Matrimony.com Limited (MATRIMONY) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Matrimony.com Q3 FY '24 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pradyut Ganesh from ICICI Securities. Thank you, and over to you, sir.

Good evening, everyone. On behalf of ICICI Securities, I would like to welcome all of you to Q3 FY '24 earnings conference call of Matrimony.com. From the company, we have Mr. Murugavel Janakiraman, MD and CEO; and Mr. Sushanth Pai, the CFO. Over to you, Mr. Murugavel for your opening remarks. Thank you, sir.

Yes. Thank you so much. Good evening, everyone. In quarter 3, on a consolidated basis, we achieved a billing of INR 116.2 crores, a decline of 0.8 percentage quarter-over-quarter and a growth of 4.3 percentage year-on-year. Revenue of INR 117.3 crores, a decline of 3.6 percentage quarter-over-quarter and a growth of 6.2 percentage year-on-year. The key highlight for the Matchmaking business are as follows: billing at INR 114.1 crore, a decline of 0.7 percentage quarter-over-quarter and a growth of 5.3 percentage year-on-year. Revenue at INR 114.9 crore, a decline of 3.5 percentage quarter-over-quarter and a growth of 6.7 percentage year-on-year. We have added 2.6 lakhs paid subscription during the quarter, a growth of 1.4 percentage quarter-over-quarter and 10.8 percentage year-on-year. Average transaction value for the Matchmaking business decreased by 2 percentage quarter-over-quarter and 4.7 percentage year-on-year, it's in line with our customer acquisition strategy. I'm happy to share that we launched a Safe Matrimony campaign aimed at increasing awareness about online frauds, with an actor Vidya Balan, as the face of this campaign. Now coming to the marriage Services business, the revenue was INR 2.2 crore, a decline of 5% quarter-over-quarter and 11.7% year-on-year. Our EBITDA losses in the quarter was INR 2.1 crore, down from INR 2.7 crore in quarter 2 and INR 3.1 crore a year ago. On the billing and revenue outlook for quarter 4, the Matchmaking revenue year-on-year growth expected to be with similar levels of growth achieved in the quarter 3. On wedding service revenue and losses are expected to be at similar levels of Q3. Now let me pass on to Sushanth to comment on the key profitability highlights.

Thanks, Muruga. Our EBITDA margin for the matchmaking business in Q3 is at 18.9% as compared to 21.3% in quarter 2 and 17.8% a year ago. Marketing expenses are at INR 45.5 crores as compared to INR 46 crores in Q2. Excluding marketing expenses, our margins in Matchmaking is stable at 59%. On a consolidated basis, our EBITDA margins in Q3 are at 14.3% as compared to 15.1% in quarter 2 and 15.9% a year ago. In Q3 of last year, we had a onetime gain on land sale of INR 5.8 crores. So that onetime gain is not there in this quarter. Tax rate in the quarter is at 22.8% as compared to 24% in quarter 2. PAT is at INR 11.1 crores, a decline of 11.3% quarter-on-quarter and 4.3% year-on-year. Share of profit from Astro-Vision, our associate company was marginal. Return on capital employed annualized is at about 13.6% as compared to 17% in quarter 2. Our cash balance is at about INR 346 crores. On the outlook for Q4 margins, our PAT in quarter 4 is expected to be at similar levels of quarter 3. I would like to end with the customary safe harbor 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. So we can now start the Q&A. Over to you.

[Operator Instructions] The first question is from the line of Ayush Vimal from Clearview Capital.

Sir, on the quarter 1 call, you had articulated your vision to reach INR 1,000 crore top line in the next 5 years, which basically implies a 15% growth rate. Now I just wanted to check, given the competitive intensity that exists currently, what gives you the confidence that you will be able to surpass the 6%, 7% growth that we have achieved over the last 3 to 4 years to go to 15%? Is there a change in strategy from our end? Are we entering new geographies or trying to further penetrate within the South India geography? What is it different that we are going to do over the next 4, 5 years, that gives us this confidence?

Yes. So definitely, that's a goal and that's the vision. So definitely, it's a combination of growing the existing business. So today, the business has been growing around between the 6% to 8 percentage. So we are taking steps to move to double-digit growth in the existing business, which we're already in. So we are taking various initiatives, various steps. And so we are at the current level of percentage of growth. And hope in the coming year, we could be able to move to the double-digit growth on the existing business possibly. But also working on launching new initiatives, which includes luv.com, which we already spoke, which we're working on it. Like that, we are looking at some new initiatives. The combination of existing initiatives and new initiatives we hope we could be able to accelerate the growth and get to the INR 1,000 crore revenue in the next 5 years or so. So looking at quarter 4, the quarter 4, probably the Matchmaking business, we may get into that INR 500 crore run rate only on the Matchmaking business. Today, one of the thing what we have taken on wedding services business is to first to achieve a profitability while that we are able to bring down the cost. And we need to get to the breakeven level, then we have ideas to execute further growth in the wedding service business. But at this point of time, the first and foremost focus on the wedding services to get to the breakeven level, then work on ideas which you have to target growth. So to sum it up, basically, the growth from the existing business and the steps we are taking, our new initiatives within the existing business to further growth for the new initiatives. All these things can -- we believe can help us to go to the better growth in the coming years.

