Indiamart Intermesh Ltd

Joining us today from the management, we have Mr. Dinesh Agarwal - Chief Executive Officer, Mr. Brijesh Agrawal – Whole Time Director, Mr. Jitin Diwan - Chief Financial Officer, and Mr. Prateek Chandra - Chief Strategy Officer.

Before we begin, I would like to remind you that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to Slide #3 of the earnings presentation for the detailed disclosure.

Now I would like to hand over the call to Mr. Dinesh Agarwal for his opening remarks. Thank you, and over to you, sir.

IndiaMART has delivered a consolidated revenue from operations of Rs. 402 crores in the quarter 3, representing a year-on-year growth of 13%. Collections from customers grew to Rs. 426 crores, representing year-on-year growth of 17%.

Deferred revenue grew to Rs. 1,775 crores representing year- on-year growth of 19%. In quarter 3, unique business inquiries reached 28 million, growing 4% year-on-year, along with continued improvement in the quality of inquiries.

Total number of paying suppliers declined by 1 thousand to 2 lakh 21 thousand. This decrease can primarily be attributed to moderation in gross addition due to price increase we implemented in the silver subscription tier during the last quarter. Additionally, lesser number of working days due to festival season has also contributed to the decline.

Our Platinum and Gold customers, which constitute approximately 50% of our customer base, and more than 75% of the revenue continue to have good upsell and retention rate.

Page 3 of 18 Our company has always been an early adopter of new technologies. Nearly a decade ago, we introduced behavioural data based matchmaking, which was powered by AI and machine learning.

Today, we are accelerating that journey further. We are rapidly adopting AI-enabled technologies to enhance the quality of our product and platform, improve user experience and engagement for buyers and suppliers and reinforcing element of trust across the marketplace.

We remain committed to elevating quality standards and improving the user experience, to maximise the value offered by our platform.

Now I will hand over the call to Brijesh for update on Busy Infotech. Thank you, and over to you, Brijesh.

Good evening, everyone. At Busy, we've done a billing of Rs. 33 crores in Q3. The normalised year-on-year growth rate after removing the impact of the change in the payout structure for partners is at 28%. The revenue from operations was Rs. 32 crores, and the deferred revenue was at Rs. 112 crores at the end of Q3. This represents a growth rate of 50% and 56% on a normalised basis.

The cash flow from operations was Rs. 6 crores for the quarter.

During the quarter, Busy sold about 10 thousand new licenses, taking the total number of licenses sold to about 4 lakh 31 thousand.

As we have been sharing in the past calls, we continue to invest behind enhancing the overall product experience and growing the sales channels that we have, so that we can build the foundation for sustained high-growth business at Busy for years to come. Now with this, I'll hand it over to Jitin to discuss the financial comments.

Good evening, everyone. I'll take you through the financial performance for the quarter ending December 2025.

Consolidated Collection from customers was Rs. 426 crores in the quarter, representing Y-o-Y growth of 17%. IndiaMART's stand-alone Collection from customers for the quarter was Rs. 390 crores, registering Y-o-Y growth of 14%.

Consolidated Deferred revenue stood at Rs. 1,775 crores, an increase of 19% on a Y-o-Y basis.

Page 4 of 18 Consolidated revenue from operations was Rs. 402 crores, registering Y-o-Y growth of 13% and consolidated EBITDA was Rs. 134 crores, representing margin of 33%.

In Q3, Consolidated Other Income for the quarter stood at Rs. 135 crores. This includes onetime fair valuation gain of about Rs. 82 crores on account of revaluation of our strategic investment, Baldor Technologies.

Consolidated Net profit for the quarter was Rs. 188 crores.

Consolidated Cash generated from operations was Rs. 129 crores. Our Treasury balance stood at Rs. 3,051 crores as of December 31, 2025.

Thank you very much. Now we are ready to take any questions.

Question-and-Answer Session

We will now begin the Q&A session. If you wish to ask a question to the panellists, kindly raise your hand and allow camera and microphone access. Alternatively, you may type your questions on the Chatbox and we will revert on it. Please restrict to two questions so that we may be able to address questions from all the participants. We will wait for a few seconds, until the question queue assembles.

