Matrimony.Com Limited has informed the Exchange regarding 'the call transcript of Investor/Analyst Conference call with the Company held on 05th February 2020'.
matrimony.com
February 14, 2020
National Stock Exchange of India Ltd Exchange Plaza, 5th Floor Plot No: C/1, G Block Bandra Kurla Complex, Bandra (E) Mumbai- 400 051
., Phiroze Jeejhee Dalal Street, Mumbai -
Towers
Dear Sir/Madam,
Sub: Call transcript of Investor/Analyst conference call under regulation 30(6) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Ref: BSE Scrip code: 540704/ NSE Symbol: MATRIMONY
Pursuant to Regulation 30(6) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations,2015, the call transcript of Investor/AnalystConference call with the Company held on 05th February 2020 is attached herewith.
The aforesaid information is also being hosted on the website of www.matrimony.com.
the Company viz.,
Submittedfor your information and records.
Thanking you
Yours faithfully,
For Matrimony.com Limited
~ Company Secretary & Compliance Officer ACS: 18951 No.94, TVH Beliciaa Towers, Tower II, 10th Floor, MRC Nagar, Chennai - 600028
Corporate & Registered office: No:94, TYH Beliciaa Towers, 10th Floor, Tower 2, MRC Nagar, Mandaveli, Chennai . 600 028. Tamilnadu,
India. Phone: 044·24631500
matrimony. com ltd. ( CIN L63090TN2001PLC047432 )
--.
matrimony. com
"Matrimony.com Limited Q3 FY 2020 Results Conference Call"
Feburary 05, 2020
MANAGEMENT: MR. MURUGAVEL JANAKIRAMAN - PROMOTER &
MANAGING DIRECTOR, MATRIMONY. COM LIMITED MR. SUSHANTH PAl - CHIEF FINANCIAL OFFICER, MATRIMONY. COM LIMITED MR. KULDEEP KOUL - ICICI SECURITIES LIMITED
MODERATOR:
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Matrimonycom Limited February 05, 2020
Moderator:
Ladies and gentlemen. good day, and welcome to the Matrimony.com Limited Q3 FY2020
Earnings Conference Call hosted by ICICI Securities Limited. As a reminder. all participant lines
will be in the listen-only mode and there will be an opportunity for you to ask questions after the
presentation concludes. Should you need assistance during the conference call, please signal an
operator by pressing ,,*,. then "0" on your touchtone phone. Please note that this conference is
being recorded. I now hand the conference over to Mr. Kuldeep Koul from ICICI Securities. Thank
you and over to you!
Kuldeep Koul:
Thanks everyone for being on the call today. We have with us the senior leadership of
Matrimony.com, Mr. Murugavel Janakiraman, Promoter & Managing Director and Mr. Sushanth
Pai, Chief Financial Officer. We will begin the call with prepared remarks given by Mr. Murugavel
Janakiraman, post which we will open up the call for Q&A. Over to you Mr. Murugavel.
Murugavel J:
Thank you Kuldeep. Good Evening. On a consolidated basis we achieved Rs.90 Crores of revenue
in Q3, which is a decline of 2.4% quarter-on-quarter and growth of5.6% year-on-year.
Key highlights for the matchmaking business are as follows. In Q3, billing was at Rs.89.5 Crores,
a growth of 5.7% quarter-on-quarter and 8.7% year-on-year. Revenue at Rs.87.8 Crores, a decline
of 0.9"10 quarter-on-quarter and a growth of 6.3% year-on-year, 4.38 million active profile as of
December 31,2019, we added 1.2 million profiles in the quarter denoting a growth of29.1% year
on-year. Paid Subscription of 1,73,538 added during the quarter. The average transaction value for
the matchmaking business increased by 3.8% quarter-on-quarter and 9.7% year-on-year. We
continue to track the impact we create for the customers. We are happy to state we have created
about 22,800 success stories in Q3.
Now coming to the marriage services business, the key highlights for Q3 are as follows: billing at
Rs.2.4 Crores showed a decline of 29.8% quarter-on-quarter. As explained in our previous
quarter's call, we have scaled down the photography business in the current model by not taking
additional orders and it impacted to the billing and revenue. As indicated earlier we are working
on a revised market place model for photography, which will take effect next quarter. Revenue at
Rs.2.2 Crores a decline of 39.6% quarter-on-quarter. The losses are at Rs.4.6 Crores in Q3. This
loss will come down next quarter due to scaling down of photography business and will be
streamlined from Q 1 onwards.
