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 the Q3 FY24 earnings conference call of Matrimony.com. In 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.
Yeah, thank you so much. Good evening, everyone. In quarter three, on a consolidated basis, we achieved a billing of INR 116.2 crore, a decline of 0.8% quarter-over-quarter and a growth of 4.3% year-over-year. Revenue of INR 117.3 crore, a decline of 3.6% quarter-over-quarter and a growth of 6.2% year-over-year. The key highlights for the matchmaking business are as follows: billing at INR 114.1 crore, a decline of 0.7% quarter-over-quarter and a growth of 5.3% year-over-year. Revenue at INR 114.9 crore, a decline of 3.5% quarter-over-quarter and a growth of 6.7% year-over-year.
We have added 2.6 lakh paid subscription during the quarter, a growth of 1.4% quarter-over-quarter and 10.8% year-over-year. Average transaction value for the matchmaking business decreased by 2% quarter-over-quarter and 4.7% year-over-year, which is 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 fraud 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-over-year.
Our EBITDA losses in the quarter was INR 2.1 crore, down from INR 27 crore in quarter two and INR 3.1 crore a year ago. On the billing and revenue outlook for quarter four, the matchmaking revenue year-on-year growth is expected to be the similar levels of growth achieved in the quarter three. On wedding services, revenue and losses are expected to be 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 two 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 two and 15.9% a year ago. In Q3 of last year, we had a one-time gain on land sale of INR 5.8 crores, so that, one-time gain is not there in this quarter. Tax rate in the quarter is at 22.8% as compared to 24% in quarter two.
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 AstroVision, our associate company, was marginal. Return on capital employed annualized is at about 13.6% as compared to 17% in quarter two. Our cash balance is at about INR 346 crores. On the outlook for Q4 margins, our PAT in quarter four is expected to be at similar levels of quarter three. I would like to end with a 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. We can now start the Q&A. Over to you.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Ayush Vimal from ClearView Capital. Please go ahead.
Yeah, thanks for giving me the opportunity. So in the quarter one 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, you know, 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 3-4 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?
Yeah. So, so definitely that's our, that's our goal and that's our vision. So definitely it's a combination of, you know, growing the existing business. So today, the business has been growing around between the 6%-8%, so we are taking steps to remove the in the existing business, which we are 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 with the double-digit growth on the existing business possibly... But also working on launching new initiatives, which includes, Luv.com, which you already spoke, which you are 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 the quarter four, probably the matchmaking business, we may get into the INR 500 crore run rate only on the matchmaking business. Today, one other thing what I have taken on Wedding Services business is to first achieve the profitability, while that we are able to bring down the cost, and we need to get to the break-even level, then we have ideas to execute to drive the growth in the Wedding Services business. But at this point in time, the first and foremost focus wedding services to get to the break-even level, then work on the ideas which you have to drive the growth.
So to sum it up, basically the growth in existing business and the steps we are taking are new initiatives within the existing business to drive the growth. So the new initiatives, all these things can, we believe, help us to go to the better growth in the coming years.
Sure. So thank you. I just had one more question. So we've seen that the competitive intensity has increased significantly after FY19.
Mm-hmm.
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 two forces was more dominant in increasing the competitive intensity?
The competitive intensity, it's more on the marketing spend, actually, in terms of, you know, you know, basically, the overall the market is growing at only certain percentage. It's a more of the increased marketing spend, net-net, has it benefited anyone? It's not the case. So compared to the earlier market, even up the market spend. Has it helped anyone? No, it's not the case. Look at, you know, Jeevansathi. They spend a lot of money on marketing. Net-net is not really added to any growth in their revenue or, you know. So that way, it's, it's a more of the proper acquisition or the base in the category only growing at certain percentage. While you launch Jodii, and now we are looking at launching Luv.com.
So the increase in market, in my view, it's more on the marketing side. While our it's more of people trying to enter the different market, you know, but no. But as it really happened, maybe it's not the case. And while we are already present in this, you know, North Indian market, and it's not that we are, we have a dominance in South India, we are a 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 market.
