Yes, thank you, sir. Good evening, everyone. I hope everyone is safe and healthy. On behalf of Ambit Capital, I welcome the management of Matrimony, represented by Mr. Murugavel Janakiraman, Chairman and Managing Director, and Mr. Sushanth Pai, Chief Financial Officer. I hand over the call to Mr. Murugavel and Sushanth for their opening remarks. We shall move to the Q&A.
Okay. Thank you, Vivekanand, and good evening, everyone. Hope all of you are continuing to stay safe and healthy. I'm very happy to report yet another good quarter for Matrimony with an all-around performance and delivering five consecutive quarters of double-digit year-on-year growth. With the new footprint in Bangladesh and a new Kannada brand and family called Jodii, J-O-D-double I, in matchmaking, and also the integration of ShaadiSaga into wedding services businesses, we are opening new frontiers for our growth. These new initiatives, combined with other ongoing improvements, will help us have a better quarter four. These initiatives also demonstrate our focus towards executing our strategic priorities efficiently and accurately on growth. In quarter two, on a consolidated basis, we have achieved a billing of INR 106.8 crores, a growth of 1.6% quarter-over-quarter and 110.5% year-on-year.
Revenue was at INR 110 crores, a growth of 4.3% quarter-over-quarter and 17.9% year-on-year. For matchmaking, the key highlights are as follows: In quarter two, billing was at INR 106.1 crores, a growth of 1.3% quarter-over-quarter and growth of 10.3% year-on-year. Revenue at INR 109.2 crores, a growth of 4.1% quarter-over-quarter and 17.8% year-on-year. We added INR 2.2 lakh paying subscriptions during the quarter, a growth of 4.4% year-on-year. The average transaction value for the matchmaking business was flat quarter-over-quarter, but increased 5.1% year-on-year. We continue to track the impact we create for our customers.
We're happy to state we have created 28,000+ success stories in quarter two. Now coming to the marriage services business. On September 15th, we completed the acquisition of Boatman Tech Private Limited, promoters of brand ShaadiSaga. We are now working on integration to enable the brands to become our number one in wedding services brands pan-India. Revenue for the quarter was INR 0.8 crore, a growth of 41.2% quarter-over-quarter and 35.1% year-on-year. Loss in this quarter was INR 1.5 crores as against INR 2.1 crore in quarter one. Since the consolidation was only for 15 days in this quarter, ShaadiSaga's contribution was significant in the last quarter.
On the billing and revenue outlook for quarter three, matchmaking billing is expected to grow at double-digit year-on-year growth due to some business reasons. However, we expect a double-digit year-on-year growth on revenue. Wedding services expect to grow double-digit year-on-year, but on a smaller base and due to ShaadiSaga consolidation effect taking effect for the third quarter. Loss will increase from quarter two levels due to ShaadiSaga integration. Now let me pass it to Sushanth to comment on the key profitability metrics. Over to you.
Thanks, Murugavel. Our EBITDA margins for the matchmaking business in Q2 have improved strongly to 29% from 27.7% in quarter one and 23.7% a year ago. Marketing expenses are at INR 39.9 crores as compared to INR 37.3 crores in quarter one. Excluding marketing expenses, our margins in matchmaking are at 66% in quarter two as compared to 63% in quarter one and 60% a year ago. On a consolidated basis, our EBITDA margins in quarter two are at 24% as compared to 21.6% in quarter one and 18.8% a year ago. On an absolute basis, EBITDA has grown by 15.5% quarter-over-quarter and 14.5% year-on-year. Cash rate is at 24.5% for the quarter.
PAT, profit after tax, excluding MatchAstro, which is our associate company, is at INR 16.8 crores, a growth of 19% quarter-on-quarter and 59.3% year-on-year. Share of loss from our MatchAstro is INR 19.9 lakhs. Our operating cash generation for the quarter has been robust at INR 21.6 crores, and our cash balance is at INR 304 crores. ROCE is at 28%. On the outlook for quarter three margins, we expect EBITDA and PAT to grow double digits on a year-on-year basis, but expect it to decline on a quarter-on-quarter basis due to seasonality, newer expansion and increase in marriage services losses due to ShaadiSaga integration. 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. Over to you, Vivek, for Q&A.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star and one. First question is from the line of Prakash Kapadia from Anived PMS. Please go ahead.
Yeah, thanks for taking my question. This is Prakash Kapadia. I had two questions, you know. As we are seeing vaccination and unlock happening across the country, how do we, you know, look at some of the OpEx costs in the second half of the year? Obviously, ad spend with revenue growth has come down as a percentage of sales. Can you give some color on, you know, the other operating costs? Secondly, you know, if you could highlight some of the productivity measures, where are we in the journey on the employees? You know, what kind of targets have we set in terms of revenue per employee or profit per employee? One directional question. You know, in India, the matchmaking, online matchmaking market is at such a nascent stage, you know.
What's the intention of, you know, scaling that outside India as of now?
Okay. Thank you. Let me respond to the questions. First one on operating cost. The operating cost for us is primarily the office infrastructures and some of the running costs. Since the country is kind of opened up and the associates are coming to office. As far as the rental and the employee cost concerned, you know, whether people are working from home or otherwise also that's continuing. Even the electricity and all, that started increasing from quarter two onwards. Because we started functioning because we had a second wave of COVID in the second June. You know, Q2 is more or less you can assume that the costs are now almost back to normal.
Maybe some increase may happen in the Q3, but however that will be marginal because we have been operating kind of more on a full-fledged basis from quarter two onwards. Except, you know, few people continue to work from home. We don't see that number becoming the full 100% from this quarter. That may happen possibly next quarter. However, those numbers are very marginal. In terms of OpEx cost, maybe only slight increase can happen on account of people coming to office. However, we may expect some costs going up on account of us migrating to cloud, Amazon cloud. We see cost increase in quarter three, but again we expect that to fully happen in quarter four onwards. As far as the ongoing operation, the impact maybe will be marginal in this quarter.