On the growth outlook for Q4, billing momentum of our matchmaking has increased in Q3 and we
expect the growth momentum to continue in Q4 as well. Therefore, we expect revenue for
matchmaking to bounce back on a quarter-on-quarter basis. This also helps us to set a good growth
foundation for FY 21. We expect revenue of marriage service to show a slight decline in Q4 due
to scaling down of photography business. I am also happy to inform that we achieved 26.1% stake
in Astro-Vision, the promoter of ClickAstro. The 26.1% stake is significantly through the fresh
infusion of capital in Astro-Vision. The transaction is subject to customary closing conditions and
regulatory approvals.
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Matrimonycom Limited February 05, 2020
Astro-Vision since its inception in 1984, has been the pioneer in promoting Vedic based astrology
solutions by providing astrology content and astrology software in more than 10 Indian languages
and has generated more than 110 million horoscopes till date. Today this software is considered
the de facto standard in the field of Indian astrology. The spiritual religious market activity
estimated to be a multi-billion dollar market in India of which horoscope is an important
component. The growth in technology has significantly increased the traction for astrology and
astrology continues to play a significant role in Indian marriages. Matrimony.com and other
leading matrimony service providers have been using astrology services offered by Astro-Vision
for many years. With the strategic investment we see further synergies in enhancing our value-add
to our customers and also accelerate the growth of Astro-Vision. Let me now pass on to Sushanth
to comment on the key profitability highlights. Over to you Sushanth.
Sushanth Pai:
Thanks, Muruga. Our EBITDA margins for the matchmaking business in Q3 is at 21.2% as
compared to 23.9% in Q2. Marketing expenses are at Rs.26.7 Crores as compared to RS.25.5Crores
in Q2. The decline in margins is mainly due to increased marketing expenses as stated now and
also increase in certain employee cost due to increments, which were given in the quarter. On a
consolidated basis our EBITDA margins in Q3 are at 12.3% as compared to 15.5% in Q2. The tax
rate is about 12% in Q3 due to certain tax adjustments that were carried out during the return filing.
Overall YTD tax rate is at 24%. Q3 PAT is at 5.6 Crores, PAT margin is at 6.2% as compared to
8.5% in Q2.
On the outlook for Q4 margins, the EBITDA margins is expected to be in a similar range as what
we achieved in Q3 and this will improve from QI onwards ofFY 2021. Also, on the basis of what
Muruga described on the increased momentum on the matchmaking business, which we had in Q3
will translate into better revenue. The marriage services loss will come down in Q4.
I would like to end with a customary safe harbour statement. Certain statements during this call
could be forward-looking statements on our business. These involve a number of risks and
uncertainties that could cause the actual results to differ materially from such forward-looking
statements. We do not undertake to update any such forward-looking statements that may be made
from time-to-time by or on behalf of the company unless it is required by law. With this I open the
floor for Q&A and pass it on to Kuldeep.
Moderator:
Thank you very much. We will now begin the question and answer session. The first question is
from the line of Archit Singhal from Safe Enterprises. Please go ahead.
Archit Singhal:
Firstly, if you can comment on growth for the industry versus Matrimony, we are trying to
understand the market share and secondly if you can comment on growth for various regions North
and South?
Murugavel J:
Only for the number three player the growth information is by and large public, but we do not
know the information about the number two player and the other players so it is difficult to
comment on what is the industry growth percentage, but in our view it may be around close to
double digit growth or a little over double digit growth, all put together, that is my view, but having
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Matrimonycom Limited February 05, 2020
said that we do not know the exact information about all the players. So. it is difficult to comment
on that one. In terms of the growth breakup between North and South we are not sharing the region
wise growth information just for competitive reasons, we just want to state only the overall growth
percentage.
Archit Singhal:
Matrimony for the last few quarters has been seeing a single digit kind of a growth and given there
is a huge opportunity for online matchmaking and you just mentioned that industry might be
growing at double digit, so just trying to understand from when can Matrimony grow in double
digit, what are the factors which can lead to higher growth compared to current levels?