Sure. I just had one more question. So we've seen that the competitive intensity has increased significantly after FY '19. I just wanted to understand the regional dynamics at play here. Was it that our competitors who are primarily North and West based were trying to enter our South India market where we have a stronghold? Or was it us who was actually looking to grow by entering into the North and West market? Which of the 2 forces was more dominant in increasing the competitive intensity?

See the competitive intensity is more on the marketing spend actually in terms of basically the overall, the market is growing at only certain percentage. It's more of -- the increased marketing spend net-net has benefited anyone, it's not the case. So compared to the yearly run [indiscernible] of market spend, everyone is at the marketing spend. Has it helped anyone? No, it's not the case. Look at Jeevansathi. They spend a lot of money on marketing, net-net has not really added to any growth in their revenue or -- so that way, it's more of the profile acquisition or the base in this category only growing at certain percentage while we launched Jodii and now we are looking at launching luv.com. So the increase in [indiscernible], in my view, it's more on the marketing side. Well, however, it's more of people try to enter the different market. But as it really happens, but in my view it's not the case. And while we have already present in this -- North Indian market, and it's not that we are -- we have dominance in South India, we are leader in the Western market. We are one of the leaders in the Northern market. So overall, the market dynamics, anything has changed, nothing has changed in terms of the overall dynamics of the market. Overall, the mix of the penetrations in the various markets. Yes, here and there, some percentage movement has happened, where we could have gained some markets -- some market without here and there some percentage of loss in some markets. But overall, in my view, the mix of the things have not changed. The only thing what I've also seen is that the small players, probably, even in my view, sort of fizzling out or they are no more at the level of competitive intensity base to operate at the region level. So some of the regional players like what you've seen in ABP Group in the Eastern market. We've seen that post IPO, they stopped their marketing off. There you see that they are completely stopped their marketing spend as well. It should be same with what you saw in the #3 player as well, their marketing spend -- substantially they reduced actually. Actually, the #2 player is still continuing to invest on marketing. So that makes us to operate out at this level of marketing. While if we reduce the marketing spend, yes, definitely we'll move to the profitability. But however, still we need to work on the top end growth in terms of either driving the profile, the value in conversion either in the existing line of business or you have to get into the adjacent line of business to drive the growth. Yes, we are working on the various initiatives. So basically, to answer your question, the marketing spend will not change the market dynamics basically while the people are trying to enter different, different markets. But net-net yes, some percent gain here and there, nothing much has happened.

The next question is from the line of Maan Vardhan Baid from Laurel Advisory Services Private Limited.

Just sort of just not just this quarter, just looking back over the last few years for the business and the company sort of one feels that with the buyback, the generous buyback that you did and the quantum of the buyback and the cash that is sitting on the books sort of one is kind of puzzled at whether staying listed is required for the company. So I'm just curious, has the Board, has the management contemplated delisting the business and sort of generating more value for itself out of that activity?

No, we continue to focus on driving the business and drive the growth. So in fact, this year, the profit could have been better, if not for the Google -- that issues happened in the beginning of the year. So otherwise, even this quarter, the profit margin would have been actually few percentage -- probably few hundred basis points would have moved up on a profit. Well, definitely, we are at a point of time, the growth has been 6 percentage to 8 percentage, it depends on. So we're continuing taking steps to drive the growth, to continue to drive the business, launch new initiatives. So I think we are focused on driving and growing the business.

And sort of just to take this a step further and to sort of -- I mean, over the last 4, 5 years that we owned this business, creating shareholder value has been a challenge. So I'm just wondering if -- what are the ways that you can -- and that is delisting, obviously, is one of them, and I'm just curious whether as a Board have you discussed it or not?

No, we have not discussed. So we are just focusing on growing the business, yes.

The next question is from the line of Kaustav Bubna from BMSPL Capital.

Yes. So I just wanted to understand how much percentage of your revenues currently is non-matchmaking, so new initiatives? And how much percentage of this revenue do you expect it to change to 3 to 5 years down the line. So how much percentage of your total revenues will be non-matchmaking 3 to 5 years down the line? And could you just explain how you plan to grow this non-matchmaking piece like will it be marriage services plus love -- when I say matrimonial, I don't include luv.com, so that's the dating part of it. So could you just explain your move to -- do you plan to diversify your revenue base? How are you going to go about this, et cetera?