First question is from the line of Anmol Garg, from DAM Capital. Please unmute yourself and go ahead with your

Thanks for the opportunity. A couple of things. Firstly, I wanted to understand that it's been now a few quarters since our paid supplier numbers have remained kind of subdued. So from that perspective, how do you see it going ahead in terms of, do you think that somewhere the market is saturated for us? Or do you feel that we might have to kind of make changes to our business model in terms of introducing transaction-based aspects to our business model? Or do we kind of prefer to work on the classified+ model going ahead as well?

Do we feel market is saturated? No. Market has kind of unlimited demand for enough number of quality leads that can be converted by sellers. So there is a number of sellers willing to pay if they get leads, which can be converted by them.

Second, to attract more buyers, do we want to prefer moving to a fulfilment model? No. We would like to remain a software and tech-oriented company, with enablement embedded wherever it can, whether it is trust-related embedding, whether

Page 5 of 18 it is any kind of credit-related embedding, any kind of payment facilitation. But we ourselves do not intend to do any sourcing, or delivery, or return because the categories are enormous, and it is not feasible to go that way.

So, we are continuing to tune-in product market fit for buyers so that we can generate as many buyers as possible. As soon as that happens, I think we should be able to now get better supplier traction. Earlier, about 1.5 years back, I think there were problems with the quality of the inquiries also and there were problems with the competition also. I had addressed this in earlier quarterly calls, that now the competition side, the localised inquiry side, the quality of the inquiry, the intent of the inquiry, all of that is solved. Most of the suppliers are happy with the quality of the inquiries that they are getting. Now if we can double the inquiries, I am sure we can double the customer count from here.

Understood. Secondly, I wanted to understand that there is a slight reduction in our advertisement, SG&A spend in the quarter. So when would we move to Rs. 10 crores kind of quarterly spend in terms of the digital marketing spend?

Yes, we continue to do that. The little bit of a spend that you'll see, a reduction from Rs. 6 crores to Rs. 5.5 crores or so. That is because there was Diwali, Dussehra and we didn't want to run the ads on the holidays, there's no point running ads on the holidays, 25th was a holiday. So that's about it. And secondly, as we are running the ads, we are getting confident how to optimise for the cost. As far as the scaling goes, I think we are trying to find more and more keywords that can be targeted at the CPC, rates that we are willing to pay. So we are continuing to see that. Hopefully, this quarter, we should be seeing a little bit of uptick, but I can't comment when do we plan to spend 100% of that Rs. 10 crores budgeted every quarter.

Understood. And lastly, if I look at on a Y-o-Y basis, our total number of buyers have increased almost by 9-10%, while the unique business inquiries still remain kind of range bound. So whatever the spend that we are making on the advertisement side of things, it looks like that it's attracting more buyers, but the suppliers and the unique business inquiries for these suppliers kind of remains a range bound. So, do you think that maybe there would be a change in strategy in terms of the advertisement spend, which will cater towards more supplier additions?

No, these particular advertisements are mostly related to very transactional buyer requirement. So supplier advertising is

Page 6 of 18 mostly on the social media. So, YouTube, Instagram, Facebook, LinkedIn, you will find more supplier-oriented advertising. You will find more buyer oriented advertising where buyers are actually searching for products such as on Google. So both the channels are different for buyer advertising and supplier advertising. And in terms of registered buyers and unique business inquiries, there are seasonal factors, I think plus/minus 2-3% keeps on happening. I think I would be happy to keep focusing on the unique business inquiries.

Sure. Understood. And just a bookkeeping one. Is there any impact of new labour code on our business?

Yes. So we have impact of new labour code. We have taken an impact of about Rs. 8.5 crores in P&L. And after that, the net profit and EBITDA number which has come, is there.

So is this a onetime impact or is something...

That is right. This is a one-time impact. As mandated by ICAI, there was a onetime impact which was supposed to be taken in books. So we have created a liability and an expense of Rs. 8.5 crores, which is a one-time impact.

Next question is from the line of Prashant Kothari, from Pictet Asset Management. Please unmute yourself and go ahead with your question.

I wanted to understand about the unique inquiries. They are growing at a very healthy rate in the last two quarters, like 17%, 12% and suddenly, it has dropped to 4% growth Y-o-Y.

Is there any kind of one-off factors there? Or are we losing momentum despite our digital advertising initiatives?

I would call it mostly seasonal factors.

And can you explain what happened? Like what has changed seasonally out there?

What changed seasonally in terms of quarter 3 last year versus quarter 3 this year?

Yes, please.

