I took a position on Indiamart intermesh on friday, 31 May, 2024.
What I liked :
- Negative working capital
- Very healthy free cash flow and growing
- Compelling valuation compared to historic multiples
- Management willingness to return cash to shareholders
- Healthy return ratios
What I worry about:
- Stress in MSME sector, I do not know if the worst is over
- Heightened competition from the like of JD etc
- The strategic investments in various companies doesn’t seem to scale fast
- Very low paying customer base, compared to total registered suppliers