Yeah, here and there, some percentage movement has happened, where we could have gained some market, some market have without, you know, here and there, some percentage of loss in some market. But overall, in my view, the mix of the things have not changed. One thing what I've also seen that the small players, probably even, in my view, sort of, fizzling out or, they are no more at the level of competitive intensity. They used to operate at the regional level. So, some other regional players, like what we've seen in ABP Group , in the Eastern market . We've seen that post IPO, based on their marketing offer, you see that they are completely, stop their marketing spend as well.
It's the same thing what you have saw in the number three player as well. The marketing spend substantially they reduced actually. But in the number two player, they still continue to invest on marketing. So that makes us to operate at this level of marketing. While if you reduce the marketing spend, yes, that's definitely move to the profitability, but however, still, we need to work on the top line growth in terms of, you know, either driving the profit or driving conversion, either in the existing line of business or we have to get in the adjacent line of business to drive the growth. We are working on various initiatives. So basically, to answer your question, the marketing spend not change the market dynamics initially, while the people are trying to enter into different market.
Net-net, yeah, some percentage here and there, nothing much has happened.
Sure, sir. Thank you so much.
Thank you. The next question is on the line of Manvar Dhanbhe from Laurel Advisory Services Private Limited. Please go ahead.
Good evening, everyone. 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, you know, 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?
Well, 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, you know, actually few percentage, sorry, few hundred basis points would have moved up on the profit as well. Definitely, we have our different, and the growth has been, you know, 6%-8%, it depends on.... Yes, so we have continued taking steps to drive the growth to continue to drive the business, launching initiatives. So I think we are focused on driving the and growing the business, yeah.
Okay. Sort of just to take this a step further and to sort of, I mean, over the last four, five years that we've owned this business, you know, creating shareholder value has been a challenge. So I'm just wondering if, you know, 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've not discussed. So we are just, you know, focusing on the growing the business, yeah.
Okay. Okay. Thank you.
Thank you. The next question is from the line of Kaustav Bubna from BMSPL Capital. Please go ahead.
Yeah. So, 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 three to five years down the line? So how much percentage of your total revenues will be non-matchmaking three to five 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 Luv.com? 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?
Yeah. So today, if we look at the matchmaking business, our wedding services business, it's around 2%. So maybe five years down the line, in fact, the plan was to take it to even the 10%. So at this point of time, we want to get to the breakeven before you invest further on wedding service business. But Love, Love will be part of matchmaking business, because for us, the Love is not a dating. It will help people to find meaningful love. So it's another way of helping people to find a life partner. So we don't consider it a dating service, while one may say so. So that's why for us, Love will be still part of matchmaking business. It's not matrimony, but it's gone to match- matrimony.
Right.
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 the new initiatives to drive the growth. So five years down the line, can wedding services business contribute 10%? Yeah, 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 with? Like-
Yeah, yeah, we are just working on it. Yeah, we are working on it. Probably we hope that, before the end of either this financial year or yearly or April, sometime be able to launch it. We're looking at maybe April 14th, because looks like, because that's our 24th anniversary, so probably we'll launch on that day, possibly.
Okay, great. Thank you so much.
Thank you. Reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is on the line of Niraj Kamtekar from Prospero Tree. Please go ahead.
Hello.
Yeah.
Thank you. Thank you for the opportunity, sir. Sir, my first question is that now more and more people are, rather than getting marriage, arranged marriage, the people are engaging other way also, the love marriage or other way, then our... It's, it's not a, the biggest threat to our business?
That's, you know, while we do see that as a threat, but, you know, the Matrimony.com is going to be there and continue the cultural nuance of India and to culturally connect. And, so we don't see anything, you know, because in the last 24 years, I haven't seen a single year where the matrimony business has gone down year-on-year, except during COVID time. Well, in fact, COVID time, we had a good increase in profiles, but revenue had an impact. So that's, we learned that one year, we never had even the big growth in the matrimony business. So it's been 24 years of continued growth, but the growth certainly is very dependent on year to years. 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, you know, they want to explore before they decide to, you know, get married or not. So that's the reason we are launching Luv.com. So Luv.com will be launched in a couple of months. So we, we'll cater to that segment of the opportunity, where people don't want to come to matrimony site and to get married. You know, so they want to explore and then decide to get married or so later. So that's the reason we are getting into that space as well.