Generally, speaking holidays here and there, sometimes just having one additional working day or two additional working days also happen. And from Q2 to Q3, it is always lower, if you see historically also. But even if you compare Q3 to Q3, you are right that it was growing at 14%, 15%, but now it has come

Page 7 of 18 down to 7%. Because in those holiday days, we didn't even advertise. So earlier in the Q1 and Q2, we advertise all the 90 days. In this particular quarter, we advertised only for 75 - 80 days. That's why you see the advertising expense also lower by Rs. 50 lakhs or so.

Okay. Okay, sir. And how the churn levels are now?

The churn levels continue to be same. There is not much change that we see. So if you remember, we started doing these changes in the product side, especially supplier side product changes that we started doing some time around November, December, January, February, March. So I'm expecting that any annual display of the churn would be available sometime around April, May, June, not before that.

Okay. And just I noticed that you stopped reporting the total traffic data. Was it just an omission or is this planned ?

I guess I mentioned it last time also because currently, the bot traffic is coming from everywhere. Whether it is ChatGPT bot.

And there are hundreds of LLM bots now, search engine bots, new browser bots, agentic bots. So in the traffic, when trying to identify the actual human traffic versus bot traffic, it was years of Google being monopoly, that systems have become stable enough to identify what is a bot traffic and what is not.

Nowadays, there is so many new crawlers are coming like this Parallel Web, Exa, those kind of things. So I guess this traffic is moving very radically and that's why and I told you last time also that we should be removing it, so we removed it.

Okay. And one last question, when do you think you will feel confident to accelerate on the addition of new paid suppliers?

I am not able to comment on that. I think I will continue to focus on providing better quality and better quantity. As soon as it starts to trend 2-3 quarters in one single direction, then you will see. However, if you see this particular quarter, we have reversed from a sub-10% collection growth over the last 4-5 quarters to about 13-14%. So I think there's some positive that I can see, but has that resulted dramatically into any kind of churn parameters? And until the churn parameters become better, I'm not in a position to even invest dramatically on the gross addition.

Next question is from the line of Anirudh Shetty, from Solidarity Investments. Please unmute yourself and go ahead with your question.

Thank you for the opportunity. So just a few questions. I would like you to comment on the ARPU growth company level and for the top 10% customers just over the last three quarters or so, it seems that the pace of growth has seen a bit of a slowdown in Q1 FY 2026, it was 9% growth, 7% last quarter. It's come down to 6%, similar trend for top 10% of customers. And you mentioned you will have taken a price hike. So if you can just share more colour on what's happening over there?

I have always guided to 6-8% on the ARPU and top 10% ARPU at 9-11%, and that is how it is going. Yes, there could be certain periods, when the customer count was not growing at all then the ARPU growth was higher. So ARPU growth is now coming in line to the long-term trend of 6-8%. I don't think anything different was told.

Got it. And our collection growth has been quite strong. It's been 14%, well ahead of what we are getting in terms of revenue. So is there something, what has been the delta over here in terms of what explains why collection growth has been faster than, say, ARPUs and our revenue growth overall? So this is like a good normalised growth rate to expect?

Yeah. So if you see the revenue side of it, you will be able to multiply the customer growth and ARPU growth. But on the collection, collection is a leading indicator where collections grew first and then they will go to deferred revenue and then they will go through the revenue. So that's how they will reconcile. We actually internally maintained two metrics. One is average collection per customer and average revenue per customer. So we are able to understand what is the collection growth.

Got it. And just one final question. The net adds, so essentially, just to understand it more clearly, you mentioned that the churn levels have not changed vis-a-vis the past. So essentially, the gross adds in this quarter, will you be able to quantify what would that be?

As I said at end of last quarter, last quarter means end of September. In the month of September, we had taken a price increase. October, November, December was the first full quarter where the price increase was effective. Even in January, February, March, we are probably recovering. So I think gross additions should be coming to natural numbers sometime around April, May, June. So one more quarter of maybe plus/minus 0 customer addition you can expect.

Page 9 of 18 Next question is from the line of Nikhil Choudhary from Nuvama. Please unmute yourself and go ahead with your

Thanks for the opportunity. First question on gross addition side. Sir, you mentioned in your remark on one earlier question, that there are enough supplier to target, right? If we have so much large supplier base which we can target, then why gross addition will get impacted despite of price hike? We should be able to get higher gross addition if you want to, right?

Yeah. We will be able to get, it's just that every time you change some Rs. 500, Rs. 1,000 price, the sales team takes a little time to adjust to it. There's no problem theoretically.