Murugavel J:
Look at Q3, growth has bounced back to 9%. We expect the growth momentum to continue and
we believe that we can get into the double digit growth sooner than later, we have to wait and see,
but the good thing that we have set right some of the fundamental process changes, which I spoke
probably in the last quarter or so and we are gearing up for growth that started to reflect in Q3. We
expect the momentum to continue and we believe that Q4 will be a good quarter. We also believe
that we can get double digit growth sooner than later..
Archit Singhal:
In such a scenario where growth is revised, fair to understand that EBITDA margin at consolidated
level will again go to 15% for FY 2021?
Murugavel J:
It will improve because when we are looking at Q4 growth that will translate revenue from Q I
onwards. As Sushanth mentioned we expect the EBITDA margin to improve much better from Q I
ofFY 2021 onwards. Even with further increase in marketing budget the EBITDA margin will be
much better.
Archit Singhal:
What is the cash on books as of December?
Sushanth Pai:
We have about 239 Crores of cash on books.
Archit Singhal:
Thank you.
Moderator:
Thank you. The next question is from the line of Kuldeep Koul from ICICI Securities. Please go
ahead.
Kuldeep Koul:
Question on volume, so you have been sort of stagnating around this 1,70,000 to 1,80,000number
for the last two quarters, which is lower than what we have seen for you guys in FY20 19 and what
we have seen is that even though you are spending money on advertising and you are having profile
acquisition, but the conversions are actually being inferior, so two questions, first is that one would
have expected that since south India is two thirds of your market and the competitive intensity is
leaner there at least in southern parts of India growth and volume should have been there so that is
point number one, why are we are not seeing sort of volume improving as far as south India is
concerned where competitive intensity is smaller and second is that what is the imperative to spend
so much on advertising and marketing this quarter again relative to what we spent in Q2, if a large
part of that spend is happening on online channels and what you are acquiring is people who 'are
not willing to pay and what we need is female profile acquisition where the oonV"'i~l)
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Matrimony.com Limited February 05, 2020
generally higher, so how do you justify spending increasingly higher amounts of money on the
advertisement?
Murugavel J:
Thanks Kuldeep. By the way we are not sharing the breakup of volume between North, South and
East, but definitely South is one of the larger markets for us. We expect the volume growth will
improve from Q4 onwards because as I said, we have set a lot of fundamental things, what price
we have to sell to different regions, we have done a lot of optimization in segmentation that resulted
in increase in ARPU because it is important that we do not want to sell at a lower price for the
customer whom we think can pay well. So that definitely resulted in ARPU increase, but Q4
onwards we also expect the volume growth also to happen year-on-year. In terms of marketing
spend, the marketing spend is largely offline and most of the money is spent on TV advertisements.
Today the reason the marketing spend is high is thanks to the increased competitor activities, we
being leaders have to ensure that we have a strong presence and visibility in various markets. So
high marketing spend is required because today the competitive activity has definitely increased
and the marketing spend from the competitors have gone up. It is important that we being the
leader have the visibility and presence to effectively have our brand equity maintained at various
markets. We expect that the high level of marketing to continue till we see the competitive intensity
coming down.
Kuldeep Koul:
Fair enough, it is just that around three, four quarters back the annualized run rate expectation on
advertising and marketing was Rs.I 00 Crores and we are already 10% higher than that, so I am
wondering because your competitors also seem to have deep pockets, so how long we can go ahead
with this spends when it is not translating into better volume acquisition and/or better billing?
MurugavelJ:
We expect a volume to grow from QI onwards, now we started to see a growth in Q3 we expect
good growth in Q4 as well. EBITDA margin will start improving from QI of next year because
other than marketing, other costs will remain stable. I hope that the growth momentum continues
again starting FY 2021. I think things will get better from Q I of next year onwards.
Kuldeep Koul:
Fair enough. That is helpful and what is 5.7% improvement in sequential billings was that broad
based across markets or was that driven by one specific market?
Murugavel J:
Across the market.
Kuldeep Koul:
Last time you spoke about these refined initiatives that you are taking by bringing in analytics, AI,
which the telesales guys will use to target subscribers better and drive more efficient conversions.
I was wondering where we are in that process and have there been any sort of green shoots in terms
of the approach that you have taken?
Murugavel J:
We have been leveraging AI across the functions, be it on the products, be it on the sales and other
areas. Yes, we are able to use some of the insights or expertise in the sales as well. We will
definitely see improvement in efficiency and we believe that it will also help us in optimizing some
resources or help us run operations effectively. We will definitely see some improvements on those
areas.
