Shares of IndiaMart Intermesh jumped over 6% to Rs 2,650 on Tuesday after Nuvama Institutional Equities upgraded the stock to ‘Buy’ from ‘Reduce’ and raised the target price to Rs 3,800, citing an impending demand upcycle.“We upgrade IndiaMart from ‘REDUCE’ to ‘BUY’ — following earlier downgrades in Oct-23 to ‘HOLD’ and Oct-24 to ‘REDUCE’ — as we believe the business is entering a new demand upcycle,” the brokerage said in a note, according to an ET report.IndiaMart shares were trading at a one-year forward price-to-earnings multiple of 28x, compared to the historical average of 45x. Despite Tuesday’s rally, the stock remains down nearly 3% over the past year.Nuvama said the new cycle is expected to begin with an improvement in traffic and unique business enquiries, followed by a rise in net subscriber additions and an eventual acceleration in collection growth. The brokerage has increased its earnings estimates by 9–10% for FY26 and FY27, driven by higher revenue projections, though it has trimmed profitability expectations.The target valuation multiple was revised upwards from 22x to 35x — the level prior to the October downgrade — citing improved growth prospects. The new price target is Rs 3,800, up from Rs 2,100 earlier.According to Nuvama, IndiaMart’s management has undertaken structural reforms including platform improvements, partial insourcing of the sales force, and increased investment in branding and marketing. It also highlighted a shift in platform dynamics, noting that the company has reduced the number of supplier enquiries from seven to fewer than four, helping cut supplier competition.“Moreover, investing in attracting buyers will ensure there is plenty of enquiry volume for everyone to flourish. We believe headwinds have bottomed out and these investments are ready to deliver results. We reckon an improvement in subscriber additions shall occur by Q2/Q3, which will lead to a revival in collection growth,” the report added, quoting Nuvama. (Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)