When it comes to the productivity per employee, again, we don't have that specific, you know, the per employee target. However, we have various calling segments. You know, it's not that a telecaller or relationship manager are working on a single segment. There are various segment, we have the various benchmarking. We continue to drive towards benchmarking productivity. Let me give you an example. We have a fresh revenue customer and subsequent payment as well as renewal.
Right.
Various benchmarking for the segments, and we continue to drive those benchmarks. More on the conversion front than absolute numbers, because we continue to also look at increasing the ARPU also. For us internally that we continue to look at the ways to improve the productivity in terms of conversions mainly.
Okay.
In terms of growth plans beyond India, definitely we are looking at the outside of India as a growth opportunity. We have BangladeshiMatrimony now which we started the operations. We have the team and everything in place. We have not commenced a full-fledged operation on account of some of the payment gateway integration, those things are happening. We expect the full-fledged operation to start probably maybe sometime, maybe next month. With respect to other countries, we are looking at Sri Lankan opportunity. We are working on the setting of operations there. Beyond Sri Lanka and Bangladesh, we are also looking at MuslimMatch. We have muslimmatch.com. The matchmaking service for global Muslim. It's in testing, which we decided to grow this area as well.
We actually look for opportunity beyond India, both in matrimony space and niche segment. We showed you which we are looking at those opportunity as well. We are not only looking at India, we are also looking at outside of India, both in the matchmaking space as well in the matrimony space.
Right.
Yeah.
You know, if you could just give some color on, you know, any change in consumer behavior because, you know, COVID was one-off kind of an event. Are we seeing, you know, more traction? Is it now easier for conversion? Is it more difficult now things are mobile and people are moving out? Any major change at a consumer level in the current market?
We have not seen any significant change. However, you know, during the COVID time, we saw an increase of number of people signing up. It sort of become a sort of uptrend because generally when people are at home and people who otherwise focused on their professional careers, now they visit to kind of get married. We saw the slight appreciation. Now those things have sort of come to a regular level. I think we see that happening.
Thanks. That is helpful.
Thank you.
Wish you all the best.
Thank you. Yeah.
Thank you very much. Next question is from the line of Mohit Motwani from HDFC Securities. Please go ahead.
Hello. Thanks for the opportunity. I have two questions. One is on the employee expenses, which have come down from about INR 34 crore in the first quarter to about INR 31 crore. What is the reason for this decline? That is my first question. Second question is on the paid subscription profile. They have remained almost flat-ish until the last quarter, and we are doing about INR 40 crore of advertising expenses, right? We are running at an annualized run rate of about INR 150 crore-INR 160 crore, and that has been the target. Do you feel that, you know, you'll be planning to increase these advertising expenses in order to chase growth or the focus will be always on profitability, you know, rather than growth? What I just wanted to know your thoughts on that.
Thank you.
This is the employee cost. Yes, it has come from INR 32 crore. However, we expect the employee cost to, you know, start moving up from quarter three. In Q2, because of some reduction on the people side, some efficiency and some reduction has happened. However, that should be expected to change from quarter three onward. In terms of marketing cost, it will continue to move up. So we are at, you know, almost INR 40 crore. You know, it will continue to move up because one thing that we are opening a new growth frontier as well as also the competition intensity continues to remain high. However, the growth will be only marginal, you know, from INR 40 crore level, it will move up and all. We're not seeing any substantial increase in marketing cost.
The marketing cost is not going to come down. Maybe a slight increase in marketing cost may happen, you know, on a quarter-to-quarter basis.
Mohit, this is Sushanth here. I just like to add on the people cost. One more addition that will happen next quarter is due to ShaadiSaga. In quarter two, we only had 15 days of consolidation. In quarter three, we'll have a full quarter, so therefore, people cost will increase because of that as well.
Got it. Thank you, sir.
Thank you. Next question is from the line of Prateek Kumar from Antique Stock Broking. Please go ahead.
Thanks for the opportunity, sir. Good evening. My first question is on your billing or I mean, I think it's partly answered in prior question, but billing and subscription numbers, active subscription, all of these numbers seems to be very flat-ish in past four quarters. While it was a big jump prior to that, they seems to be flattening in past two quarters. That is showing up in deferred revenues also probably softening while your revenue growth is there. How should we look at it? Another step jump from here is something which will happen or it will be a sort of.
I mean, as you also already mentioned that billing growth in Q4 might be touching double digits because the base will catch up. What happens after, like now we are at INR 105 crore kind of billing, roughly. What is the growth outlook here?
Yeah. Typically the way we see that, you know, so quarter four, normally the best quarter that sets a trend for the entire year. What does it mean? You know, quarter four, we try to more or less, because after that, you know, there's Q2, there is some festivity season, Q3, all the festival, other things impact the business. Once again, so basically we set a new benchmark in quarter four and try to maintain that, the number more or less or try to, you know, grow the number on a quarter-over-quarter basis. The big jump often on a quarter-over-quarter basis, no. But, getting closer to the quarter four, definitely we get, you know, moves to the next level.
We see that in Q4 we moved from understanding that the jump happens. We expect there should be kind of a move happening from Q3 to Q4. We continue to maintain year-on-year double-digit growth. Again, based on October numbers we're talking about, it may be touching double-digit growth. But post-Diwali, we see that the number happening. Based on October, we had somewhat of a seasonality and IPL raging effect kind of impact. However, we still hope that we'll be able to have a double-digit growth. However, on revenue side we'll have a triple-digit growth on the margin.