Got it. Second thing on this standalone collection growth. So you see standalone collection growth increased to 14% compared to 8-10%, what we have been seeing since last few quarters. How sustainable this mid-teen growth is? And what led to this acceleration from last quarter?

So as I said, to some extent, I think the better gold and platinum monetisation led to some better average collection per customer. So maybe half a percent recovery on the renewal rate and better collection. However, at least, let it repeat for 1 or 2 quarters, and then we can say that this is a trend.

Otherwise, for a one-off 14%, I think let's not become very happy about it. But I think we are cautious. We are targeting even JFM quarter to be similar, but let's see.

Got it. Your comment about this higher renewal area, does that mean that we saw lower churn in gold and platinum this time compared to previous quarter?

So as I said, it is too little to quantify.

Got it. Just last one from my side. You made a comment that we might see lower churn from April, May, June, what gives you confidence? Is there some behaviour you are noticing in annual supplier, maybe they are more active on the platform, they are consuming more lead? And second, are you seeing some, let's say change in churn, especially for silver monthly? Is there some activity there?

So monthly is still not recovering, because I think there are two separate behaviour that we found. Why somebody takes monthly and why somebody takes annual. So one, obviously, somebody takes a monthly because of the affordability reason

Page 10 of 18 that he himself has a cash flow problem and wants to pay monthly.

And the second is he wants to try the platform and he has not made up his mind that, okay, Internet, I want to jump in.

However, somebody who comes in with annual subscription of Rs. 32,000, one, he doesn't have that kind of a cash flow problem. And secondly, he has made up his mind that he want to try definitely an annual.

So in the annual, the churn rates are always a few percentage points lower than the monthly. So we are hoping that the annual retentions would improve a little bit. But in the monthly, we have not seen any respite. If we have seen, I would have given you indicator that okay monthly is improving, so will annual improve.

So we have a question from the chat menu. The question is from Mr. Devang Patel. At the margin, some of the buyer traffic is moving from Google search to AI search. Given our predominant reliance on Google search for traffic, how do we see this as a longer-term threat to our business model and what are the measures have we taken to tackle it?

Two, three things. One, every time a newer technology and more pervasive and more useful technology comes, it overall improves the TAM, it means if earlier, X number of people were only using Google, now the total number of people that will use either Google or Gemini or ChatGPT would be higher than X. So it actually expands the TAM anyway.

Now many different publisher companies are facing a stagnation in growth of traffic coming from places like Google.

More so where there is a lot more research required, I have heard stories around where there is more research required, people do go to AI search. However, where there is a transactional unique content discovery, people continue to go to the search.

Having said that, if you go to a Google Gemini or if you go to a Grok, IndiaMART features well even in those searches.

However, currently, those are not giving directly blue links, but they are giving like a reference within the answer, they are giving a reference that this answer has come from here. So we are getting links, but this is a general problem. I think we need to rely more on our repeat traffic. And that's what we are working towards. Currently, our repeat traffics are running almost all-time high at 58-59%, repeat inquiries.

Page 11 of 18 Next question is from the line of Swapnil from JM Financial.

Please unmute yourself and go ahead with your question.

I have two or three questions. The first one is, can you just quantify the increase in silver category pricing that you have been mentioning? What was it early or and what is the latest pricing that you're offering to the suppliers?

Earlier, it was Rs. 3,000 plus tax on a monthly basis. And Rs. 28,500 plus tax on an annual basis. Now it is Rs. 4,000 plus tax on a monthly basis. And currently is Rs. 35,000, but currently, we are giving some discount of Rs. 3,000. So it is Rs. 35,000 minus discount running of Rs. 3,000, so its Rs. 32,000 plus tax on an annual basis.

Got it. My follow-up question to that is like given the quantum of increase is quite steep. Do you have to think it was the right time to take this price hike especially at a time when we have not been able to get the proper control over churn rates?

I mean we, as a company, have taken this decision after enough discussion and enough pros and cons. So we obviously think that it was the right time after many, many years. And we also discussed that whether we should go from Rs. 3,000 to Rs. 3,500 and then Rs. 4,000. But given the size of the sales team and the amount of time it takes to absorb and we did a lot of survey in the market. Most people said it didn't matter to them whether it was Rs. 3,000 or Rs. 4,000. People said what matters is either it works or it didn't work.