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Matrimony.com Limited February 05, 2020
Moderator:
Thank you. The next question is from the line ofPranav Shatriya from Edelweiss. Please go ahead.
Pranav Shatriya:
Just some colour on how do you see marriage services panning out over the next two, three years.
there has been lot of product innovation planned. some successful, some not so successful, so how
do you see this expand in the medium to long term?
Murugavel
J:
We have matrimonymandaps.com, we have over 5000 venues whom we have relationships with,
we expect matrimonymandaps will become India's largest venue discovery and booking platform.
At this point we are focusing on acquiring venues, we have more than 5500 venues as part of our
platform and we have matrimony bazaar, we have services across India. Both business are focusing
on getting the vendors. Again most of revenue for wedding services at this point of time is largely
coming from South India. We are expanding, we believe this business is scaling up and again
mandaps is focused on acquiring more venues and we have started monetizing those venues as
well. Again Bazaar we started monetizing at the same time, we are acquiring more vendors as well.
The business is still in early stages. Photography till recently the model what we attempted to scale
was the full service model. As we told in the last quarter, that full service model had its own
challenge as we scaled up, we realized that it is not the model we want to work on, so we are
moving to a market place model on photography. This started this quarter, again it is too early to
comment on the market place of photography how it is going to work out, we believe that is the
right way forward rather than owning the photography and videography. We think this is a better
model to go ahead on the photography. At this point we can assume that all this business are still
in the early stages and we continue to improve things, continue experimenting, but we believe that
we are following the right direction with respect to be it mandap, be it bazaar and again
photography is early to comment on. We believe that we could scale as we progress and the idea
is that we do not want to burn too much of cash, again we have been experimenting we want to set
things right. Next year also we want to ensure that we keep the losses under control. Once we are
able to get that some growth strategies identified we will be able to scale up at a rapid pace. At this
point of time, we will continue to experiment, continue to try new things and ensure that we are
following the right direction without losing too much of money though it has immense potential
and as I said, objective is to grow in a meaningful way without burning lot of cash.
Sushanth
Pai:
Also our objective is to see how we can contain the losses in a range bound manner, so we realized
that in the photography business it was not scaling up as expected, the model was not working as
expected and we took a call on that because we felt that it was not yielding the desired results and
by changing it like I mentioned in the brief, the losses in the marriage services level will come
down from next quarter and will remain in a range bound level. So we will also be cautious about
the costs at the same time investing to create the right ecosystem in place for future growth.
Murugavel
J:
I want to add to it definitely we are looking at growing aggressively in the wedding services at the
same time we do not want to just put money behind the problem, we want to do things in a right
way, get things right, identify the growth spots and then drive the growth then we can invest to
support the growth. Again a lot of work is going on and we believe that the new business model is
the right model of photography, hope next year can be a better year for wedding services.
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Pranav Shatriya:
Do you have any target bum in mind when you spend. or you just look at the business as it comes
as you see the potential you decide that you want to invest in that, how exactly that framework is
shaping up?
Murugavel J:
At this point of time we are keeping the loss probably around Rs.3 to 4 Crores in the quarter for
wedding services. That is a range we want to update at this point of time till we see some changes.
Sushanth Pai:
See typically when you look at the business we see what is required in terms of getting the business
up and running so when you get the business up and running there are certain costs required, there
are fixed costs, there is technology cost, you need to build the website, you need to get people so
that you can create the ecosystem; however, the revenue does not come because the focus is more
on creating the ecosystem. In the beginning of the year we said that typically the losses will be in
a particular range for example in the range of RsA Crores every quarter and that is the thing that
we decided for the year. As we close this year we have figured out something is not working and
something is working. Based on that we will again tweak that on a quarter-on-quarter basis so that
is the way to see the investment model for marriage services.
Pranav Shatriya:
Sure. Thank you. That is it from my side.
Moderator:
Thank you. The next question is from the line of Archit Singhal from Safe Enterprises. Please go
ahead.
Archit Singhal:
Sir just continuing on the previous question regarding marriage services, is there any number or
any targets, which you want to achieve in terms of revenue scale over the next three to five years
because it has been pretty flat for the last few quarters and secondly are you open to acquire
anything in organic expansion in that space specifically?
