NewsStocksChoice Institutional Equities Maintains BUY Rating for INMART with Target Price of ₹2,800Choice Institutional Equities Maintains BUY Rating for INMART with Target Price of ₹2,800
Choice Institutional Equities maintains BUY rating for INMART with ₹2,800 target price, valuing the company at 25x PE on average FY27E-FY28E EPS of ₹115.00. The brokerage projects 14.80% revenue CAGR over FY2025-28E but has reduced EBITDA estimates by 3.50% due to higher cost structure expectations. While collections momentum has improved, subscriber churn particularly in Silver category remains a key challenge, with management expecting tangible improvements only by FY27E.
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Choice Institutional Equities has reaffirmed its positive outlook on INMART, maintaining a BUY rating with a target price of ₹2,800 despite ongoing operational challenges. The brokerage's recommendation comes amid mixed performance indicators, with improved collections momentum offset by persistent subscriber churn issues.
Financial Projections and Valuation
The investment firm has maintained its revenue growth projections, modeling a robust 14.80% revenue compound annual growth rate (CAGR) over the FY2025-28E period. However, profitability estimates have been adjusted downward due to anticipated higher operational costs.
| Financial Metric | Projection/Target |
|---|---|
| Target Price | ₹2,800 |
| PE Valuation Multiple | 25x |
| Average EPS (FY27E-FY28E) | ₹115.00 |
| Revenue CAGR (FY2025-28E) | 14.80% |
| EBITDA Estimate Reduction | 3.50% |
Choice Institutional Equities values INMART at 25 times price-to-earnings ratio applied to the average FY27E-FY28E earnings per share of ₹115.00. The valuation has been cross-verified through discounted cash flow (DCF) analysis, which broadly supports the implied valuation methodology.
Operational Challenges and Recovery Timeline
The company continues to face headwinds from subscriber churn, with the Silver category experiencing particularly pronounced attrition rates. Management has indicated that tangible improvements in churn metrics are not expected until FY27E, suggesting a longer recovery timeline than previously anticipated.
Near-term performance is expected to remain driven by average revenue per user (ARPU) improvements rather than subscriber base expansion. The gradual recovery in net subscriber additions will be contingent on successful churn moderation and enhanced sales execution following recent pricing adjustments.
Revised Cost Structure Assumptions
While maintaining revenue growth estimates, Choice Institutional Equities has trimmed EBITDA projections by 3.50% to account for a higher anticipated cost structure. This adjustment reflects a more conservative approach to profitability expectations amid the current operational environment.
The brokerage notes that collections momentum has shown improvement, providing some positive indicators for the company's financial performance. However, the persistent churn issues, particularly in key subscriber segments, remain the primary concern for near-term growth prospects.
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