Yes. So today, we look at the Matchmaking business our Wedding Services business, it's around 2 percentage. So maybe 5 years down the line, in fact the plan was to take it to even the 10 percentage. So at this point of time, we want to get to the breakeven before you invest further on wedding services business. Love will be part of Matchmaking business because for us, the love is -- it's not a dating, if you help people to find a meaningful love. So it's another way of helping people to find their life partner. So we don't consider it's a dating service while one may say so. So that way for us love will be still part of Matchmaking business, it's not matrimony, but it's called matrimony. The other services where we are looking at some initiatives, that may constitute part of the wedding services. So while apart from luv.com, we may look at launching new initiatives to drive the growth. So 5 years down the line, can Wedding Services business can contribute 10 percentage? Yes, that is a possibility. Yes.

So what's your plan on luv.com. Have you come up with any more updates that you'd like to inform us like...

Yes, yes, we are just working on it. We're working on it. Probably we hope that before the end of either this financial year or yearly or April sometimes we're going to launch it. It looks like maybe April 14 because that's our 24th anniversary. So probably we'll launch on that day if possible.

[Operator Instructions] The next question is from the line of Niraj Kamtekar from ProsperoTree.

Sir, my first question is that now more and more people are rather than getting marriage -- arrange marriage, the people are engaged via other way also, the love marriage or other way, then our -- it's not a biggest threat to our business?

That's -- while we do see that as a threat, but the Matrimony company is going to be there. And considering the cultural nuance of India and cultural connect and -- so we don't see anything because in the last 24 years, not even seen a single year where the Matrimony business has gone down year-on-year except during the COVID time. While in fact, the COVID time, we had a good increase in profiles, but the revenue had an impact. So that's -- leave alone that 1 year we never had even the degrowth in the Matrimony business. So it's been 24 years of continued growth. But the growth percentage vary, it depends on year-to-year. So the luv.com, yes, there are people who like to fall in love, millions of Indians aspire to fall in love. So considering that there are people who want to fall in love, to get married or fall in love -- they want to explore before they decide to get married or not. So that's the reason we are launching luv.com. So luv.com, we launched a couple of months. So we will cater to that segment of the opportunity where people don't want to come to matrimony site and to get married. So they want to explore and they decide to get married or so later. So that's the reason we're getting into that space as well.

So you don't consider that the reduction in the ratio of arrange marriage is not a threat to the Matrimony. Is it correct?

Yes, yes, see, because again Matrimony is not arranged marriage. Look at today, Matrimony.com, 70% of profiles are created by individuals. So I got married through my own service. I don't consider it like arranged marriage because it was me one who had a conversation. I felt I had arranged my own marriage. So I don't consider it's -- I feel it's a feeling of, I contacted -- I decided whom I want to get married. So it gives the people that, okay, they are in control over of whom they want to get married to. It's not -- the arranged marriage -- what people really think arranged marriage means, okay, parents are arranging. It's not the case. Within our platform, youngsters are arranging their own marriage. So that's why the matrimony thing to be seen. Again, you're talking about 70% of profiles are created by individuals. So there is some perception, okay, the Matrimony site means it's arranged marriage. No, it's largely driven by youngster but, yes, around 15 percentage of the profiles are created by parents. There are also some by siblings. So it's kind of collaborative matchmaking. Yes, it doesn't matter whether a youngster is creating a profile or individual creating a profile. Yes, in some states parents do get involved because it's -- the good thing about Indian matrimony thing is that it's a collective involvement and that's a beauty of our Indian marriage. So the online matrimony facilitates effectively. We don't think that love or -- while they don't enter the space, but this form of thing continue going to grow only.

Yes. But sir, our number of subscribers are not increasing in the same manner. It is around the -- the same numbers are since last few quarters. So what are the action plan by the Matrimony to increase the number of subscribers?

Yes. So we definitely -- we are today are almost talking about 2.6 lakhs subscriptions on a quarterly basis. It's more than 1 million on an annualized basis. A couple of years, they'll be around 800,000, moved to 900,000, now touched 1 million, now getting to 1.2 million. Yes, the endeavor, the plan is to accelerate that conversion -- convert the free member to paid member. So these are some of the challenges we have. That's reflecting in our result as well that we are growing at only around 6 to 8 percentage rather the goal is to touch the double-digit growth. Yes. The ongoing basis, we are continuing to fine-tune our product, continue to improve our things, work on appreciation and launch some new initiatives. All these factors are helping us to grow in certain things, but we need to further -- must step up our -- on the executions, our maybe large new initiatives. So yes, we are taking steps, but it's still to reflect in our results actually.

Because we are spending a lot of money on the advertisement. And also, we are not getting the number of -- number of subscriber are not increasing because we are spending almost INR 46 crore per quarter on advertisement and business promotion. But the number are static, almost static, not the 2.6 lakhs are the constant -- the same numbers are there. So what are the other plans we are taking to increase the number of subscribers?

