Matrimony.Com Limited Q3 FY23 Earnings Conference Call Insights

Key highlights from Matrimony.Com Limited (MATRIMONY) Q3 FY23 Earnings Concall

Management Update:

• [00:03:30] MATRIMONY said it expects Wedding Services to continue growing steadily and losses to be less than 3Q23 in 4Q23.

• [00:05:30] MATRIMONY expects matchmaking EBITDA to bounce back to the levels of 4Q22, and expect 4Q23 PAT to be at the same levels of 3Q23.

Q&A Highlights:

• [00:07:23] Prakash Kapadia from Anived Portfolio asked about the budgets for ad spends in FY24 and why ad spend as a percentage of revenues continues to grow. Murugavel J MD said that the marketing spend is at an elevated level due to the pandemic, but it has been optimized and is currently a large cost. For FY24, the marketing spend is expected to remain at the same level, although there is hope that the business will bounce back and improve EBITDA margins.

• [00:10:03] Prakash Kapadia at Anived Portfolio enquired if the company is increasing its advertising spending in order to maintain its current position and gain additional sales growth. Murugavel Janakiraman MD said MATRIMONY expects sales growth and the current level of marketing spend is necessary due to increased competition. This will contribute to increasing EBITDA and profit margin.

• [00:11:21] Prakash Kapadia with Anived Portfolio asked why the company’s ad spending has been increasing while its revenue growth has not. Murugavel J MD replied that MATRIMONY is spending more on TV ads than necessary because of increased competition, but the company believes that reducing it could have long-term implications. MATRIMONY will reduce the spend when the level of competition reduces.

• [00:14:06] Sonal Minhas of Prescient queried what makes the company think demand is bouncing back. Sushant Pai CFO replied that Post-COVID, there has been a drop of profiles acquired, but the trend from January and February gives the company confidence that it will bounce back in growth.

• [00:14:14] Sonal Minhas of Prescient asked about growth outlook for topline in FY24. Sushant Pai CFO answered that MATRIMONY expects the next year to be much better than FY23, as profits are returning and the company is already seeing positive results from its initiatives.

• [00:15:32] Sonal Minhas of Prescient enquired about the current customer acquisition cost, online and offline combined. Murugavel J MD clarified that most acquisitions are organic, so there isn’t an associated cost. For digital, there is a cost of acquisition, but it cannot be disclosed for competitive reasons.

• [00:18:14] Anurag Purohit from Anived PMS asked what positive leverage will come in 4Q23 to make PAT similar to Q3 even after including one-time gains. Murugavel J MD replied that the land sale from 3Q23 did not affect matchmaking, but the matchmaking EBITDA margin will improve back to the 22% plus level seen in 4Q due to improved billing and revenue in 4Q.

• [00:22:18] Shyamsundar Iyer from MICA enquired if the company is seeing any growth in the markets where its exposure is relatively weaker vs. competition. Murugavel J MD replied that MATRIMONY is a strong player in the South, East, and West, but it is still looking to expand in the North.

• [00:22:47] Shyamsundar Iyer from MICA also asked about Jodi’s business update. Murugavel J MD replied that Jodi is a part of MATRIMONY’s business and it is committed to growing it, but no individual breakdowns can be given.

• [00:27:04] Sohail Rozani from SV Rozani enquired about any specific initiatives MATRIMONY is taking for FY24. Murugavel J MD replied that currently it cannot be disclosed and the plans will be announced during the next earnings call.

• [00:31:30] Deep Shah at B&K Securities asked about the Elite Matrimony segment update and if it’s slowing down. Murugavel J MD replied that Elite is a small part of its business, but the output is very good. One challenge MATRIMONY has is that there are not enough male members in Elite, so it’s working on plans and strategies to get more male members enrolled. MATRIMONY has plans to grow this market, but it is still a small contribution to its overall business.

• [00:33:44] Heenal Gada from ICICI Securities enquired about capital allocation and if MATRIMONY is planning to return any amount to the shareholders. Sushant Pai CFO answered that the company recently returned INR75 crores for the shareholders and paid an increasing dividend. In terms of inorganic growth, MATRIMONY continues to evaluate any opportunities that come by, such as the ShaadiSaga acquisition from last year.