Matrimony Board Approves Rs 72 Crore Buyback At Rs 1,025 Per Share

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00:00Sushant, thanks so much for joining in. I believe I'm calling out name correctly. It's

00:04Sushant Pai, right?

00:05Yes, you have got it right.

00:07Perfect. Thank you so much, Sushant. Good having you. Thanks for taking the time out.

00:10At the onset, happy festivities to you and everybody at Matrimony. But just tell us a

00:16bit about the buyback. Is it being done to kind of take advantage before the window closes

00:22or is this symbolic in nature? Because it's not a very large buyback per se.

00:27Yeah. So firstly, thank you for having me here and good morning to all the viewers and happy

00:32festivities as well. So first, you know, this is our second buyback. You know, we did the

00:38first buyback in 2022. It is a form of a capital allocation policy. It is a form of returning

00:45the shareholders. And there are different forms. So this is one form of it. Right. So

00:49the second thing is I think our company is a profitable company. It's a debt free company.

00:54We are a cash generating company. So we have about as of 30th June, we had about 382 crores

01:01of cash. So from that perspective, it makes sense. And therefore, buyback has to be seen

01:07from that perspective in terms of what we perceive as the value for matrimony.com.

01:13The second thing on the shareholder bit, right, there's a little bit of a technicality there. I'll

01:18just speak about it. See, you can do up to 25 percent of the net worth, you know, as buyback.

01:25Our net worth is about 288 crores. So we have done the maximum in terms of buyback and the

01:30board has approved at a price of 1025. However, since it crosses a particular threshold and it's

01:35up to 25 percent, this also requires shareholders approval and that which we will put forth to the

01:41shareholders soon. So from a tax perspective, since this buyback will be concluded only after

01:491st October 2024, the tax incidence will be by the shareholder and not by the company. So the tax

01:57will be borne by the shareholder. However, I think the shareholders have to look at their own tax

02:02brackets, look at their own tax laws, because I think different entities have different types of

02:09tax. For example, a residential don't have a different type of tax. Institutions, you know,

02:15they manage money on behalf of someone else. So they may have a different view on all of this.

02:21So they need to take into account their entities and then figure out their tax. But for us, I think

02:27strategy overrides the tax. You know, that's the way I see it. So for us, it makes sense to do a

02:34buyback and, you know, tax is only an eventuality out of it. For us, it makes sense to do a buyback

02:40and that's why we want to do the full maximum amount of buyback by taking shareholders approval.

02:46And I think the price is also at a very fair price. You know, since the price has also had

02:54over the last couple of months to three months. So if you look at the volume weighted average price

02:59over three months, it's a good premium of about close to 60%. So that's the way to look at this

03:04whole buyback scenario. Okay, thanks. Now, we have about seven odd minutes, I would love to

03:09understand about the business as well. Q1, Sushant, you yourself had been not quite up to the mark. And

03:17when I look at what's happened, let's say for the last two, three years, right? The three year

03:23revenue CAGR is what about seven, 8% or 9%, right? If I'm not wrong, margins were above the teens,

03:34now they are mid teens currently, what's happening with the business? Do you expect some

03:40changes to happen in the near term? Please fill us in. Sure. See, the matchmaking business, right,

03:48is highly competitive in nature. You know, there is a lot of competition in the north,

03:53we are leading in the south. So it has to be seen in the context of the industry as well.

03:59So what we are doing is obviously, this is not a business that will grow high double digits and so

04:04forth because of the nature of the business as well. So therefore, what we are doing is that

04:10to look at all avenues to make sure that non-customers come into our foray.

04:17And that's what we are looking at. So for example, if you look at now about 2021,

04:23we started something called Jodi in the vernacular language plane to nine vernacular languages,

04:28that is more for non-graduates, right? So the point I'm trying to make is that this business

04:34requires a lot of innovation day in, day out, be it product features, be it the way you price it,

04:40segmentation, and we have to do all what it takes for the growth. So it's a daily business,

04:44it's a consumer internet space, right? So our view is that we have to go on bringing

04:49newer segments into the foray and Jodi is one example. So earlier we were, you know,

04:54tackling, you know, the mid segment through Bharat matrimony or community matrimony.

04:58We also had the elite and personalized services like assisted and with Jodi coming into play,

05:05you know, we have sort of completed the entire pyramid. So continuously we're looking at avenues.

05:10Quarter one, what happened is this year had an unusual number of more number of inauspicious

05:16days as compared to quarter one of last year. So therefore, you know, after many, many quarters,

05:21actually many years, we first, you know, after a long time, I think we had a decline in quarter one.

05:27As we see the business, you know, we are looking at various growth reverse. We believe that quarter

05:33two is also a little muted quarter, it is expected to be a muted quarter. But however, we believe

05:38quarter three onwards, you know, we expect bounce back to happen from quarter three because of the

05:43various initiatives also that we are taking. As we speak, you know, we've also launched,

05:48you know, in two markets, Tamil and Kerala markets.