Yes. So you're right in terms of marketing spend. Actually, as I said in many times, actually, the increased marketing spend was actually not required for the category -- of this category or in terms of the revenue side. Today, in a way, we are forced to increase the marketing spend. As stated in the last probably a couple of calls before or many times in the past as well. If you look at the category marketing spend in 5 years, it was only INR 100 crores. And from INR 100 crores, the marketing spend has almost touched INR 400 crores. So has it increased any dynamics for the category, no. It's a more of every player just took their marketing hoping to gain the marketing share for other player, but it did not happen net-net. So -- but today, yes, as a leader, we have to step our marketing spend when others are increasing marketing spend because if you don't do that, that may have an impact on our -- the long-term value ratio. So that's why we had to -- we are increasing our marketing spend. So in terms of growth, yes, the growth actually comes from better executions or maybe launching new initiatives or new products, which you continue to do so. We are like launching Jodii.com, we are now looking at launching luv.com. So these are some of the things we are doing to drive the growth while continuing to figure out ways of driving the conversion of the free profiles in the existing business as well. Yes. So this category on current -- this base is growing at certain percentage in terms of profiles and the conversion is growing -- while remaining at same percentage, the growth was largely driven by, yes, some of the initiatives also.

Sir our marriage services, the wedding service segment is making loss. That's good -- that's okay. But sir, event management is a very growing business all over the India and people are spending a lot of money on the wedding. Why this segment is not growing from the Matrimony?

Yes. That's the thing. See basically, it's -- interestingly, this category wedding services, it's a multiple service providers are part of the wedding services. And look at where the people need help, people need help in some other categories, like do people need where they largest spend on wedding, it's things like jewelry. Do people need any help on the platform that's not required. And the things like -- other things like some of the things are properly integrated. When you go to a place -- everything is offered in one single player. So some other category where it is completely non-branded like [ talking ] services like, say, photography or make-up artist or mehendi where it's a non-branded player where people may need help from the brand to identify service provider. But large part of spend, it's gone the other way around, it's a contra -- where they don't need -- it's be the jewelers or apparels or other things. But definitely, venue is one of the categories, we see that there is an opportunity as well. So yes, we are also -- I see probably we are also understanding that, okay, that is the customer need help in this category where you can monetize. These are some all photography, makeup artist obviously. While the overall wedding is -- it is not that the lot of money is going on that category. The money going on caterers or venue and all. And venue and all, we are not in the full service provider. We are only the platform to generate lead for the mandaps. So yes, it's a category, if there is an opportunity in some other segments where you have to get into whether full service or maybe to get the value of the service, where you have to play differently. So at this point of time, you are just focusing on getting the base platform where you want to put someone use this platform to get some other service, like the mandap or photo or other things. Also get the best business model, and we need then we can figure out how we can add value in the process we can get a share of some wallet and all the things. So yes, while the opportunity is there in terms of, wedding is a big category and other things, at this point in time, we are just focusing on getting the base platform, right, and still yet to figure out how we can get the share of the wedding expense. So yes, actually we've not figured it out or are not -- are yet to work on it I'll put it the other way.

So sir, when -- that segment will achieve the breakeven because we are losing the money on that segment. Our revenue is less than our segment results. So we are incurring the more money to get some revenue.

Yes, yes. So I think that we are definitely able to bring the cost. In fact, the plan was to make it happen soon. I think definitely, sometime next year, we should achieve the breakeven actually on the current form and factor.

Okay. And sir, our core business, if we exclude the other income from the top line, then our core business is making only -- the PBT level margin is only 6% to 7%. A company well established, online presence, having the many websites and so many persons or so many subscribers is making a 7% PBT, I think it should not be the -- at least double-digit PBT level?

Yes, definitely we'll look at -- as I told you this year, it's because of the Google, you may know that the Google, the tax issue, which we've been fighting. The Google early this year is charging that all the companies globally or in India offering business services asking companies to either adopt Google billing payment system, pay 15% of revenue or 11% of revenue if you use other payment gateway. Literally Google want to tax companies. So that really affected our profit margin this year because as I told if not for the Google billing tax on a quarterly basis, which it started early this year, our profit margin every quarter have been another few hundred basis points will be more actually. So that way yes, what you're saying that we're actually because this year is something this has happened which we are fighting that case actually.

But are the Google charging to all online companies or only to the Matrimony?

No, those companies who are providing digital services, that includes the content like matrimony companies or dating companies, companies offering a digital concern like -- media companies and gaming companies, which excludes the company's offering e-commerce companies or food delivery companies. So in fact, the CCI given the order also saying that Google has been abusing the monopoly, charging -- want to charge and all. But still, Google is trying to do it differently. That's the case we've been fighting also. So it is something like globally it's been happening, many companies across the world fighting. We are also raising our voice, how this is going to affect Indian companies, start-up ecosystem, how government is going to lose its revenue because of this. It's all big implications for the country and the ecosystem. So because imagine some taxing companies wanting to pay 11 percentage or 26 percentage revenue just because of the entire app download happening from the Google Play store. So without providing any additional thing, just want to charge companies which is, obviously the monopoly which we've been fighting. Lot of companies joined this fight.

