IndiaMART to step up tech investments over two years after strong Q3: CEO Dinesh Agarwal
“This age artificial intelligence developments. We started investing heavily in automation tools at the beginning of the year [FY25] Dinesh Agarwal, founder and chief executive officer of IndiaMART InterMESH, said in an interview: He did not disclose the proposed investment figures.
The company currently has tools for operational efficiency, including a feature that facilitates operational efficiency. AI-powered smart answersanalytics and personalized multilingual search for product categories. Agarwal said a new feature that uses artificial intelligence to match buyers and sellers based on metrics such as product, quantity and location will be at the center of IndiaMART’s technology investments.
The Noida-based company reported a 56% year-on-year increase in profit after tax. ₹188 crore gives it new firepower to push forward a more aggressive technology-led growth play. Revenue from operations increased ₹402 crore ₹354 crore in the same period of the previous year.
“The company had a stable quarter supported by improved inquiry quality, steady customer engagement and strong performance from high-value customer segments,” brokerage firm Centrum said in a Jan. 20 note. he said.
Agarwal sees no short-term reduction in headcount or other costs associated with increased technology investments.
“Given the size of the company, the overall investment figure may seem very small, but we are focused on spending time and money to raise it. We do not see any reduction in costs at the moment, but the expectation is that a longer period will provide an opportunity to reduce costs. Next year will be important for us.”
According to Agarwal, the company also hopes that the increased focus will bear fruit in terms of improving operational efficiency, providing better quality leads and increasing supplier retention rates.
Growing competition
IndiaMART’s strategy change comes as competition in B2B e-commerce space is condensing. Markets that include Flipkart’s wholesale division and venture capital-funded companies like Infra. The market is accelerating efforts to capture demand from small and medium-sized businesses. Pricing pressure, high customer acquisition costs and evolving service offerings are forcing incumbents to invest more in technology, sales and retention to maintain market share.
However, Agarwal does not seem worried about the competition.
“Different players have developed different muscles, so there is no cause for concern,” he said.
According to Agarwal, the company is constantly looking for new growth avenues and gig commerce is now on its radar.
“We are open to partnerships with suitable last-mile logistics players who can make deliveries faster for corporate customers,” he said.
E-commerce companies that cater to corporate customers and retailers are increasing their ability to shorten delivery times, hoping that same-day and next-day deliveries will improve the purchasing experience and lead to improved cash flow in the supply chain. Mint reported in July.
“While short-term supplier additions remain moderate due to pricing actions and seasonality, management expects a gradual recovery as product enhancements, AI-led initiatives and better lead engagement translate into better retention and monetization,” Centrum said. he said.
The company was founded by IIT Delhi graduate Dinesh Agarwal and his brother Brijesh Agrawal in 1996, long before India’s internet economy took shape. At that time, Indian businesses, especially small manufacturers and traders, relied heavily on physical guides, brokers and informal networks to reach buyers.
The company grew without needing major external financing for much of its early journey, focusing instead on cash flows from paid listings and subscriptions. Institutional investors then stepped in as the platform grew and generated predictable revenue.
Over the years, the company has raised capital from investors. Intel Capital and Amadeus Capital Partners, which provides resources to advance technology, data capabilities and nationwide reach. Last week, Nalanda India Equity Fund bought shares worth . ₹236 crore was raised through a bulk settlement on the BSE, causing IndiaMART shares to rise almost 8% on January 16.
Expanding towards the south
While IndiaMART is largely present in the north, including Gujarat, National Capital Region and Uttar Pradesh, it is trying to consolidate its position in southern regions with emphasis on Bengaluru and Hyderabad.
“Many southern markets are yet to be explored. We are working to deepen our presence there,” Agarwal said. Agarwal said, adding that there is a higher concentration of established, export-oriented small and medium-sized enterprises with long-standing supplier relationships in the region.
Highlighting the meaningful results of 13 strategic investments and two acquisitions, including the acquisition of accounting platform Busy Infotech in January 2022 ₹500-crore IndiaMART is preparing its acquisition pipeline keeping technology in mind.
“Busy Infotech started off contributing 5% of our revenue and now accounts for around 8-9%. We expect this to grow to 10% next year,” Agarwal said.
Shares of IndiaMART increased by 6 percent ₹2,270 on NSE on Wednesday.