So you don't consider that the reduction in the ratio of arranged marriage is not a threat to the matrimony? Is it correct?
Yeah, yeah. Actually, because matrimony is not arranged marriage. Look at BharatMatrimony.com, 70% of the profiles are created by individuals. So I got married through my own service. I don't consider myself arranged marriage. It was me who had a, you know, conversation. I felt I arranged my own marriage, so I don't consider the... It's, it's my, I think, the feeling of I, I contacted, you know, you know, I decided whom I want to get married. So it's, it gives the people that, okay, they are in control over whom they want to get married to. It's not the arranged marriage, the, what people really think, arranged marrying, 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 created by individuals. So there is some perception, okay, Matrimony checking, it's arranged parent, which largely driven by seeking youngsters. But yeah, around 50, around 15 percent, the profiles are created by parents, there are also some percent siblings. So it's a kind of collaborative matchmaking. Yeah, it doesn't matter whether the youngster is creating a profile or individual creating a profile. Yeah, still some stage parents do get involved, you know, because it's a the good thing about Indian matrimony thing is that it's a collective involvement, and that's the beauty of our Indian marriage. So Matrimony facilitates effectively. So we don't think that now or yeah, well, they go after the startups, but this form of thing, you know, will continue to grow.
Yes, but sir, our number of subscribers are not increasing in the same manner. It is around the same numbers since last few quarters. So what are the actions planned by Matrimony to increase the number of subscribers?
Yeah. So we definitely know. So we are today almost talking about 2.6 lakh subscriptions on a quarterly basis, which are, you know, it's more than 1 ,000,000 on an annual basis. A couple of years before, they be around 800,000-900,000, now touch 1 ,000,000, now getting to 1,200,000 . Yes, the endeavor, the plan is to accelerate that conversion, convert a free number to paid number. So these are some of the challenges we are, you know, that we are that's reflecting in our result as well, where we are growing at only at 6%-8%, where the goal is to double the double-digit growth.
Yes, the ongoing basis, we are continuously trying to improve our product, continue to improve our things or work on, appreciation and launch our new initiatives. All these factors were helping us to grow certain things, but we need to further, step up our, you know, the executions or, you know, maybe launch new initiatives. So yes, we are taking steps, but, you know, it's still yet to reflect in the, 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 subscribers are not increasing because we are spending almost INR 36 crore per quarter on advertisement and business promotion. But the numbers are static, almost static, not the 2.6 lakhs are constant, the same numbers are there. So-
Yeah.
What are the other plan we are taking to increase the number of subscribers?
Yeah. So you are right in terms of marketing spend. Actually, you know, as I stated many times, actually, the increased marketing spend were actually not required for the category of, this category or in terms of the revenue side. Today, in a way, we are forced to, you know, increase the marketing spend to get in the last, you know, the couple of calls before or many times in the past as well. Look at, you know, the category marketing spend, in, five years ago, it was only under growth. And under growth, the aggregate has almost touched four under growth. So has it increased any dynamics for the category? No. It's a more of every player that step their marketing, hoping to gain the marketing share for other players. That 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, the leadership. So that's why we have to, we have to increase the marketing spend. So in terms of growth, yes, the growth has to come from better execution or maybe launching new initiatives or new products, which we continue to do. So we are like launching Jodii, we are now looking and launching now.com. So these are some of the things we are doing to drive the growth and continue to figure out ways of driving the conversion, the free profile in the existing business as well. Yeah.
Yes, so this category on current this base is growing at certain percent in terms of profiles and the conversion growing at, well, remaining at the same place. The growth was largely driven by, yeah, some of the initiatives also.
But 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 the people are spending a lot of money on the weddings. Why this segment is not growing for the matrimony?