Basically the business about Q4 will have the accurate benchmark and try to maintain that number or try to grow that number, you know, for the rest of the quarters. That's why still we're looking on year-on-year basis double-digit growth. Last five growth quarters, we had a year-on-year double-digit growth, which is actually, you know, first place and except the Q1 we added, obviously it's one of the quarters we had a good growth because the last Q1 was, you know, a COVID quarter and all. Basically, we are working on the various initiatives, taking steps to grow from that 10%+ to a 15% or 20%. We have initiated, you know, a lot of the new things which are from BangladeshiMatrimony or launch of the MatchAstro apps.
At enterprise level, the plan is to move to a, you know, from 10%+ to. I think we have the. Even this quarter also at enterprise level, we have double-digit growth on the billing as well as revenue side. Yes, we are looking at, you know, various initiative taking us from the 10%+ or 11% growth to a, you know, 15% on the billing side as the immediate priority. Which we are working on. Hope that, you know, something is done at Q3 level or Q4. Basically some of the initiatives will take time to implement and all those things. Basically to answer your question, Q4 is the benchmark. Try to emulate that number or try to grow the number marginally for the rest of the quarter. Once again, focus only benchmark Q4.
That's the way by and large it stands.
Is there something which we should run like over the COVID situation seem to normalize? How is the competitive activity in terms of marketing spend? Has it increased or is it remaining at same level or going down?
Yeah.
Because expenses, all corporates are doing higher expenses now.
Yeah.
Yeah.
Sure. In terms of competitors, the marketing spend remains completely high. However, what we see is that we're definitely able to widen the gap between us and the competitors. We can definitely see this happening. If you look at an absolute basis on the revenue side, we look at it on a quarter-on-quarter basis, we're able to widen that gap. As the overall leader, we are able to grow because such a large player is able to grow, we are able to widen the gap between the players. It's not that, you know, instead of increasing competitors' spend and all that, it's not that the competitors are able to grow much better and all those things. We said we are having a higher base growing better.
Definitely as a company we are able to execute well, we're able to strategize and we're able to prioritize our things. Quickly we are widening the gap on absolute basis. But again, however, the competitive intensity that remains high as the spending is continuing. We don't know how long this will continue. Actually, we think that what we are focusing on, just focusing on our strategic priorities. We are focusing on launching new initiatives. We are focusing on driving our growth and all those things. We continue widening the gap, you know, and hopefully things in the future probably get to know. The company realize that, you know, starting a little bit probably that can change now.
sir, just one last question. You said the normalization of employee expense in ShaadiSaga-led will hit Q3. This will take a given growth into more than 2x 1Q number of INR 34 crore or it should come back to that number?
The employee cost you're talking about. Employee cost is down to level at least at INR 34 crore and all. It will definitely move up from 32 level. Yeah, it may be added INR 1.5 crores sort of thing. Sushanth want to comment on that?
Oh, yeah. It will be higher than Q2 levels. Yeah.
Yeah, definitely higher than Q2.
Maybe, close to a couple of INR crores higher than Q2.
We cannot cross one Q level of cost despite integration of that company.
Sorry, you are not audible there. Can you repeat the question?
I was just saying, still in spite of integration of the other company, you still not cross one Q level of employee cost in Q3.
You're talking about quarter one, is it?
Q3.
Delivery lines are.
Cost will still remain lower than Q1. Because Q1 cost was quite high.
Yeah, yeah. Cost will be, I think, more or less a similar level at Q1.
Okay.
Because the Q2 has taken a hit and we expect probably cost will move back to close to Q1 level.
Q1 was, you know, the employee benefit was at a consolidated level INR 33.7 crores or INR 33.8 crores, right?
Yes.
Yeah. It will not exceed that level.
Sure, sir. That's it from my side. Thank you.
Thank you. Next question is from the line of Nilesh Shah from Envision Capital. Please go ahead.
Hi, Murugavel. I was curious to know why, you know, the vernacular app that we have launched, we're calling it Jodii, and it's not like Matrimony or something like that. Any specific reason for a very separate and a distinct brand?
Because Matrimony by and large, you know, known for people looking for life partner. Again, it's pretty much, targeting the people who are certain level of, particular socioeconomic status or, you know, the people who are higher degree holders, people who can able to use the app in English language. We don't want Matrimony. The people who know the Matrimony, since they're not able to use the Matrimony site for the job application business, positioned toward the segment of the population. We believe that, you know, we thought to have a new name because we are targeting a completely different segment and, completely different audience base. Rather than going to Matrimony, people we don't want the people to think that they're still at Matrimony category. That's the reason, one of the reasons we took a different name.
I think we have thought about the name, you know, so we were able to find a name. J-O-D-I-I, which is, when we start, we can be able to connect really with one of the population what we are looking at targeting. Basically the primary reason is we don't want the people to choose another matrimony site. There are a lot of the players in that's the reason.
Fair enough. Will this app itself become a Pan-India thing in a sense? I don't know if I've understood correctly, but this is currently restricted to Tamil language. Will this essentially kind of become a Pan-India vernacular app?
Pan-India, yes. It's currently at a very early stage. It's 20 days since we launched. It's too early to comment. Yes, we launched in one market just to get some kind of understanding and insights and to figure out how this segment, whether it's kind of further as per our plan. While there is opportunity, it's in its nascent stage. However, if we're able to get our strategy right, if we're able to get our play right, yes, you know, launching other languages, it will happen. At this point of time, we're focused to get the strategy and execution right in one market before we went to other thing. In the future, we will rather the languages which looks very well, yes, that we think we can do.
Share some perspective on the competitive scenario in Bangladesh. Are there other players who are already there? What's the nature of the market? How competitive it is and things of that kind?
It's completely a virgin market, in our view, and so we don't recently. In terms of the metrics, other things, we are a number one player. We are not launching any TV campaigns. You know, we are able to reach a certain scale in terms of number of people coming into the platform on a daily basis. However, we are not able to maximize.
