IndiaMart InterMesh, an online B2B marketplace, reported an 81% year-on-year increase in consolidated net profit for the fourth quarter of the financial year 2024-2025, totaling 180.6 crore rupee (US$21.75 million).

It was attributed to revenue growth and improved EBITDA margins.

Revenue from operations for the quarter rose nearly 13% to 355.1 crore rupee (US$41.73 million), compared to 314.7 crore rupee (US$41.73 million) in Q4 FY24.

Sequentially, revenue remained stable at 354.3 crore rupee (US$41.61 million) from the previous quarter.

With other income, total revenue for Q4 FY25 reached 463.9 crore rupee (US$54.44 million), an increase from 391.9 crore rupee (US$45.99 million) in the year-ago quarter.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ B2B marketplace’s growth paradox: High profitability with supplier retention challenges

IndiaMART demonstrates a business paradox where financial performance and customer metrics are moving in opposite directions.

Despite reporting an 81% surge in profit 180.6 Cr rupee in Q4 FY25, the company faced significant supplier retention issues, losing 3,715 paying suppliers in the previous quarter alone 1.

This disconnect is evident in market reactions too. After Q3 results showed a 48% profit increase, IndiaMart’s share price dropped 10% to ₹2,064.10 as analysts raised concerns about customer additions and collections 2.

The company appears to be compensating for supplier losses by increasing revenue from existing customers, with Annualized Revenue Per Paying Supplier (ARPU) growing 14.33% year-over-year to ₹63,000 1.

This strategy has maintained revenue growth but created revenue concentration risk, as the top 10% of suppliers now account for 49% of total revenue while the top 1% contribute 17% 1.

2️⃣ B2B platform’s financial resilience despite growth headwinds

IndiaMART has demonstrated financial strength despite facing growth challenges in its supplier base.

The company’s deferred revenue reached ₹1,492 Crore in Q3 FY25, representing a 17% year-over-year increase and indicating strong future revenue visibility despite supplier churn issues 3.