Yeah, that's the thing, which is basically, it's, interestingly, this category, wedding services, with, 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... When the largest spend on wedding is things like jewelry. Do people need any help on the platform? That's not required. And, the, the thing like, other thing like, you know, some other things are properly integrated. When you go to a place like now, everything is offered once in a player. So some other category where is, completely, non-branded, like, you know, talking services like, say, photography or makeup parties or maybe where it's a non-branded player, where people may need a help from the, the brand to, you know, adding their service provider.
But large part of spend, it's actually the other way around. It's the jewelers or apparel other things. Well, definitely venue is one of the category we see that there is an opportunity as well. So yes, we are also as you probably are also understanding that, okay, where is the customer need help in this category, where you can monetize? And I think these are small, photography, makeup parties, obviously, while the overall wedding date, you know, is not a lot of money 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 generate lead for the mandaps. So yeah, it's a category...
Yes, there is an opportunity in some other segment where you have to get into either a full service or maybe to get a value of the service, which where you have to play differently. So at least for the time, we are just focusing on getting the base platform ready, where we want people to come and use this platform to get some other service, like be it the Mandap or, you know, for that other thing. Also get the base 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 those things.
So yes, while there's opportunities there in terms of getting the big category and all the thing, at this point in time, we are focusing on getting the base platform right, and still we have to figure out how we can get a share of the wedding expense. So yeah, like, that still we not figure it out or not, are yet to work on it. Put it the other way.
So, sir, when will that segment 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 the some revenue.
Yeah, yeah. 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, okay. 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 of only 6%-7%. A well-established company with online presence, having many websites and so many persons or so many subscribers, is making a 7% PBT. I think it should be at least double-digit PBT level?
Yeah, yeah, no, definitely 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, you know, charging that all the companies globally or in India offering digital services, asking companies to either adopt Google billing payment system, pay 15% revenue or 11% 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, as I told, if not for the Google billing tax on a quarterly basis, which started early this year, our profit margin every quarter have been at least a few hundred basis points would be more actually, so.
That way, yes, what you're saying, that will achieve it, because this year there's something that's happened, which we are fighting that case actually.
Are Google charging to all online companies or only to the matrimony?
Look, those companies who are providing digital services, that includes the company like matrimony companies or dating companies, companies offering the digital content like the, media companies and, gaming companies, which excludes the companies offering e-commerce companies or food delivery companies. So in fact, the CCI given the order also, say that the Google has been, you know, obviously the monopoly that, you know, charging, want to charge and all. But still Google is trying to do differently. That's the case we've been fighting also. There 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 going to lose revenue because of this. It's all big implications for the country and the ecosystem.
So because imagine someone taxing companies wanting to pay 11% or 20% revenue just because of the entire app download happening from the Google Play Store. So without doing any additional thing, they just want to charge companies, which is basically, obviously the monopoly which we've been fighting, and so, so-
Lot of companies joined. Lot of companies, lot of companies joined this fight. So, sir, that Google charges are accounted for in the current quarter, expenses or-
Yes, yes, yes. We have, we are paying some money, accounted some money. So that's the reason it's not for the provisioning and, the money what we paid to Google, the profit have been 300%. The profit point, point would have been more actually, so.
Okay. Okay. Okay, sir. So, okay, okay.
That's the reason. Yeah, that's the reason our other expenses have gone up. So it's not our other expenses within, actually, this year, the profit margin would have been, like, much, much higher growth. While the top-end growth was at something, the profit margin would have been... We had a very good profit growth this year, yeah.
Sir, sir, last question from my side. Can we use the funds available for, for the acquiring the any event management company who provides the wedding, weddings 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 employ always, even at the small person appoint the event manager for their kids' marriages. So can we have any plan to acquire the any event management company?
As a company, the insurance platform, anything you 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 a, you know, one wedding planner in, you know, doing, say, 10 weddings, in, or 20 weddings in one market. So we, as a company, we should look at always the scale and size, something which is able to, you know, make it available across India. So if we now do, you know, buy 100 wedding planner, there's nothing unique we're able to bring to the table. So as a platform, we should be aware, we should be able to offer something unique, differentiated, and compelling value for the customer. We should not be yet another wedding planner and that, you know.