So I think, yes, you are right, some fence sitters might actually churn out because of that. But in general, those fence sitters anyway will churn out one month later. So it was well discussed and debated step taken by us. So I mean, I'm not sure whether it is right or wrong. I mean it's a very subjective decision to say whether it is right or wrong.

I mean, can you help us understand how the churn rates would have moved from previous quarter to this quarter because this was the first quarter of full price hikes and especially for the silver category? So was there a slight increase?

It doesn't apply to renewals. Renewals continue to happen at previous prices, only the next time renewal will come, they will come at the newer prices. So if somebody had taken a Rs. 2,500 monthly subscription and continues to run. He is still running at Rs. 2,500 a month. So either somebody breaks a subscription in between, then comes back that's when the new prices apply or

Page 12 of 18 if somebody is on the annual subscription, where next year subscription will come, that's when his new prices will apply.

So will it be fair to say that the full impact of the price hikes, right or wrong, we will get to know maybe six to nine months later, that is when we will be in actual position to understand whether it worked or?

Yes.

Okay. Now coming to, I mean you have said in the past that one of the challenges in increasing the suppliers was the quality of business inquiries that these suppliers used to get and some of them were not happy that led to some incremental churn. But do you think the way our sales teams approach the suppliers there could be some improvements needed on that side also. I mean I've done some analysis on that side. I mean the way our pitch would be to the suppliers and require change?

Obviously, there is also some improvement possibilities, when it comes to sales, yes, better qualification, better presentation, better convincing help. When it comes to servicing and churn, more enablement, better CRM, better training also helps. And we continue to work on both sides, as I admitted five quarters ago, that until 4-5 quarters, we were actually thinking that it is purely and purely sales and service execution problem.

However, I myself went to the customer meetings and now I have met almost 100 customers myself. There were small and small things that customers were worried about they were getting irritated about.

And we found few errors also. There were few blind spots in our product because something which was working, working for a long period of time, we tightened. So I think it has helped us. And now when I go and see and when we see the leading indicators, I think our engagement levels have improved, the buylead sold ratio has improved, the irrelevancy feedback has improved. So many of those have improved.

Nowadays, more complaint is how do I get more inquiries? I'm unable to cash this buylead. So that gives me some confident that there was some problems. But yes, sales and service can be definitely improved and AI is now helping us put the CRM context. And so we are trying to find if we can use help of some Copilot on the servicing side, where the AI can suggest the action of a meeting or action of the call. So I think those are the things that will help us improve the sales, apart from training and training. How do I enable a normal sales person because having said that, we will do training, it's still a high

Page 13 of 18 attrition role, field sales and servicing, telesales and servicing is a high attrition role across the industry.

But my question actually was slightly on the side, like have you considered any changes on the top management side, people leading the sales vertical, from that side, I mean is that a solution to the problem?

No, I don't think so. I mean if you look at our leadership team, for the last 15 years, they have done a great job and even in this particular quarter, I think. So I think we have a very good team, and I would encourage any of you to meet our leadership team at different places, regional teams. And there is some performance level rotation, job rotation and churn that continues to happen even at that level. So we do take action in certain particular locations or when certain particular verticals are not performing well. But if you are suggesting that a lot of churn at the top level in the business, I don't think that is the problem.

Next question is from the line of Amit Chandra from HDFC Securities. Please unmute yourself and go ahead with your

Most of questions have been answered. But just to get a clarity.

You mentioned about the addition thing has been stable, but despite of that, we have seen the increase in the collections, which was pretty strong. So is it that the existing customers are opting for more like multiyear packages and expanding their existing packages to move from the regional to more wider packages? So that is also leading to kind of collections growth despite the additions being muted? So this is one.

And then also in terms of the ARPU, is it now that company is getting tuned to more like milking the existing customers or enhancing the value for the existing customers only? Or how to see the overall strategy here?

Yes. So as I said in the earlier answer also, the 13-14% collection growth is obviously the number of customers multiplied by the average collection for customer. Now within that, it's everything small, small that works together at certain places, it is a higher upsell. In certain places, it is the higher multiyear renewal. At certain places, the renewal itself has improved in the gold and platinum.

Now coming to your second question, whether we are tuned to higher ARPU, these two go hand-in-hand. If you want to target a 20% plus growth rate ideally speaking, the company should

Page 14 of 18 target 10% coming from customer addition and 10% coming from ARPU addition. I mean it could go from 5-15%, but I'm saying anywhere between, if you want to get all of the growth coming from ARPUs, it might get difficult. If you want our all of the growth coming from customer addition, it might be difficult.