So, sir, that Google charges are accounted for in the current quarter expenses or...

Yes, yes. We have -- we are paying some money, accounted some money. So that's the reason, if not for the provisioning and the money what we paid to Google, the profits would have been 300 basis point profit would have been more actually. It's a provision. Yes. That's the reason our expenses -- other expense have gone up. So if not our other expenses, we've been -- actually, this year the profit margin will be like much, much higher growth. While the top line growth was something -- profit margin would have been, very good profit growth this year, yes.

Sir, last question from my side. Can we use the funds available for the acquiring any event management company who provides the wedding-related service like destination marriage, catering, photography and other all things, all things, the decoration. So event management is a very growing business and people appoint always -- even those small person appoint event manager for their kids marriages. So can we have any plan to acquire any event management company?

As a company, with the [ internet ] platform anything we'll do, it should have the pan India thing or we should be able to benefit large number of users. We don't want to be one wedding planner in doing, say, 10 weddings or 20 weddings in 1 market. So as a company, we should look at always the scale and size, something which we're able to make it available across India. So it didn't mean we do -- buy another wedding planner there's nothing unique we're able to bring to table. So as a platform, you should be aware -- you should be able to offer something unique, differentiated and company value proven to customers. We should not be just another wedding planner. So we had -- we'd rather be a platform company [indiscernible] company value for customers or a better than platform definitely value a lot for benefits. So we should not become a full-fledged service provider or one local service provider, that doesn't do much good to the brand actually.

The next question is from the line of Pulkit Singhal from Dalmus Capital Management.

I have a couple of questions. The first one, you had actually done a proper app refresh and a lot of efforts in the last quarter. We haven't seen any impact of that in any of kind of the paid campaigns, et cetera. So can you talk about how that might have changed things for you even if it's from other metrics or engagements that you're tracking?

It's -- in terms of the new app because it's moved to a better platform with integrated platform, the ability to launch things across the platform in a simultaneously way. I think that's one of the significant change that we have brought in. So we have a desktop. We have a PWA. We have Apple and the Google Play Store. So what is about the review or what you've done. So that's one of the changes we've brought in. The second thing about the look and feel of the app, if you want to bring the freshness and the navigation. So these are the things what you're able to achieve with the launch of the new apps. As for '22, this kind of launch and involving all the multiple platform, it had a small, small -- at the end of their settling -- some tethering -- here and there we had some tethering issues. So by and large, we address those issues and things have come to a stable level. Now this gives the ability to launch things in a faster way and also simultaneously launch on all the platform. Have we really got the benefits of the new platform yet? No, not yet because the new platform gives the flexibility to launch things, do lot of experiments. We had to get into those things actually. We are still -- we are working on some of the pending things. Probably the end of this quarter, we believe we'll be able to address those -- some pending enhancements will be done. Probably -- or maybe next year, we may be in a position to execute, experiment, then you may see the benefit of it. At this point of time, we launched integrated platform, stable, good experience and the tethering issues is what we have fairly addressed.

Yes. I mean, we have talked about the 5% to 6% kind of revenue growth. My understanding is that probably Shaadi is growing a lot faster. What is your comment on that? How are you tracking that space? And how are you planning to deal with it?

So we don't know because we've been growing, it's not 6 to 8 percentage. That's the kind of growth. There are quarters in double-digit growth. It's varied from -- talking about last 3 quarters growth. So for us, yes, if you look at the year before, you had double-digit growth, it is effective. So it depends on the year and the certain segment growing at a faster pace compared to other bigger and [indiscernible] line of business offering product. Since we don't know the competitive data I'm not in a position to comment on it because we don't know Shaadi number. So we are only three player by and large. So we know that other player number and all the things. Yes. So I'm not in a position to comment on it because I don't know any information about the Shaadi.

Okay. And what are the 2 or 3 initiatives you're banking on for revenue growth next year? I mean you talked about luv.com, but my understanding -- if my understanding is correct, that segment does not provide too many revenues that it impacts profitability quite a bit. If we look at the dating apps and all they've been doing. And that is one reason why you never wanted to get into it. But then how do we see the impact of that? And if you can talk about any initiatives that you are optimistic on that will drive revenue growth.