So we rather be a platform company providing a compelling value for the customer, or if we are as a platform, definitely value a lot for benefits on the go. 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.
Okay. Okay, sir. That's all from my side. Thank you, thank you, sir, and I wish you all the best, sir.
Thank you. Thank you.
Thank you. The next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go ahead.
... Hi, thank you for the opportunity. I have a couple of questions. The first one, you have 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, it's because it's moved to a better platform, in a way, integrated platform. That gives the ability to launch things across the platform in a simultaneous way. I think that's one of the significant change that we have brought in. So, you know, we have a desktop, we have a PWA, we have an Apple, and the Google Play Store. So what about the web view or what are the, the thing, what you have developed? So that's one of the changes we've brought in. The second thing about the look and feel of the app, we do want to bring the freshness and the navigation. So these are the things what we are able to achieve in the with the launch of the new app.
Also, when you do this kind of launch with and involving all the multiple platforms, we had a small teething there, you know, kind of the settling, some teething issues here and there. We had some teething 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 platforms. Have we really got the benefits of the new platform yet? No, not yet, in terms of... Because the new platform gives the flexibility to launch things, do lot of experiments. We're yet to get into those things, actually. We are still working on some of the pending things. Probably end of this quarter, we believe we'll be able to address those, some pending enhancements to be done.
Going forward, next, maybe next year, we maybe in a position to execute, experiment, then you may see the benefits of it. As of now, we have launched integrated platform, stable, good experience, and the teething issues what we have already addressed. So,
I mean, in terms of, Yeah, I mean, we have talked about the 5%-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, you know, we have been growing, you know, it's, it's not a 6%-8%, that kind of growth. There are quarters when the double-digit growth. It's varied from, talk about last three quarters growth. So for us, yeah, if you look at the year before last double-digit growth, it's a thing. So it depends on, the year and the second segment growing at a faster rate compared to the other, within the line of business offering for us. Since we don't know the competitive data, I'm not in a position to comment on it because we don't have Shaadi's number. So we have only three set of player, by and large, so we know that, the third player number and all the things.
Yeah, so I'm not in a position to comment on that because I don't have any information about the Shaadi.
Okay. And what are the two or three initiatives you're banking on for revenue growth next year? I mean, you talked about Luv.com, but if my understanding is correct, that segment does not provide too many revenues, and it in fact impacts profitability quite a bit, if we look at the dating apps and how they have been doing. And then 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're optimistic on, that will drive the revenue growth.
No, that's one of the initiatives. While we are not a dating team, you know, I think, one or two more, you know, the people have, one big question, the dating side. We are not pushing a dating side. In fact, we, we are not into the dating thing. So which, we want to help people to find meaningful love. I think our approach is different. Our offering is going to be different. We believe that we can create a meaningful size, where we don't know, so only by launching, only by experimenting. It may take, a couple of quarters for us to even get a sense of, because we have to invest for a couple of quarters, get a sense, understand. So we are in it for the long term. So we, I, I, honestly, it's not that, you know...
That's one of the initiatives that going to help us to grow, but I don't know how much of growth is going to come. Yes, you are right that dating sites in India has not grown much, but we believe there's a space, there's opportunity on a serious relationship. We don't know how much it can become in order, but it's not the only initiative we are banking on for growth. We are looking at some initiatives, plus also we have plans to grow in the existing businesses which we are still looking at. The one thing that we've seen that, you know, EliteMatrimony we set up in the airport. We have the EliteMatrimony kiosk in concourse . We want to, you know, increase the visibility of the EliteMatrimony, 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 we set up, more retail outlets or maybe other initiatives? We are looking at various possible things where with this initiative to, can, to add our growth actually. So yes, the plan should drive growth in existing business, plus, launch new businesses. We believe a combination of these things can help us to grow better.
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?
No, today, we don't see any meaningful player up beyond the, you know, that's, you know, the limited, the pan-India level, a few players. There's nothing, no, all the regional players are very marginal and, so nothing. There we see that, you know, we need to acquire at this point of time, so.
Okay. And lastly, on this whole-
Yes. Yeah, please go ahead. Yeah.
