Key highlights from IndiaMART InterMESH Ltd (INDIAMART) Q3 FY22 Earnings Concall
- INDIAMART during 3Q22 added 5,833 paying subscribers, to total the count at about 156,000. Business enquiries stood at 23 million, with the 90-day repeat buyers standing at about 55%. The company expects increasing adoption of Internet by business fueling the long-term growth of INDIAMART.
- Mihir Damania of Ambit Investment asked about the sharp drop on website hits and what impacted the hits and the steps taken to control it. Dinesh Chandra CEO said that historically in Q3, the company has 10% lower hits than 2Q. However, the company added that due to the second wave of pandemic there was a much higher traffic in Q2. The company believes it would stabilize back to 272 million odd visits per quarter.
- Mihir Damania of Ambit Investment asked about the company’s acquired business of Busy Infotech, and how different is it with Vyapar. Dinesh Chandra answered that Busy Infotech is an accounting software available on-premise. Busy is competing with the likes of Tally and Margs, appealing to small and big businesses. However, Vyapar is a cloud based SaaS product for businesses that are trying to do accounting on their own, a DIY kind of model, which appeals to micro and small businesses.
- Mihir Damania of Ambit Investment also enquired about the expected revenue and PAT for FY ’22 for the acquired Busy Infotech. Dinesh Chandra replied that Busy’s past typical revenue growth for the last 3-4 years has been within the range of 10-15% on a CAGR basis and PAT margins around 25%. The company added that after the acquisition is complete in the next 1-2 quarters, it expects to double these numbers from current levels.
- Kushagra Bhattar with Old Bridge Capital enquired about the increase of stake in Legistify and how this business is going to evolve in future. Dinesh Chandra replied that in the current round, the company has invested about INR7.5 crore into Legistify (litigation tracking and management software). It’s in the early stage with revenue of INR15 lakh/month with more than 100 customers. It’s more of a convertible; evaluation and things will be linked to the next fund raise.
- Pranav Kshatriya from Edelweiss asks about the flatting collection in Q3 and the customer churn. Dinesh Chandra CEO said the company saw about 24% growth in collection from customer and last quarter, the company did a similar number with a slightly higher percentage. However, INDIAMART recommends to look at collections on a YoY basis as it would have quarterly seasonal trends. On customer churn and growth, on a net basis, the company added 5,800 customers in 3Q, higher than previous quarters.
- Pranav Kshatriya from Edelweiss also asked on the cost side, how one should be looking at the cost going forward. Dinesh Chandra CEO commented that the increase in cost has been primarily in the manpower side. One is increase in headcount; added about 225 more employees in 3Q than 2Q. INDIAMART added that it is looking to continue building this manpower by about 100 employees every quarter. Second is the re-rating of salaries happening across the sector.
- Ajay Modi asked about the company’s investments whether it’s financial investments or strategic investments. Dinesh Chandra CEO answered that these are not purely financial investments but minority investments in the strategic spaces.
- Prateek Kumar of Antique Stockbroking, asked that some competitors mentioned about significant shift to monthly subscription in 3Q, and how INDIAMART thinks about the change in subscription mix. Dinesh Chandra CEO said that the company does that and sometimes it’s in the ratio of 60:40 and other times 40:60. In terms of current client mix, the company has only one-fourth customer of the total 160,000 customers, about 40,000 in silver monthly. All other are in annual or multi-year mode, more than 50%.
- Prateek Kumar of Antique Stockbroking also inquired if the company feels the need to increase its ad spend to accelerate growth. Dinesh Chandra CEO commented that the company’s traffic from the pre-COVID levels has grown from 60 million/month to about 90 million/month. Therefore, the digital adoption has done a 50% increase in term of traffic on an annual basis, which deters the need to increase ad spend.
- Manish Gupta with Solidarity Advisors queried when the company will start seeing more operating leverage in the model. Dinesh Chandra CEO said that taking the pre-COVID level, EBITDA margin was 26-28%. From that range, it has expanded to 38% in two years. Considering salary re-rating and weakened growth, for the next one year it will be stabilized at 38%. Post that if the growth is 20% and cost at 16%, INDIAMART will continue to see 1% per quarter margin expansion.
- Sumit from Kotak Securities asked if the company is losing market share and what’s the competitive intensity. Dinesh Chandra CEO answered that the company is not seeing any area where it’s losing market share or any competitive pressure.
- Sumit from Kotak Securities also enquired about the growth trajectory for the next 2-3 years. Dinesh Chandra answered that every nine-months if some kind of a lockdown or pandemic wave does not happen, the company should see somewhere between 20-30% growth rate.
Cochin Shipyard Limited (NSE:COCHINSHIP) Q4 FY22 Earnings Concall dated May. 26, 2022 Corporate Participants: Madhu S Nair -- Chairman & Managing Director Jose V J -- Director Finance Analysts: Vastupal Shah
Can you guess the name of the company that was listed during the IPO frenzy in 2020 and is the second largest player in the Indian municipal waste management industry?
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