So that's one of the initiatives. While we are not a dating team. I think one thing about that people have one big question about dating site. You are not pushing the dating site. In fact, we're not into dating thing. So which -- we want help people to find meaningful love. I think our quotient is different, our offering is going to be different. We believe that we can create a meaningful size, but we don't know. So only by launching, only by experimenting. It may take a couple of quarters for us to even to get a sense of because you have to invest for a couple of quarters, get a sense, understand. So we're investing for the long term. So honestly, it's not that -- that's one of the initiatives that's going to help us to grow, but I don't know how much of growth is going to come. Yes, you're right that dating sites in India have not grown much. But we believe there's space, there's opportunity on a serious relationship. We don't know how much it can become an order. But it's not that the only initiative we are banking on for growth. We are looking at some new initiatives plus also we have plans to grow in the existing businesses, which you are looking at. The one thing that you've seen that Elite Matrimony. We set up in the airport. We have the -- today, Elite Matrimony kiosk in few airports. We want to increase the visibility of the Elite Matrimony because there are rich and affluent people. We feel that segment can possibly can grow better. So like that, we are looking at among the existing businesses, what are the things we can do to drive the growth. So can you set up more retail outlets, maybe other initiatives, we are looking at various possible things where these initiatives who can add to our growth actually. So yes, the plan should drive growth in existing business plus launch new businesses. We believe the combination of these things can help us to grow better.

And are you open to the idea of acquisitions in the matrimonial space. My understanding is there might be certain acquisition potentials out there? Are you actively looking out or not?

Today, we don't do see any meaningful player up beyond the limited or the pan-India level a few players. It's nothing. No, all the regional players are very marginal. And I think where we see that we need to acquire at this point of time.

This whole Google issue, I mean, I understand and while the court case will take its own course. I mean, ultimately, we are paying almost INR 20 crores extra per year for this. Why haven't you yet experimented in a different way to kind of lead the subscribers to a different payment platform, even in the micro market yet and try to see if we can save on this? I'm just trying to understand the management thinking around this that why haven't we yet experimented around that?

I know, it's a valid observation. We need to figure it out what is the best way, whether change our model or whether maybe like something what Netflix and all that. We have to see what is the friction, what is the benefits whether plus and minus, we have to do some experiments. So we're looking at various options, you are right and see whether we can overcome the challenge beyond this legal case. Yes, you are right, yes.

And on the costing, if you can just give a sense, I mean, so A&P cost is obviously INR 180 crores roughly here and there. But given that you're also planning to enter some newer segments as you talked about is -- are we expect -- should we expect that this will go up because you will be investing behind the new launches, et cetera? Or how do we see this next year and going forward?

There may be some increase, obviously, there is initiatives. Also some growth will happen. So we have to see whether we can be able to overcome the Google challenge, that will help us to get that -- the money what you are talking about, so that will help us to get that money back. Yes, we have to work it out because it's still too early for us because of product is still in working progress. We're not really worked on how much it's going to cost or not. But I do [indiscernible] not in a position to comment on that one. Yes, that's the additional increase in marketing, but how much we have to invest we've not really worked on it yet.

Just that many of these initiatives will take shape in FY '25. So just in the coming months, we'll be entering our planning and budgeting cycle. So when we declare our results in May, we'll have a better view on all of this in terms of where we see FY '25 because it's not going to affect Q4 as such, some of the new initiatives like luv.com.

Okay, okay. And any one-off in the employee cost or because of it, it's down or something that we'll see come back. Any comments on that?

Yes. So the employee cost what happens is, one is at the quarter end, there could be some headcount plus or minus because like you know that we manage about 1,000 people plus at a very low level. So attrition can happen at the quarter end. And again, it's like a plus and minus sort of a gain. . Second is the things like -- which are a little variable in the employee cost, like the variable pay, other things that make up like gratuity provisions, they're all trued up every quarter, and that can also have a little variation quarter-to-quarter. But broadly, it's in a range bound thing. So it's nothing major in terms of one-off costs.

The next question is from the line of Anuj Sharma from M3 Investment.

Two questions, really. One is in terms of relevance of the profile, how has that changed in terms of how the active profiles were a couple of years ago? And how relevant is the profile today? That's question number one.

Yes, please go ahead, yes. Do you want to ask other questions as well?

Second is in terms of customer satisfaction. So how are we tracking the customer satisfaction? And like suppose we had a parameter of 1 to 10, where do you think we have reached and where is -- what is the aim we have for customer satisfaction?

Sorry, I missed -- can you just repeat again sorry, it was kind of -- I missed somewhat...

Yes. The second question is on customer satisfaction I was just trying to understand what is the metrics we are using to understand the customer satisfaction? And where do we think we have reached in that understanding?

Yes. In terms of the profiles relevance, we continue to look at the profiles and continue to optimize to ensure that we are getting the right -- relevant profile. It's not that acquiring profile for the sake of acquiring profile because in the Matrimony realm, it's important to acquire the profiles who are serious about getting life partners. Otherwise, today, there are platforms, you can get the profile acquisition because it's important to ensure that we provide a very safe and trusted platform or getting only those people who are well intended for matrimony. That's why it's not about part of the profile acquisition, always the right profile acquisition has always been a thing. So there is always been growth in -- if you look at the 3 years ago. But yes, there are -- here, we had good the growth in profile, but post COVID we had an impact on the profile growth. So I think some of the profile are growing at only marginally, okay, at the relevant profile thing. In terms of the ratings. Ratings, definitely customer satisfaction is very, very important. We track based on many things be it our apps or rating or customer comments. It's continuing to get better only. So we continue to make progress, continue to make improvements. And so that way, there's always the focus on driving the better customer experience in one of our focus areas. We listen to customers, their feedback, continuing to improve our product based on the customer feedback, customer think so.

