B2B ecommerce giant IndiaMART InterMESH reported a 39% year-on-year (YoY) decline in consolidated net profit to ₹82.7 crore for the second quarter of FY26 (Q2 FY26), compared to ₹134.5 crore in the same quarter last year. On a quarter-on-quarter (QoQ) basis, profit fell sharply by 47% from ₹151.3 crore in the previous quarter, mainly due to shrinking margins and a rise in operating expenses.
Despite the dip in profit, IndiaMART’s operating revenue grew 13% YoY and 5% QoQ to ₹391 crore during the September 2025 quarter. The increase was driven by continued growth in the company’s subscription-based services and rising demand from small and medium enterprises (SMEs) leveraging IndiaMART’s digital marketplace to reach new buyers and suppliers.
Margins Under Pressure as Expenses Surge
IndiaMART’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped 4% YoY to ₹130 crore in Q2 FY26, with the EBITDA margin standing at 33%, reflecting higher operational costs.
The company’s total expenses surged 21% YoY and 9% QoQ to ₹269.2 crore, driven by increased employee costs, marketing spends, and technology investments. IndiaMART has been aggressively expanding its product offerings and digital infrastructure to enhance user experience and retain its leadership in India’s B2B ecommerce sector. However, the increased expenditure has weighed on profitability.
Decline in Total Income Due to Lower Other Income
Including other income of ₹10.2 crore, IndiaMART’s total income for the quarter stood at ₹401.2 crore, marking a 3% YoY and 14% QoQ decline. The fall in total income was largely attributed to a reduction in “other income” compared to the previous quarters. In the same quarter last year and the preceding quarter, the company had booked higher returns from financial investments and interest income, which provided a boost to profits at that time.
IndiaMART’s Core Business and Market Outlook
Founded in 1996 by Dinesh Agarwal and Brijesh Agrawal, IndiaMART operates as India’s largest online B2B marketplace, connecting buyers and suppliers across industries. The platform enables businesses to discover products and services, compare pricing, and establish trade relationships seamlessly through digital channels.
IndiaMART primarily earns revenue through subscription fees paid by suppliers and manufacturers to list and promote their products on the platform. The company also generates additional income from value-added services and advertisements.
Despite the profit decline, IndiaMART continues to see strong demand from small businesses that are increasingly adopting digital tools for trade. The company’s focus remains on expanding its customer base, enhancing AI-driven matchmaking algorithms, and improving platform monetisation through new subscription tiers and enterprise solutions.
Looking Ahead
While rising expenses and margin compression have affected Q2 FY26 earnings, analysts believe IndiaMART’s long-term growth prospects remain solid given its dominant market position, strong brand recognition, and the ongoing digital transformation of India’s B2B sector.
As India’s SMEs continue to embrace online commerce, IndiaMART’s investments in technology, user engagement, and service expansion are expected to deliver sustainable revenue growth, even as the company works toward stabilising margins in the coming quarters.
In summary, IndiaMART’s Q2 FY26 results highlight a challenging quarter marked by profit pressure despite revenue growth, reflecting the balancing act between expansion spending and profitability in the evolving digital B2B landscape.
Leave a comment