Mm-hmm.
Because payment gateway. Since it's local operations, we have the local payment gateway. We believe that we're able to convert better. Plus now there are payment ways, digital campaign, other things, we're able to grow that, the market. It's probably market ten years behind, like how India was ten years ago, relatively. Mostly no competition, little competition, and. However, again, it's a very early stage, but as far as the competition is concerned. No any serious competition which we need to worry about or not. We are a player, so we are very small at this point in time.
We hope to be able to maximize our presence on the opportunity, being the player with complete local operations and the market is, as I said, probably in our view, it's probably ten years beginning for the.
Last year on ShaadiSaga, now that we've done the acquisition and we've started the integration process, what is essentially the outlook on ShaadiSaga in the sense that any key milestones that we intend to achieve in terms of number of listings and probably today we are in select cities. How soon do we want to kind of spread to other cities and things of that kind, if you can share in terms of what's the outlook there on ShaadiSaga?
Yeah. Basically, with the ShaadiSaga integration, we've become a pan-India number one player. We have a strong reach in South India in terms of number of listings. ShaadiSaga has a very good reach in terms of number of listings in the north and west. Combining both these cities, on a pan-India basis, we are number one in terms of the overall because in a two-sided marketplace, listings are very important because they also build the platform. What I'm looking at, you know, actually, on the listing side will be the largest player, both on the weddingbazaar.com as well as mandap.com. Also the other thing is about increase the number of people because it's a subscription-based business model.
Increase the number of people signing up for our paid subscription because some of the categories ShaadiSaga has a good penetration. Things like, photography, makeup, that thing. Another one, ShaadiSaga has a good reach in some other category like jewelers and some other categories. Basically there is a strong synergy between north and south on the different categories. Plus some of things ShaadiSaga has done a great job in terms of, ring sales, selling and all. Basically, what I'm looking at is the key metrics. Listing is one thing, and driving that into the paid subscription, that is driving more people to go for the subscription package. Third is about building the value for the vendor because it's important that vendor signing up getting the number of leads.
First is number of leads, listings and also revenue. These are the three things are the key metrics. Again, we'll be a strong number one in both the categories. They definitely as I said, starting this quarter, we expect wedding services combining both entities, we'll move on a particular. Our base is small. Again, we expect not only for this quarter, but for the years to come, we expect on year-on-year basis we can grow at a double digit because it's a large opportunity. By combining, we definitely getting some [indiscernible] and we believe that we're able to drive the business well without putting too much of money. I think that's the important thing.
I mean, I assume that given that the opportunity is larger, the revenues for us at Matrimony from marriage services, which is ShaadiSaga, would be a lot higher at some point of time in future versus the matchmaking services. Is that a fair assumption to make? If so, you know, how long would it take for marriage services to basically become as big as the matchmaking side in terms of revenues?
We don't see because matchmaking, you know, we are founder-led core, so we expect that as a brand of Indian matchmaking. Basically the reason for us that the immediate milestone probably next couple of years reaching INR 100 crore. That's something we're looking at. That's the immediate goal and our three-year goal, which hopefully can achieve probably even sooner than that as well. That's a goal what we have. Our vendor wedding service can become, you know, larger, you know, whether it can be INR 500 crore like matchmaking. I don't know. Maybe it take maybe probably a little bit longer. Again, let's first get to the milestone of INR 100 crore, then probably we'll have a better clarity of when we can reach at the similar numbers.
Great.
Unfortunately, as we said, it's definitely humongous. For us, the critical milestone is reaching INR 100 crore, and then we can work on that next set of goals if our proposition is there. Yeah.
Fair enough. Thank you and good luck.
Thank you.
Thank you. Next question is on the line of Kush Goswami from InCred AMC. Please go ahead.
Yeah. Hello, sir. Thank you for the opportunity. I just wanted to understand how is the competitive intensity in matrimony? Are the players getting more aggressive post the second lockdown, or we are seeing few signs of receding?
No, it's remaining at a similar level. It's not either going higher or not going, you know, down at all. It's remained at a similar level as it was earlier. But still remain at, I know that the spend-wise it's still, you know, it's fine.
Do you foresee in your future years that they can come down or they could stay elevated as well?
It's very difficult to say how competitive, you know, today. Through that, as I said, we continue to focus on our growth strategy. I don't know how long this is gonna continue, but however, we continue to invest and to grow our business. Yeah, difficult to say what will be the competitors' move or everything. Even the marketing spend. At this point of time, yes, marketing spend at higher level. It's much more than what is really required outside at all.
If the competition, if the intensity stays elevated or increases linearly, are we going to spend more than INR 150 crore in advertising?
Beyond a point, you know, if the need is there, if there is an opportunity to invest and grow, we'll continue to invest. There's some other market areas, you know, nascent market or investment can either move up. You know, that's important quarter where, you know, investing in the marketing and growing the business. If there's a need to invest, yes, we can invest because we are the only profit-making company. Looking at matchmaking. If you look at our executing marketing or gross margin on matchmaking, it's, you know, two. We're operating at almost 60% gross margin. Including marketing, we are matchmaking almost 80% plus. We still have the potential to invest if we want to. Again, we are trying to balance everything, you know.
Invest meaningfully, manage the competition and grow the business. Yes. Again, there are new initiatives as well. We need to invest to grow the business. If there is a further increase in marketing spend with competitor, if that happens, what is the reaction? Beyond that point, it doesn't make too much money also. We're just only, you know, putting money for the sake of putting it all. We're trying to balance between managing at a certain level and invest where it is required and manage the growth. It's kind of a balance on all these aspects. That's why the opportunity not wanting to put the money.
Okay, sure. In terms of how much investments you're going to do
Uh.
Will they impact our margins?
No, it's going to be a gradual thing, so it won't be significantly impactful. Yes, there'll be some investment. Again, it's at a very early stage. It won't be as substantial at this point.
Okay. In terms of wedding services, how are we seeing things now that we are seeing revenue growth picking up as well and losses also coming down. What is any particular milestones that you would like to highlight other than the INR 100 crore you just pointed out?
We look at one actually next two, three years. At this point of time, we expect starting this quarter we will see growth combining both entities. Again, this quarter the cost will move up on account of the integration that's happening. We'll probably have better clarity on Q4, what is actually the outlook. This quarter the revenue on triple digits, but the losses will increase. Probably it's from, you know, actually the quarter growth on revenue on a quarterly basis. That's what we see. Again, it still is a very small. We need to assess the growth path. We are cautious because integration happening. Next call, you know, we'll get a clear launch growth prospect for wedding services.
However, as you said, you know, the revenue growth for the quarters to come, we see that the kind of visibility for years to come. What kind of strategy the other things are not. Because once you know, once the integration, then we are in a better place to answer.
Sure. Very good. Very good.
Thank you.
Yes, sir.
Next question is from the line of Vivekanand Subbaraman from Ambit Capital. Please go ahead.
Yeah. The question I had was, basically the strategy that we had pivoted to, the strategy of customizing our pricing to drive the volume of transactions, and therefore that was resulting in demand elasticity. We saw this for the last four, five quarters. Was there any change in the current quarter that resulted in transactions not growing so sharply in the current quarter? I mean, I also see that the TPV has gone up in the current quarter, after many quarters of decline. Any thoughts on that and how should one look at this, the billing growth in the online matchmaking segment? Thank you.
Yeah. Thanks, Subbaraman. The volume grew by 4%, year-on-year. It's not a double-digit growth. However, we look at the ARPU. It was at INR 4,400, grew to INR 3,700. Again, compared to Q1, the ARPU is at a similar level. What we are doing on one hand, you know, we are trying to grow the volume. At the same time, we also think that, you know, ARPU also can be driven. Basically trying to balance between the volume growth as well as the ARPU growth. That's what we are trying to do. That's where, you know, we are on the mix of both ARPU growth as well as the volume growth.
We are kind of trying to, you know, do this and we sort of expect it be a mix of volume growth and ARPU growth. However, probably by Q4 when we probably have a, you know, kind of mix there is a better sense in terms of whether the volume or. I think going forward, the ARPU is certain level. We expect the volume, because looking at from year, last year was 4,300 move to 4,700 level for last couple of quarters. We want to maintain at this level. Then from this level, we are trying to kind of continue to grow the volume also. Because last year taken a hit on the ARPU, we probably average around INR 5,000 ARPU, but it comes down to INR 4,300 level.
We want to slightly move the ARPU as well. Basically the strategy is to drive both.
Murugavel, is it possible to give us some color on how your ARPU would be for the various markets? Is it at a very significant discount in the competitive northern market versus your pricing in the south? How have the trends moved in the last six to nine months in these key markets?
Yeah. Definitely the ARPU-wise, Vivekanand , it definitely the south is definitely much higher than compared to northern market. We know that the north is one of the highly competitive market, so and there's a lot of discounts to compete that market. We also try to play accordingly. ARPU-wise, yes, definitely it vary from market to market. We keep our strength in some of the market and try to compete in some other markets. That's the way the ARPU is, you know, kind of playing out. But again, within this segment, we still try to maximize the ARPU of the segment of the customer. We try to do that, you know, across the markets. However, I believe south is a very strong market and ARPU is definitely much higher.
Okay. My last question is with respect to some of the premium services that you have which have much higher ARPU levels. Is that seeing traction now that the economic activity and you know, the unlocking is now underway? Because if I remember correctly, some quarters ago you had mentioned that assisted services and elite matchmaking services were impacted because of the lack of travel or travel restrictions due to COVID.
Yes, Vivekanand . We see that personal services starting to move up and started to grow well.
Okay. Thanks a lot, and all the best.
Thanks, Vivekanand .
Thank you. Next question is from the line of Shubh Joshi from Isle of Wealth. Please go ahead.
Hello.
Yes.
Shubh Joshi. Hello, good evening. Sir, actually, my question is, what kind of competition we are getting in North India, and what are the edges we are doing to penetrate, because northern part is very competitive and we have a very small part of penetrating in northern India.
You know, see the North is the only market where we are not a strong number one at all. You know, we are definitely, you know, kind of we are one of the leaders, not a strong leader as the rest of the market. We have to try various things, you know, continue to improve our marketing spend and to continue launch new offerings. Sometime this year we launched RajasthaniMatrimony, we launched GujaratiMatrimony. We are looking at penetrating the market-wise. We're continuing, if we go to our strategies, continue to execute our plan. However, that market in terms of, you know, we have a player in the market and the Shaadi and Jeevansathi.
It's gonna be a little longer for us to kind of, you know, become a, you know, strong player because we have top players and they both are investing a lot in that market. But as you said, we are continually increasing our marketing spend, continuing to launch our strategies, execute our strategies to kind of further improve our thing. I think kind of growing, especially we have a, you know, kind of, you know, kind of five years to go or, maybe longer also to kind of further increase our market share to become a strong player or strong number one in that market. At this point in time definitely we are again, yeah.
The second question is, sir, so our what the expenses will be? That will be much more in future or it will be segmented or it will be consolidated, our marketing expenses?
No, marketing probably, you know, what we are starting is a considerable marketing expense. You know, with the marketing spend on a quarterly basis, it's certainly going to, you know, grow on a quarter-over-quarter slightly, you know, depends on how the things are going to work out. At this point of time, the marketing spend will be around INR 40+ crore level. That will continue to increase on a quarter-over-quarter basis. Yes, the marketing has a considerable spend.
Okay. The third question is, sir, actually we had started a marriage service. Can you please tell what type of margins we are getting and what type of under penetration we are doing on the marriage services? It's like a B2B services. We are hiring, so the vendors are coming in our platform and they are selling their products. It's kind of a type of IndiaMART as well.
Yeah, it's like IndiaMART. It's a subscription business model. We have various types of vendors from photographers, makeup artists and jewelers, apparel and meal service provider. We have various packages based on the different categories. It's not one single price for the vendor. Because the makeup artists, their revenue per customer is much lower compared to each other. Revenue per customer, they make a lot of money. It depends on the category. We have different subscription models. Yeah, within that there are multiple packages. Yeah, it's like the likes of IndiaMART thing. Just there are customers paying money, but the only thing we get is mainly from the subscription platform. Then only that's in the paying services are paying for it.
The thing is that we have to increase the number of vendors paying for it. With the appreciation, we believe that we'll be able to increase the number of overall listings. That's also able to increase that number of leads which we'll be able to deliver for the paid vendors. We believe that the growth things will do better on the billing side. Yes. This whole model is actually like this. What is it?
What kind of margins we are expected from these services?
Yeah. Margins, you know, it's very cool because this is gonna be in the last matching business because it's still very, very nascent. Because when the business reaches a certain critical benchmark or milestone, then it will start, you know, growing profit. When the business today will reach to the hundred crore level, that will be a profit. When it reaches a few hundred crore level, its margin can be 30%, 40%. Because, see, when the subscription business model is there, unlike matchmaking, because in matchmaking, instead of being at, you know, customers don't stay beyond one year. Still on the matchmaking business scale, we are able to operate at 16% gross margin, and with it almost 30% on the, even the marketing, which instead don't have a repeated customer.
The advantage of the subscription model is that once you get a certain scale and velocity, you're gonna continue to get the existing customer paying for the subscription, and the subscription revenue also. They're paying better ARPU also because it keeps increasing the revenue per customer by adding more services or increasing the price also. To the customers, we will deliver value. We can have them as lifelong customers also. At the scale and levels, the margins can be much higher because that's one of the reasons that today the subscription business, the SaaS business model-based company and all, they're very much better because they have long-tenured customers. Hopefully, the business is the one to reach the scale and size. The margins will be very high, 50%, 40%. We can have very high margin.
At this point of time it's very, very nascent phase. I don't know at what level it become profitable. Other people benchmark under core level, it can become profitable, or maybe earlier than that also. Whether you want to stop at that level or not, because we want to continue to invest because if you're not investing, you know, because there's so much investments can happen in this space. First and foremost, we want to reach a critical milestone in terms of listing and revenue and ensure that it's going in the right direction. We're able to show that it's growing and, you know, kind of scaling up, we want to invest again, wedding services growth and get to the initial milestone of under core in next couple of years. We look at how to take it further from there.
Basically it's under 1%, the growth margins can be very high. We can have the scale. Under INR 5 crore levels, the margin can be 30%-50%.
Okay. Just the last question. Sir, actually, we are opening our matrimony offices. These offices are only on the tier one city or it could be on tier two, tier three metropolitan city or we are opening on the all over India.
You know, we call it a tier one and tier two city. Again, we just opened a set of 4 cities, one in Chennai and one in Pune recently. They are all the tier one cities. Yeah, it's all the tier two cities as well. Not just about how many outlets we are opening, but wherever we see the opportunity, we may open some more outlets.
Okay, sir. Thank you, sir. All the best for the future growth.
Thank you.
Thank you. Next question is from the line of Nikhil Chowdhary from Kriis Portfolio. Please go ahead.
Yeah. Hi, thank you for the opportunity. Sir, my question was with respect to the ShaadiSaga platform.
Mm-hmm.
I was actually going through the platform, and I wanted to understand what would be our strategy on strengthening the platform. Because I happen to come across other players like, say, WedMeGood, WeddingPlz, or ShaadiWish, who also provide similar type of aggregator, you know, the platform where vendors are listed. Do we have some strategy where we have, say for example, a famous photographer who has exclusive tie-up, ShaadiSaga? Or say for example, we have some premium services. Because I happen to come across one startup who is providing a photo distribution service through facial recognition, where you just put your selfie and, wherever you are there in the entire wedding, your photo gets, all the photos come to you, your mobile, through that, just one selfie.
Just wanted to understand what type of differentiation strategy we are trying to implement so that we become the go-to platform where we are having the services that probably customer is actually seeking. It would be another case of competitive platform where we are just competing for the market share.
See, there are a couple of things. One is that any you know digital marketplace so whoever has a large number of you know in terms of the traffic that people are coming for the services and also whoever has a large number of listings. So both are very, very important. Because any B2B there's a big thing here. That's why you know the strength of the B2B depend on these two things. The advantage of matrimony.com if you compare to other players you know they can have that similar kind of business model and they can even try to work on the listings the strength of matrimony.com is the richness of the members who are there or the millions of members who are there. See, today matrimony.com has millions of members.
When the people finding a life partner, this can be matched, you know, can be integrated effectively with the service so we could be able to generate the leads. This is difficult for other players because for them, you know, kind of the cost of listing is okay. They may be able to get it already. Cost of acquiring customer is a bit challenging. For us, you know, we already have the customer, it's more like forward integration. How we are effectively able to integrate because we have done the integration with. We are able to generate good number of leads coming from the existing customers. The advantage of what matrimony.com is the millions of member looking for life partner, they're already with us. We want to find a life partner, we come to know.