Yes. See, in terms of relevance of profile, I'm sure you would have heard. But one of the common observations with a lot of profiles which seem to be active have already moved on. So how do you ensure that the actives which are on the portal are really the ones who are interested. And how do you curate the data? So I am just trying to understand the curation engine. How is the curation changing rather than acquisition? So how is -- let's suppose 3 years ago or 5 years ago...

Yes, understood. See Basically whether a customer -- when a customer is active, fine, they've not found a live partner, rather than one set, there are 2 things. When the customer themselves delete their profile, they found a life partner, they delete their profile, they move out. In case the customer is not active for whatever reason, while you create a profile, we also purge the profile beyond certain time frame. We don't keep the profile beyond a certain number of months if the customer is not active. It's not that someone created a profile 3 years ago, do they continue to be on a Matrimony platform? No, if they are not active. So if they are not active beyond a few months, automatically their profile get purged, it won't be part of our database.

Okay. And just on customer satisfaction, is there an internal number which we track and you are able to objectively analyze the satisfaction level, I suppose 3 years ago, 2 years ago, today, is there a number which is how do I understand? Or how do you understand our customers more satisfied earlier versus today? And that's a feedback loop, which helps to improve and get better. So how do you track that really?

One thing globally the demand of customers -- the customer expertise will continue on the rise. So I think that is the case everywhere. It's not that the kind of service what you people got used to 10 years ago, now the people, now people definitely want better and better service. We also understand as an organization we have to continue to improve and provide a better service. That's something we track very, very closely. Customer satisfaction, customer feedback and so that way , yes, it's continued to get better only. So is there any number per se I can give? No, I'm not able to put a number to it. However, I say that definitely, that's one of our focus areas. All I can say, we are definitely getting are improving on our customer satisfaction. But there is no number I can give, specific number at this point and we got, let's say, in the scale of 1 to 5, got 4, now moved to 4.5? No, that's not the case. Meaning I can't put a number, but satisfaction level has moved because we continue to make product improvement, process improvement, every area we continue to make progress.

The next question is from the line of Ankur Jain, an Investor.

I have a couple of questions. So the first one is from the outside to us, this space looks very promising with a large, unmarried population and smartphone penetration and online adoption of category. But somehow the online matrimony space showed very slow -- has shown very slow growth in the category expansion itself. So what challenges do you see? I mean why isn't the category growing faster?

Yes. See, they see that, because this category is being there for long years, the online matrimony category is hardly known. So the people -- this category has been growing probably around maybe 5% to 10% growth. So between the current -- the way we have been operating on that. So either we have to either work on the ways to convert from the profile acquisition, you're operating up at a certain level of conversions, we have to maybe continue to experiment or take the conversion to a much better level so that the volume conversion can move up or identify our ways to get more profile acquisition on either the top level profile acquisition you need to get better or the conversion need to get better or probably identify the initiatives you can help us to grow better. So Yes. Yes, there are challenges. It is the way that's been growing because of the certain constraints. But however, we are taking some steps. It's not that this category -- the profile acquisition has been growing at a phenomenal rate. It's been growing at the marginal rate. I think that's one of the challenges we have in this category.

Yes. And all 3 players, they have spent amounts of money on marketing and advertising over the last few years, but still the category hasn't expanded. So marketing is definitely not one of the reasons. I mean there is huge amount of advertising happening.

Yes, you're right. The marketing, as I told it's -- we're spending more than what is because of the competitors stepped out of the marketing. Otherwise actually is more like instead of spending INR 100 suddenly everybody wants to spend INR 500. We have to resort to that, the increased marketing spend. . So net-net, has it really benefited anybody for that matter significantly? Yes, here and there some percentage point moved up in order, but not really helped anyone in order. It's a more of -- I would say the media companies are benefiting out of the increase in marketing spend, or the company like Google, but that's a nature of the industry at this point of time. We have to increase the marketing spend to manage that increased competitive activity. So yes, there are -- so rightly said, yes, we need to figure out either on the -- not figure it out, we are taking them no doubt about it to drive the growth. But just because of increased marketing spend, I really got more people to come into online matrimony significantly, the kind of growth in the marketing spend as a result in the kind of growth on profiles acquisition, it is not the case. It's growing at only certain pace and will continue to grow at that pace only.

Right. And in your experience, how have the other Internet-based ecosystems like the online job market and other systems, how did they gain adoption in the Indian context?