05:51Sushant, I'm sorry, but I have four minutes. I'm going to try and make it a bit of a rapid fire.

05:55Yeah, and maybe we'll have a longer conversation later. So you expect quarter two or rather quarter

06:00three onwards things to pick up. I hear that it's a very busy wedding period until May,

06:05once the wedding season starts as well. Does that have a direct impact? And therefore,

06:09could FY25 numbers look better than the 8-9% average they've clocked in the last three years?

06:17No, I don't think so. Because you know, quarter one has been muted one, quarter two is looking

06:22muted. And therefore, quarter four is traditionally a strong quarter for us. So I don't

06:28think we'll be in that sort of a range. But we will see as it progresses, you know, how we will

06:33do and we want to do better as we go along. But I don't think we will reach that sort of a range.

06:38Okay. Okay. Thanks for the candor. The other piece is you cutting down on advertisement

06:42expense as well. Is this an attempt to shore up margins? Or is it a belief that now you do not

06:48need as much advertisement in order to grow? I think the short answer is we are at a very

06:54good threshold level of marketing, right? We've spent about 46-47 crores and we are

06:59covering all segments. I think that's good for us. Competition intensity has also reduced in

07:03certain pockets. So given all of that, I think we are in a comfortable space in marketing. And

07:07therefore, you know, if you exclude marketing, our gross margins are very good. And with that,

07:12you know, we hope that margins also will show some improvement as we go along in the year.

07:17Okay, but maybe post quarter three, once the period, once you said that business starts

07:23looking up a bit. Yes. Okay, great. You are exploring new business segments, I believe,

07:29beyond matrimony. So what's one, what would these be? And two, what's the rationale for doing this?

07:36Yeah, so the rationale is basically to take advantage of a consumer internet brand.

07:41You know, the decades of experience that we have had, we've been here,

07:45we are just entering our 25th year. So to take care of all of those things,

07:49and the rationale is our MOA is very, very narrow. So we want to make it a little more,

07:54you know, broad, and we have taken an enabling resolution and the shareholders have approved it.

07:58What businesses will start will be a board subject, as in when we deliberate to the board,

08:03we will announce to the market if there is anything that is in the pipeline. But this

08:08was a more like an enabling resolution. And we will table it as and when we go along.

08:13Sorry, so am I understanding that you've made it an enabling resolution, but there's nothing

08:18which is decided or on the anvil about a foray into other brands, other products as of now beyond

08:23matrimony? Yeah, so we are thinking of a couple of things. But as and when it comes, we will

08:28announce. So right now, there is nothing to announce. It has to be deliberated by the board.

08:34Got it. Okay, which is fine. But funding won't be an issue because I presume you're sitting on a

08:38large pool of cash anyway, which was even post the buyback. I believe the cash on hand would be

08:43fairly substantial. Yes, yes, we'll still be about 300 crores, even after the buyback

08:49cost. And these businesses, you know, even if we enter into these businesses, these don't require

08:54these are not capital intensive or people intensive in nature. These are all certain

08:58product place, right? So I think we'll, we'll have a frugal investment discipline as well,

09:03even if we enter new segments. For sure. One statistic, Sushantan, that's my last question,

09:09really one statistic that I really wanted to understand. And correct me if I'm wrong, of

09:16course, you, you added, what about over two and a half lakh paid subscription paid subscribers,

09:23right? But the average transaction value for matchmaking remain flat. Why is that the case?

09:29Is there a price downtick that has happened due to competition? What has gone behind this?

09:35See, that's, that's our segmentation strategy. Like I told you, right, that Jodi, for example,

09:40is priced as low as 1000 rupees, and Elite would be priced as high as 50,000 rupees. So the mix

09:46changes, the product things also changes. So it's a segmentation strategy within various communities,

09:52within various segments, we price it differently and depending on the proportion of the various

09:57products, the price changes. So it's a conscious call on how we price it. Okay, no, but so my,

10:03okay, sorry, just extending my last question before we wrap up. Could it happen, Sushant,

10:07that your number of subscribers and the paid subscriptions move up? And you might be wanting

10:14that to happen, even if it comes at a lower revenue per user to you? Could that happen

10:20over the course of the next nine to 18 months? Yeah, so I think our ATV would be very range

10:26bound. You know, I don't think there'll be a significant change. But a consumer internet

10:30company like us, it's good for paid volumes to go up. Right. So it's good to get more people

10:36paid into the subscription sort of thing. So yeah, your question is right, that it's good

10:41for paid subscription to move up. Okay, well, a fascinating space that you guys are in. I

10:47wish you all the best for that and more. Sushant, thank you so much for being patient with my

10:50questions. Appreciate your time. Thank you. Have a good day.

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