Murugavel J:
Definitely we continue to evaluate opportunities, which can help us to grow better. As we progress
if any interesting opportunity makes sense we will be definitely be keen to look into it and in terms
of the revenue growth it has been flat because the revenue has degrown in wedding services largely
because of photography. In the next couple of quarters, it will be less only because the photography
has got a new model and will probably improve from the later part of the coming year probably
Q3, Q4 onwards. The next few quarters because of the absence of photography revenue, which
was part of the earlier quarter, revenue may be less than the previous quarters. It will get better
from the end of FY 2021 onwards.
Archit Singhal:
On a longer term do you have any ambition or target which you want to achieve in terms of revenue
scale for the business?
Murugavel J:
There is an ambition definitely, opportunity is so big, but you have to get some of our strategies
and actions right to achieve those ambitions. Yes, there is ambition to achieve Rs 100 Crores in
wedding services in the next couple of years or three or four years, but we have to get our act,
strategies, people, process and growth spots right.
Archit Singhal:
Thank you.
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Moderator:
The next question is from the line ofKuldeep Koul from ICICI Securities. Please go ahead.
Kuldeep Koul:
Ijust want to understand the pricing philosophy a little bit better as far as North and West markets
are concerned because the competitive intensity is very fierce in those markets and your
competitors are discounting the sticker price by 70% to 80%. In that context the cost structures that
you are running are predominantly fixed cost structures, so I am wondering that incrementally why
not be aggressive in terms of offering those discounts in these markets and convert subscribers
because at the end of the day that is all incremental revenue and there is an incremental flow
through to that. It is not as ifthe market space is transparent in the sense that if you offer a discount
to person A that discount will be evident to all of the profiles, which are available on the platform.
So, in that context given the fixed cost nature of the platform per se and the fact that there is no
transparent mechanism of pricing being visible to all participants, Iam wondering why not take
that incremental EBITDA?
Murugavel J:
This is a fair point. As you said, it varies from market based on various segments. We do not want
to get into flat 80%-90% discount to be offered to the customer. We think that we can do a better
job on offering right price to the right customer, we have certain ways of doing things. We believe
that is the right way to do things and may be different opinion on that is possible. It is not that we
are looking at single price to the customer, our price is based on market and based on segments, so
we continue to look at how to sell or get more subscribers by offering may be discount or other
things we can offer to the customers to get more customers to subscribe for our services. We
continue to improve on what we are doing to segments and pricing. It is ongoing thing for us and
we continue to work and continue to improve on those things.
Kuldeep Kaul:
Got it. Sir couple of followup questions for Sushanth just housekeeping questions. Sushanth you
had mentioned last time that growth in South market was higher than company average and North
and West was a little bit lower than company average as far as Q2 is concerned. I was wondering
whether you can give a similar commentary on Q3 and second even on profiles a few quarters back
you had given some data points in terms of profile growth in markets like Punjab, Gujarat and so
on and so forth. Iwas wondering again if you can give a little bit of color and flavor regarding how
the active profile growth is across markets?
Sushanth Pai:
At that time we had given that thing because we had not seen much of traction in the North and
West at that point in time, but after that the profile acquisition has been sort of much better than
what it used to be a the year back, so in terms of profile acquisition I think we have seen broad
based profile acquisitions across all geographies. Which means we are not seeing anything that is
negative across any geographies in terms of profile acquisition that is why I have not given specific
commentary on this. On the overall growth perspective yes that fact remains that at an overall level
our strong markets are growing higher than the company average and the markets in the North and
West are slightly lower than the company average so that continues.
Kuldeep Kaul:
Got it. That is very useful. Thank you.
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Moderator:
Thank you very much. As there are no further questions I will now hand the conference over to the
management for closing comments.
Sushanth Pai:
Thanks Neerav, thanks Kuldeep and thank you all for joining this call and we look forward to
speaking with you in the coming days. If you have any further questions, you can write to us and
good night. Thank you.
Moderator:
Thank you very much. On behalf ofiCICI Securities Limited that concludes this conference. Thank
you for joining us. You may now disconnect your lines.
(This document has been edited for readability)
Vijayanand S
Company Secretary :
Matrimony.com Ltd.
No: 94, TVH Beliciaa Towers, Tower 2, 10th Floor
MRC Nagar, Mandaveli, Chennai- 600028, Tamil Nadu, India.
Phone: 044-24631500
Email: investors@.matrimony.com
CIN: L63090TN2001PLC047432
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