Indiamart Inter. (INDIAMART)

FairStock Score: 78/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• High profitability: ROE of 27.69% and ROCE of 34.24%
• Near-zero debt with D/E of 0.01
• Consistent growth: 5-year revenue CAGR of 15.68% and profit growth of 28.83%
• Strong financial health: Piotroski F-Score 8/9 and Altman Z-Score 3.13
• Promoter holding of 49.12% aligns interests with minority shareholders

Concerns

• Expensive valuation: price is far above Graham Number and DCF intrinsic value, with margin of safety at -135.92%
• Profit growth at 28.83% significantly outpacing revenue growth of 12.74% raises sustainability questions
• Free cash flow of ₹137 crore appears modest relative to the ₹12,811 crore market cap
• EV/EBITDA of 15.22 leaves little room for error if growth slows

AI Analysis

At ₹2,159.55, IndiaMART is not a stock I would rush to buy; the price expects a great deal from the future. The Graham Number is only ₹903.69 and the DCF intrinsic value is ₹1,219.36 — both far below the current quote. That gives a margin of safety of -135.92%, which is exactly the opposite of what Benjamin Graham taught us. So why pay attention? Because the business quality is real. Return on equity of 27.69% and ROCE of 34.24%, with a debt-to-equity ratio of just 0.01, point to a franchise that earns a lot without borrowing money. The Piotroski score of 8/9 and Altman Z-score of 3.13 add confidence to the balance sheet. Promoters own 49.12%, so their money is on the same side as mine. Revenue has compounded at 15.68% over five years; the latest sales growth is 12.74% and profit is up 28.83%. The latest quarter shows sales of ₹402 crore and net profit of ₹188 crore. That profit lever is impressive, but profits growing much faster than revenue is a yellow flag. It can come from cost discipline or one-time gains, and durable compounding needs revenue to carry the load. Free cash flow is ₹137 crore, so I want to see cash conversion catch up with reported earnings. Dividend yield is 1.41%, a modest return for waiting. Graham said price is what you pay, value is what you get. At ₹2,159.55, the market is paying a high multiple and I have no margin of safety. This is a Stalwart: a high-quality, steadily growing business with exceptional returns, but not a buy at this price. I would keep it on the watch list and wait for either a lower price near intrinsic value, or enough growth to make the valuation reasonable.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer