IndiaMART reported a consolidated net profit of Rs 90.7 crore for Q2 FY27, a 10% rise year-on-year, alongside a 10% increase in operating revenue to Rs 428.6 crore despite declines in its core user metrics. These shifts come as AI changes impact search engine traffic and IndiaMART restricts content access to protect proprietary data.
- Net profit rose 10% to Rs 90.7 crore in Q2 FY27
- Paying suppliers and active buyers declined amid AI-driven search changes
- IndiaMART moving content behind login to protect data
What happened
IndiaMART reported a 10% increase in consolidated net profit, reaching Rs 90.7 crore for the quarter ended September 2026 (Q2 FY27). Operating revenue also grew by 10% year-on-year to Rs 428.6 crore despite a decline in key user engagement metrics. The company’s paying supplier base fell 2% to 217,000, while active buyers dropped 7% to 40 million and unique business enquiries decreased 14% to 27 million.
The declines occurred even as annualized revenue per paying supplier increased by 10% driven by higher-tier Gold and Platinum subscriptions. IndiaMART’s expenses rose modestly by 3% to Rs 276.3 crore, resulting in improved unit economics with the company spending Rs 0.64 to earn every rupee in the quarter.
Why it matters
The drop in business enquiries and user engagement is tied to evolving search traffic patterns, particularly Google’s adoption of AI-generated Overviews that reduce traffic sent to classifieds marketplaces like IndiaMART. Additionally, IndiaMART has intentionally moved some content behind login pages to curb unrestricted scraping by search engines and large language models, potentially sacrificing 10-20% of business enquiries to protect its proprietary data.
The company’s CEO, Dinesh Agarwal, stated they do not aim to fully transform into a transactional marketplace, unlike competitors considering such moves. Prior experiments with transactional models and payment platforms were unsuccessful. Instead, IndiaMART plans to gradually move closer to transactions through initiatives like credit facilitation pilots while avoiding direct lending from its balance sheet.
What to watch next
Monitor how IndiaMART balances protecting proprietary data and sustaining user engagement as AI-driven changes to search traffic continue. The impact of restricting open content on paying supplier and buyer retention will be critical to the company’s growth trajectory.
IndiaMART’s approach to gradually enhancing transactional capabilities, such as through credit facilitation without direct lending, will be important to observe. How these pilots evolve and whether they translate into increased revenue or user activity will shape the company’s strategic direction in the increasingly competitive B2B marketplace space.