The second part is that each segment plays a different role at IndiaMART. The Silver customer brings the buyer side leadership because it gives you the availability of everything and anything on IndiaMART. So that's how you can say ‘kaam yahi banta hai’ or any product is available or cheapest prices available. While the ARPU growth at the Platinum side, which drives the ARPU growth, that brings all the profitability. So if you just leave one lever, either you will lose on the top line or your lose on the bottom line. So we have to balance in the long run, both of them. We can't leave it on one side.

And in some of the calls, you mentioned that change in attrition in the Silver monthly or annual bucket might lead to increase in the collections. So is it fair to assume that, say, like if the attrition level comes to normalised level maybe in the next one or two quarters, maybe we can see 5-6% more increase in terms of the collections growth from the current 14% to maybe 17- 18%, which we were seeing two years back when the attrition was normalised? So is the maths still similar?

And the second question is that obviously, you mentioned about the sales thing that we have been trying to do and in terms of training. So apart from the sales, another very important aspect is the technology because from that, we have obviously, it is getting upgraded. But do you think that the platform needs a very severe upgrade in terms of way the things are handled in terms of business inquiries or in terms of the interaction it is having with the buyers and the sellers that upgrade?

There's a huge opportunity today in terms of upgrading the platform in many ways, whether it is user interface, whether it is user experience, whether it is multi-model, whether it is multilingual, whether it is instead of search, a chatbot. Also, I think earlier it was trust indicators which are mostly direct.

Now with AI, you can have a lot of indirect ways of creating internal trust score, preventing any kind of suspicious activity.

So I guess, content moderation, every aspect today, given the technology has taken and technology has enabled it very, very nicely in the last year, especially.

Page 15 of 18 It has come within reach of everybody I mean, just take an example of voice AI. Today, almost 80% of our buyer interaction, which used to happen on a normal call have already been gone to AI bot, Voice bot. And they are performing better in terms of quality and better in terms of productivity. So I guess whether it is platform, whether it is content, whether it is user experience everywhere, world over, every technology platform, every UI platform, will require significant upgrade.

And we are cognizant of that fact, and we have always been ahead, and a very good user of the technology. We started Internet portal in 1995, so that will give you some glimpse of future that we can see.

No, no, sir, that has been really a great journey. But why I'm asking is this because I know for several years, we have seen like user interface typically being the same, right? We have not seen a very major upgrade. So where we are in terms of the upgrade journey, if you can give some idea. And also in terms of the internal technology team, how the internal technology functions and things?

So there are two things. One is the look and feel that you see.

Maybe look and feel is a little dated, and I take that feedback. I mean if you really look at the Microsoft Excel in 1992 and today, they are the same, but with the greater functionality. So there is nothing much that has changed on Google or Microsoft Excel in last 20-30 years. It is the substance that gets changed.

Having said that, feedback taken, we will upgrade and uplift the design and feel. However, the technology slide is in front of you. You can see there is a lot of changes currently going on, and we are very proud of our own technology platform. You just see the site speed that we open and the complexity of the things that we do, we are very proud of that and we do benchmarking with our technology. Our technology platform is equivalent or faster, similar to Amazon.com.

Our security levels are 96%, which is even one point higher than Amazon. So I think we continuously benchmark ourselves with Google and Amazon of the world.

Next question is from the line of Shubham Sehgal from Securities Investment Management. Please unmute yourself and go ahead with your question.

My first question is, could you share the typical progression of the paid suppliers from Silver to Gold or Platinum tiers? And additionally, I just want to understand how has this trend changed in the recent one or two years compared to the past

Page 16 of 18 years. So due to the churn, how this trend has changed. And if you could just share a typical progression on an annual basis, how many suppliers we expect from the silver category to get upgraded?

So, historically, 15-20% customers from silver move to gold.

From gold, another 15% customer typically move to platinum, its 10%, I think. So nowadays ever since the renewals have dropped, most of the upsell has dropped. So 80% of drop will come from the upsell because if the renewal was higher because most of the upsell happens at the time of renewal, when the people come up for renewal, that's when the upsell happen.

Since the renewal itself has dropped by 10-15%, I think the upsell itself is currently trending at 8-9%. So from 17-18% upsell, which used to trend anywhere between 15-20%, that is now trending at 5-10%, depending upon the different industries and different buckets.

