Why Did IndiaMART Report Lower Profit Despite Higher Revenue in Q2 FY26?
IndiaMART InterMESH, India’s leading B2B e-commerce marketplace, reported mixed Q2 FY26 results with steady revenue growth offset by lower profitability. The platform continues to benefit from digital adoption among SMEs but faced short-term cost pressures linked to technology investments and marketing spends.
For the September 2025 quarter, IndiaMART reported a net profit of ₹83 crore, marking a sharp 38.8% YoY decline from ₹135 crore. Revenue increased 12.5% YoY to ₹391 crore, supported by steady subscriber additions and improved renewal rates. However, EBITDA slipped 3.4% YoY to ₹130 crore, reflecting higher employee and tech costs.
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IndiaMART’s operating margin declined to 33.2% from 38.7% last year due to rising marketing expenditure and employee expansion across growth initiatives. Management highlighted that user engagement and transaction-level conversions continue to improve, supported by enhancements in platform functionality and buyer-seller integration tools.
Subscription revenue grew steadily, driven by higher customer retention and new SME onboarding. However, the moderation in profit indicates ongoing reinvestment in product development, AI integration, and automation aimed at long-term scalability. Analysts expect margins to recover gradually from FY27 as growth-related investments stabilize.
The company’s paid supplier base continues to expand, with sustained growth from Tier-2 and Tier-3 cities. While ad spends and digital campaigns impacted near-term profitability, they are expected to strengthen brand recall and competitive positioning in India’s fragmented B2B ecosystem.
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Looking ahead, IndiaMART’s strong balance sheet and expanding customer base position it well to capture long-term opportunities in SME digitization. With continued innovation and focus on monetization, the company aims to maintain sustainable growth even amid short-term profitability pressures.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that IndiaMART’s Q2 FY26 results highlight long-term structural strength but near-term margin compression. Investors may consider accumulating gradually on dips, focusing on the company’s innovation-led digital moat.
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Related Queries on Company Performance
- Why Did IndiaMART’s Profit Decline in Q2 FY26?
- What Are the Key Drivers of IndiaMART’s Revenue Growth?
- How Will IndiaMART Improve Margins in Upcoming Quarters?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
