Another exit :
Things are getting interesting indeed.
Disc : Invested in Core holdings…
Just one question. What do you think are the reason that it took them 20 years to breakeven?
Alibaba took 3 years.
Thank You.
IndiaMart tried many business model and finally they settled with current one.
So they spent several years in this experiment.
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Yeah I am aware of that.
- Export oriented Search WebPortal for Indian suppliers.(1998-2002)
- Telephonic model to match buyers and sellers. ( similar to the Just dial ) (2003-2007)
3.The current business model. (2009 -2010)
So you see this as risk going forward? and again even for current business model it took almost 8 years.
This is all I have gathered from various articles and interviews. Not sure about the exact time periods.
If anyone has clarity and evidences that the current model does have some advantages which would make it last?
Thank You.
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Profits more than doubles in 1Q20. Collection weak due to lockdown (obvious from CFO) but should improve going forward.
Don’t think looking at Revenues/EBITDA/profits is meaningful here as Indiamart has a subscription based revenues model. They can recognize as much revenues as they wish without actually having customers pay for it.
I would cautiously look at cash flows (CFO/collections) which would follow these expected Revenues.
Views invited!
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Fair point. That is why I highlighted collections were weak in 1Q20 due to COVID 19.
But please note they dont randomly report revenues. If that was the case they would not have a cash balance of 900crs plus and fcf positive operations. You cant extrapolate weak cash flow of one quarter while ignoring past so many qtrs of data
I agree they have done phenomenally well in the past.
We should check their accounting policy on revenue recognition to understand difference between “Real” revenues vs reported. If that different is large, that’s a red flag to me.
You might first want to understand the business model before commenting on red flags. Subscription revenue recognition accounting is different (eg: the business of Mahindra Holidays). In case you are interested, read the annual report or watch past management interviews. They have been very clear in communicating what are the different business levers.
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The company collects money upfront whether its 1 monthly, yearly or multi yearly subscription.
So its a negative working capital company. People pay b4 they use.
Accion frontier mauritius sold shares worth Rs 40 cr
Indiamarts traffic is around 66 million hits in July up from around 48 million in January (prelockdown). Demand side looking good and subscription churn seems to be already over as indicated by the management in their concall. A forward PE ratio (excluding cash of around 900 crore reduced from marketcap) of around 25-26 taking into account Q1 results sounds reasonably valued despite going up in the recent run. I expect topline doubling in next 4-5 years (17-19 percent CAGR) taking into past trends and a gradual shift in the use of technology by smaller businesses.
Disclosure - Invested.
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Should one be concerned about continuous selling by director (though small quantities)? Have seen such small selling in other companies over the years.
EDIT: Corrected director / promoter to director.
There are two ways to look at it 
- Yes, one need to be concerned when Promoters are selling. It really raises eyebrows & is not taken positively in the market.
- No, Promoters have slogged for years to bring the company at this stage. Its time for them to take some money out & have for themselves. Small quantities is okay. However, if it becomes a regular phenomenon in future then it is a concern for sure.
Promoters are not selling here.
Disc : Invested in my core portfolio.
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There are many ways for Promoter to raise money. One way is by pledging shares if they are confident of the value and growth that lies ahead.
I would highly recommend not to use board of directors / promoters in the same sentence. How involved are the board of directors with the company? What is their understanding / view of the industry, it’s growth rates, competition, etc is all very difficult to understand? What personal reasons might they have for selling? I would neither be bothered by their selling or even buying!
Having said that, I don’t see the promoter selling even a single share on BSE.
@rahulchauhan007 - Can you share the source of promoter selling? If not, you’re answering a hypothetical question.
Disc: Invested
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I stand corrected Promoters are not selling.
People selling are mostly the one’s who got the ESOP’s and are cashing out.
Note : Edit made in above post as well. Thank You.
Disc : Invested in core portfolio.
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