That person creates a profile, we know that he wants to get married. If you're able to effectively integrate, we are, you know, without, you know, the cost of acquiring customers is almost negligible. Right? We have to maybe continuously spend money on some, you know, some digital other things will be required. However, majority of things come from the internal matchmaking data. That's the thing we have compared to other players. There's obviously, you know, running the operations, Tamil Nadu and all this. This is kind of difficult for other players. However, you know, platform-wise, yes, we may have a kind of, have a similar kind of platform, but again, we're continuing to work on differentiation, other things, whatever. While at the WeddingBazaar competing with other players in this space, we have mandap.com.
mandap.com in a way that is very unique, and we don't see any competitors in that space. That we are India's largest community platform, consumption platform. With the leadership team in place, we believe this can continue the interaction and continue to kind of grow both on the listing side as well as on the leads and all. It's difficult for other players to grow because of the platform that is constrained by what they have in all this.
Understood.
However, we can't rule out any competition. As we see in the current outlook, we don't see anybody can come close to our wedding service.
Understood. Sir, like, probably once again, so why don't we probably look for some premium services which the other players are not having? Say, for example, just like I mentioned, the photo distribution company that I happen to come across, there are few players in the market. Why don't we look to acquire? Because they are very small, and probably we acquire them at an early stage and try to get their services or integrate it with the ShaadiSaga. I guess the utility of these services are very high because I happen to see them in few of the weddings where people are using. They're uploading the selfie and getting the images directly. Like, wherever they were in the wedding, they were getting images of. They need not actually go through the folder or gallery and something like that.
Yeah. Understand. We will continue to look for opportunities which can strengthen our, you know, core offerings. We invest within our solution and we watch all this stuff. We continue to look for opportunity. Anything, you know, can help our customers, help our offering, we continue to look into those opportunities.
Got it. Got it, sir. That's it from my side, sir. Thank you so much.
Thank you. Ladies and gentlemen, in order to ensure the management is able to address queries from all participants, please restrict your questions to two per participant. Time permitting, you may return to the queue for your follow-up questions. Next question is from the line of Abhimanyu Vola from Growth Capital. Please go ahead.
Hi. Am I audible?
Yes, you are, Abhimanyu. You are audible. Yes.
My first question was actually can you sort of give a ratio as to how much you aim to grow with respect to your advertising cost? If I look at your advertising cost this quarter, it grew about 7%, but billings have only grown by 4%. Secondly, do you track as to what amount of growth is organic?
Actually, I think it's, you know, very difficult to call. Gradually there is an increase in marketing. Some quarter, maybe the Q1, the marketing is sort of we sort of plan. We have sort of reduced it because based on the output qualities are. However, the marketing is on a spend basis, it continues to grow.
In terms of what ways that the market is growing?
Sorry, I just kind of lost the second question. Sorry, my apologies kind of.
Yeah, yeah. What percentage of this growth would be organic? Is it-
Yeah. Got it. Yeah. See, the thing is that, I think the strength of matrimony.com is that, almost majority of profile acquisitions are organic because brands want to build over a period of time. This questions are almost like over 80% of the profile acquisitions are organic for us. However, we need to continue invest behind the marketing because of the, obviously the big and consuming category, because while the marketing spend may not be at this level, it's also the, IT and activity. Yes, I'd say the 80% of profiles are organic. Only today, only probably around, less than 20% of profiles comes through other means, which is digital, other things, but majority of the profile acquisitions are integrated directly to the brand.
Okay. What exactly is your primary aim for these international acquisitions? Is this, are you trying to grab basically your South Indian diaspora in other countries?
It has been always there, because today the NRIs, whether South Indians or Indians across the world, they know these are matrimony services. That always been part of our sort of growth. Yeah, with the expansion in other countries, we are looking at targeting other nationalities. Targeting Indians across the world, we continue to target, you know, definitely NRI. It's a significant revenue coming from the NRI. However, overall level, India is a big opportunity for NRI.
Okay. Thank you.
Welcome.
Thank you. Next question is from the line of Nilesh Jethani from BOI AXA Mutual Fund. Please go ahead.
Hi, sir. Thanks for the opportunity. My first question was on the engagement side around the shaadisaga.com. We wanted to understand what you are doing to basically engage the prospective vendors, say photographer or a makeup guy, to really come to know whether we are an integrated part now, would be able to get more number of leads. What are we doing on the ground level to basically educate the prospective vendors and as well as drive the number of vendors? I believe around 15,000 vendors on shaadisaga.com. How are we planning to grow that number?
Yeah. Basically we are working on integration, Nilesh. Once we've integrated the right partner come and communicate to educate the vendors and make it as integrated platform. That's also presentation. When we're able to once we integrate, we become the single largest player in the wedding services space. We are looking at series of communication that will happen over a period. The ways we'll communicate is through, you know, the email or other forms of communications, calling out and communicating. All this will happen.
How are you trying to actually engage with them? Somebody's email. Are you trying to open some offices at local level, adding staff? What is our thought process over there?
No, it's you know we want to launch as half-baked as possible in terms of reaching the customers because you know the free-of-charge base you know since we don't communicate with customers. We do also call and communicate. We're looking at series of communication. I think that's the easiest thing to do because today you can connect through you know SMS or WhatsApp or email. There are multiple forms of communication possible. I think communicating is the easiest part. Again, with teams who are working on integration at right stage, we'll communicate with customer. Once it is integrated platform, we don't see this as a problem. The thing is we are looking at how to integrate the platform to build enhance the value for customers.
Once we integrate, we'll able to demonstrate the customer is seeing enhanced value because two customers combined together with the strength of Matrimony.com, we will be able to deliver a better value for the people who are taking the paid subscription. The thing is that we need to look at accelerating the number of the free vendors into paid vendors. That's because, you know, we are looking at both the free channels, you know, and also the telecalling. Looking at leveraging both the sales channels to increase the number of people looking for the paid subscription.
Okay. Let me ask in this case, FY 2021 ShaadiSaga did around INR 2.1 crore top line.
Mm-hmm.