The think is that unlike the matrimony business, it's a peculiar business. It's a onetime in a lifetime. So it means the customer tend to stay for 1 year. Okay? Yes, when you say 1 year, obviously, the people prefer our brand, that's the advantage we have. A lot of people come to us because they know the brand, that's the advantage we have. So no matter what you told last 24 years. They've never been a degrowth in our business year-on-year, but the growth may vary from maybe 10%, even there are 40, 50% growth also in the early days. The thing is that the people stay for 1 year or 2 years. It depends on maybe some people like 3 months also. Unlike other businesses, there you are talking jobs and all, once you sign up with a customer, the customer tend to, by and large, they renew the order. It's probably lifelong to large extent also. I think that's in between but obviously the volume of the number of customers signing up, millions of people are signing up, but this India is still a large opportunity. There are 60 million people, only maybe around maybe 10 million, 15 million -- 10 million. People are coming to online, probably that's the reason we're launching luv.com. We are continuing to figure out what are the other ways, there are different set of people who have not come to online matrimony platform to come and experience the platform, our services so that you can connect better. So matrimony business is large B2C compared to the B2B business in the way that once you acquire a customer, yes, they can continue to stay in order. Yes, it's a different type of business. There are advantages, there are challenges.

Right. Yes. So finally, I would like to share one pain point. I spoke to some of the users of online matrimonial space. So one pain point which they shared with me was that once a subscriber signs up and after a while he finds some -- after a while, he or she finds a prospective match, they want to spend some time meeting and exploring, they want to take their relationship forward. And sometimes, this takes a few months. And some of those cases, they decide not to take it forward and then the process starts from scratch. If somebody has taken a subscription for 3 months and then he or she exclude a relationship, which took a couple of months, and they come back then and all this while the subscription is still active, and they have to renew the subscription if they want to start it again. So they feel that the money has gone waste. And then there is inertia to renew and drop off. So what about this pain point? And how do we address this pain point?

Actually, sometimes I see the other way because for the money customer investing, the benefit what they're getting, it's too precious. If someone can't put a price to finding a life partner. Today, millions of people finding life partner, they would have paid INR 5,000, got a life partner. And sometimes people have spent crores of money on wedding. But for the most important thing of the wedding is spouse, where the people have to spend INR 5,000, or INR 10,000 to have life partner, where you spend like crores of money or lakhs of money on various other services. So actually, sometimes we have to probably make do to understand, look, the money what they are paying on matchmaking is like much more precious and much cheaper compared to what one can pay for any services in the world. Kind of money invest on education, clothes, this, that and all those things. Yes, life partner is just -- that's why I see it in all...

Yes. No, I understand and appreciate your point, but we have a paradox here that even though people are spending crores on marriages, but still the profile growth and the paid subscriber growth in this online matrimony space is very tepid. So we clearly see a paradox in play. And this is a pain point, which what I'm sharing is something which I spoke to a couple of users and they said, yes, I think this is definitely a pain point. And rather they shared this as a pain point.

Actually, it's not that -- yes, please go ahead.

Yes. So just one thing what struck me was that like we are using -- I'm a subscriber of Tata Play. And they have an option where if you are going on a vacation, you can suspend your subscription for 15 days and then your subscription gets carried on for whatever time that much additional time. So if you have stopped the subscription for 15 days, you have paused it, you can resume after 15 days. So have you thought about the similar pause option...

Yes. Majority of the business doesn't work that way because it's very difficult because imagine if you have kind of a Spotify, okay. I watch music one day, I don't watch music one day, so maybe subscription doesn't work that way. It's based on a tenure, whether how much you use it or not use it. I think that's the subscription model. While I appreciate some of users [indiscernible] but you never have this as a challenge in terms of people -- while you talking about the overall subscription thing, actually, today, there are millions of profiles. In fact sometimes, there are challenges. Look at 10 years ago and 5 years ago, today there is 4 million, 5 million people on the platform. So there are enough of more matches. In this case, they talk about someone did not work out, yes, that's a chance to take life partner may or may not work out. So giving you pause, come back, this kind of thing doesn't work out because of the nature of the business, nature of the things because otherwise what happen the person can contact all the matches in one single day, okay, take your pause for another 90 days and come back. So it's a different to business model or globally, maybe I'd say 99% of the business are subscription business, they work on the tenure, not based on the usage and all. So we prefer to operate this way. While I understand there are some users who may be not happy with that and majority of people are, and there are millions of people are getting married in our process. Yes, that's a different problem. Yes.

No, I just thought because there is already a subscription business, which has an option like this. So I just thought I'll highlight this to you and maybe you can think about it.

Yes, definitely. I appreciate for all the things, but, that will put a lot of complexity on our technology. While we understand the user has that expectation, but yes, there are -- the practical difficulties also that will put burden on the system actually because these are the practical difficulties what they will have.

Thank you. Ladies and gentlemen, that's the last question. I now hand the conference over to the management for the closing comments.

Thank you so much for your interest and participation, and we look forward to speaking...

Yes. Thank you all for your participation. In case you have any questions, please feel free to write to us. Thank you.

Thank you, members of the management team. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.