Got it. My next question was, in the previous calls, you had mentioned that there is still a significant headroom for ARPU expansion among the enterprise customers that we have, given their large marketing budgets. So could you help me quantify this potential? And what is the estimated ARPU ceiling for this segment, the enterprise segment over the next two, three years?

And currently, what would be the percentage of IndiaMART's current revenue or paying supplier base which would be made of these enterprise customers?

So we have about 100 to 200-odd customers in the Enterprise segment. And depending upon when I'm saying 100 to 200 means those who are Platinum and Enterprise both, because there might be certain enterprise customers who have been using our gold service or using our silver service. Now from there, if you see in the top 1% of the customer, you will see 2,200 customers currently are paying Rs. 11 lakhs per annum. So that’s top 2,200 customers.

And within that, if you see the Pareto, at the highest level, we have customers who end up paying even upwards of Rs. 50 lakhs. So this is the average of top 2,200, Rs. 11 lakh. So if you see the median and above, you will see that it is ranging from Rs. 5 lakhs to Rs. 50 lakh, or so.

So just a follow-up on this regarding the ARPU growth. So you mentioned that the normal growth that we expect is around 6- 8%. But in the past few quarters, when we were getting accelerated ARPU growth, you had mentioned that it is due to

Page 17 of 18 the new category and differential pricing that we have involved in our system. So I just wanted to know like either that category pricing difference, has it just normalised in the system, that's where now the ARPU growth will normalise as well? Or could we again see accelerated periods of ARPU growth?

ARPU is driven by revenue and revenue is coming from deferred revenue, which typically reflects a three quarter ago collection trend. So if you want to see the current quarter ARPU, if three quarters ago, my collection was 9%, so ARPU was out of that, it was 3% was customer growth, 6% is ARPU growth, that ARPU growth we are seeing today. Either you see customer and collection and average collection but average collection per user is not a standard metrics in the market.

Otherwise, if you see the ARPU, it will always be a 15 months moving average ARPU.

Thanks for the clarity. Just last question. So on our platform, we do have different tags for different industries like our tag known as industry leader or leading supplier, and that's for the specific categories or the searches. So is there like a cap on the number of these tags that we have, the industry leader and leading supplier? And if there is a cap, does this help in retaining the customers because if they might go off with the tag or like remove the tag, that tag would be handed over to someone else. So is there a cap? And does it help in retaining any industry?

It comes at both, if I have a limited number of tags, then I limit my TAM because there is a limit to what a single person can give. But if I have unlimited, so initially, when we launched the industry leader program, I think we had three maximum. But over the time, the demand in the market was that I can't pay you Rs. 30 lakhs for being an industry leader, but there are three people who are willing to pay or five people who are willing to pay. So I think we have only one product, which is the category leader or something, which is not visible there as a tag but other than that, all the products are available with the demand supply kind of thing.

So we have one last question from the chat menu, which we can take, probably. This is related to accounting products. This question is from Mr. Vaibhav Jain. In our accounting products, can you throw some light on how the products are different from each of them or how they complement each other as part of the stack? And what is the value addition in comparison to competition like Tally, Zohobooks, etc?

So if we look at the three major companies within the accounting portfolio that we have. One is Busy, second is Vyapar and third is Livekeeping. Each of these companies essentially have a very different target segments. So Busy, for example, starts to do very well in the small and medium-sized businesses segment. These are businesses typically who will have a requirement of managing inventory apart from doing basic sales. So we want to do GST filing.

When we come to Vyapar, Vyapar essentially like to focus more on the micro sized businesses. These are businesses where billings is essentially the most primary requirement. And these are businesses, which are smaller in size, they want to go ahead and work upon, billing through mobile app more than just rely upon a desktop-based software.

When we look at Livekeeping, Livekeeping exclusively focuses on existing customers of Tally, who would want to have a browser-based and app-based access to the data and work upon that. So Tally does not offer you those opportunities currently, and therefore, Livekeeping become extremely useful to about 2 million of subscribers of Tally who essentially would want to access data on browser, on using a mobile app online.

So each of these companies are targeting different sets of customers altogether. And as a whole, therefore, we see that we will be able to have a significant play in the overall accounting Industry segment altogether.

This was the last question for the day. I would now like to hand over the call to Dinesh Agarwal, for his concluding remarks. Over to you, sir.

On behalf of IndiaMART, we thank everyone for joining us on this webinar. You may now disconnect your lines. Thank you.

This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings 2.

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