. And there was another comment which you made earlier that for time being 10% benchmark for collection growth is a good number to look at it. So can you just clarify on these two parts?

Question: Rahul Jain - Dolat Capital - Analyst : Yeah, right. Only one part, which we missed, is that are we doing anything new? Of course, you said you've been doing a lot of things there, but is there anything newer initiative that we have taken, given that digital adoption in general is much better? So are we seeing that behavior? Or are we trying to do far better keyword monetization or something like that? .