We are emphasizing to reach a revenue of around INR 100 crore in next couple of years from the marriage services business. What are the typical low-hanging fruits you think are available for this kind of INR 100 crore revenue in next couple of years?
No, it's simple. You know, we have to convert, you know, the free vendors into paid vendors. That's one of the strategies. This is for makeup artists, jewelers, apparel and these are opportunities we're going through. We're looking at ARPU varying from between INR 10,000-15,000 from INR 10 ,000 to INR 60,000 also. It's a simple thing about increase the number of customers and increase ARPU. Even if it is 7.5%.
Yeah. Mm-hmm.
The test is right.
INR 40,000, how much would we pay?
You know, I don't know the exact number of ShaadiSaga. Assume that, you know. Again, it's a combining. Again, we're not looking only at 40,000. Our thinking about the listings are there, our goal is to combine the entities so it become 40,000-50,000 or 60,000+ listings. I don't know, because once the integration, we know how many listings we can have. We don't see much overlap because our listings are the, you know, spread in south or west and east. However, it's not about that the combined entity become a 50,000 or 60,000 listing. We continue to work on increase the number of listing as well. Because Tamil Nadu as one market alone carries another 20,000+ listing. Because the wedding as a category has a large number of vendors.
We're going to work on both the things. On one end we increase the number of the vendors in the platform. At the same time accelerate the number of free vendors into paid vendors. Both has to happen in parallel.
Got it. One last clarification. You said that if the business reaches the revenue of around INR 500 crore, the margin could be easily 30%-40%. What will be a typical margin if the business reaches INR 100 crore revenue?
You know, again, it's too early for us to say that, you know, so at this point level, yeah, it can be profitable and 30%, you know, not get up. Not in a position to give a clear guide on that.
Okay.
Good.
Thank you so much for answering my questions. Those were my questions.
Yeah. You're welcome.
Thank you. Next question is from the line of Swapna Kamat from Narotam Sekhsaria Family Office. Please go ahead.
Yeah. Hello, sir. Good evening. My question is on our paid subscriptions. They are seeing a nice trend of growth over the last four, around six quarters. Though our average transaction value I can see has gone down and again in second half, it has started spiking up and we have reported a nice growth in the H1. I wanted to understand that clearly it seems that our strategy of discounting in regions like North et cetera is enabling us to gain the market share. What is our strategy going ahead in terms of for this growth in paid subscription?
Should we see this trend of the average transaction value growth going ahead sustaining, and the paying numbers looking into nice double-digit growth over the next this year and going ahead, how do you see this?
Yeah. No, actually that's the strategy, Swapna. We are looking at, you know, drive both ATV as well as paid transaction. We expect the ATV to kind of remain at this level or start also move up, because one thing we see that the subscription services are offering a higher ARPU also moving up. So possibly the ARPU may also go up from this level also. Because we saw around 3,050 ARPU and that. Basically the strategy about discount where it is, you know, required, you know, some segments, some markets. At the same time try to maximize that ARPU in such segments. So basically the combination of driving ARPU and at the same time drive volume is what we are working on it. To refer to the growth, yes.
The last five quarters of double-digit growth, we expect them to continue. That is our guidance and that's what we are taking. At the enterprise level, definitely more to the double-digit growth. We are looking at reaching a matchmaking sort of, you know, the new initiative and other things. Hoping this plan to take it to sort of 15% growth and hope that happens, you know, soon.
Okay. Our paid subscriptions, is my understanding correct, that the double-digit growth is also because of this COVID, I mean, the adoption of the internet and the matchmaking services have improved and that is also helped us in terms of achieving this or is it more related to our discounting strategy which has helped us capture that market share?
No.
Is that a trend, more accelerating now, and we should see it more sustainable going ahead, in terms of the adoption of this, where we can see the numbers, more meaningfully, more sustainable going ahead in terms of the paid subscription conversion related to, related to your listings on the portal?
I think trend-wise, we continue to see that, you know, we take the double-digit growth. We are looking at the metrics and the initiatives that we are taking. You know, the plan is to kind of move from the 10% growth to whether it can move to a much higher growth. That is what we are working on. As far as the COVID, during the COVID period, we saw that, you know, the spikes. But that's not a sustainable level because, you know, people who otherwise would have come at a regular, you know, let's say regular trend. You know, people always know when they reach a certain threshold that have come and take our matrimonial platform.
That acceleration happened because of people who are always delayed, you know, they sit in the platform. So now we think it, you know, it's become more like a regular trend. So I think the delay for the growth has been on account of the, you know, we have moved to a regular level of profile registration. So we expect this to become sort of normalized from being normal to grow at a certain pace. However, the combination of the initiatives we are taking, the strategies and other things, discounting is not the only thing. Discounting and shipment is one of the plans and all that. However, I think a lot on the product side, a lot on the business side.
The combination of all these factors, you know, helping us to grow and which we expect the growth to certainly move up. The thing about the enterprise level, yes, moves now with a combination of matchmaking, which has removed 10% personal growth. We hope that with this, with all those things, you know, kind of start giving results in the coming quarter. We can hope it move to a 6.7% better than that. It's the kind of growth what we have been having.
Okay. Thanks. Thanks a lot, Sameer. The question answered. Thanks.
Thank you very much. As there are no further questions, I now hand the conference over to Mr. Janakiraman for closing comments. Over to you, sir.
Thank you very much, Vivekanand . Thank you everyone for participating in the conference call and asking questions, and thanks for your interest in Matrimony.com. I look forward to staying in touch. However, if you need something, you know, feel free to reach out to me or to our CFO, Sushanth Pai. Thank you, Sushanth Pai.
Thank you very much.
Yeah. Thanks. Thanks, Vivekanand . Thanks, Zair. Thank you all for joining, and stay safe.
Thank you very much, Mr. Janakiraman and Mr. Pai. Ladies and—