In this whole Google issue, I mean, I understand and, you know... While the court case will take its own course, I mean, ultimately, we are paying almost INR 20 crore extra per year for this. Why haven't you yet experimented in a different way to kind of lead the, you know, 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?
No, no, it's a, it's a valid observation. We need to figure it out, what is the best way, whether change our model or whether, maybe, you know, like something we want Netflix and all done. We have to see what is the friction, what is the, you know, benefits, whether, you know, plus and minus, we have to do some experiments. So we'll look at various options, you are right, and see whether we can overcome the trial, and beyond that, legal case. Yes, you are right. Yeah.
And, on the costing, if you can just give a sense. I mean, so, the AMP cost is obviously 18 crores, roughly, you know, here and there. But, given that you're also planning to enter some newer segments, as you talked about, is... Should we expect that this will go up because you will be investing behind the, you know, the, the new launches, et cetera? Or how do we see this next year and, and going forward?
Yeah. There will be some increase, obviously, when you invest in the new initiatives. We also some growth will happen. So, so we have to see whether you can able to overcome the Google challenge. So that will help us to get that, the money, what you are talking about, you know, so that, will help us to get that, money back. We have to... Yes, we have to, you know, work, work it out, because it's still too early for us, because the product is still work in progress. We've not really worked on how much it's going to cost and all. But in that regard, then, we're not in a position to comment on that one. Yes, there'll be additional increase in marketing, but how much we have to invest, we've not really worked on it yet.
Okay. And employee costs then. Yeah, sorry.
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 these new initiatives, like Luv.com.
Okay. Okay. Any one-off in the employee cost or, you know, because of it, it's down or something that, you know, this will come back up, any comment from that?
Yeah. So, so the employee costs, you know, what happens is, one is, at the quarter end, there could be some headcount, plus or minus, because like you know, that, we manage it, you know, 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 game. Second is, you know, the, things like, which are little variable in the employee costs, like, you know, 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, you know, it's in a range-bound thing, so it's, nothing, nothing major in terms of, one-off costs.
Understood. Okay. Thank you, and all the best.
Thank you. The next question is on the line of Anuj Sharma from M3 Investors. Please go ahead.
Yeah, thank you for the opportunity. 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.
That is good, yeah. You want to ask other questions as well?
Yeah. Second is on, in terms of customer satisfaction. So, you know, how are we tracking the customer satisfaction? And let's suppose we had a parameter of one to ten, where do you think we have reached, and where is, you know, what is the aim we have for customer satisfaction?
Sorry, sorry, can you just repeat again? Sorry, it was cut off. I missed some of it.
Yeah. The second question is on customer satisfaction.
Yeah.
I was just trying to understand what metrics we are using to understand the customer satisfaction, and where do we think we have reached in that, in that understanding?
Yeah. In terms of the profile relevance, we continue to look at the profiles and continue to optimize to ensure that we are getting the right relevant profile. But it's not that acquiring profile for the sake of acquiring profile, because in the matrimony realm, it's important to acquire the profile who are serious about getting a life partner. Otherwise, you know, today there are platforms you can get the profile acquisition. Because important to ensure that we provide a very you know safe and trusted platform or getting only those people who are really interested for matrimony. That is not about further profile acquisition. Always the right profile acquisition has always been the thing. But yes, there is always been growth in you know the three years ago.
But yeah, there are years we had a good growth in profile, but there are post-COVID, we had an impact on the profile growth. So at this point, the profile is growing at only marginally, okay, at the relevant profile. In terms of the ratings, rating definitely the customer satisfaction is very, very important. We track based on many things, be the, be the app store rating or customer comments. It, it's continuously get better only. So we continue to make progress, continue to make improvements. So, so that's a, that's always the focus on driving the better customer experience and one of our the focus areas.
In terms of-
We listen to customer, their feedback, continue to improve our product based on the customer feedback, customer things, so-
... Yes. See, in terms of relevance of profile, I'm sure you would have heard, but one of the common observations is 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, you know, 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, you know, let's suppose three years ago or five years ago-
Yeah, I understand. I understood it.
Yeah.
Basically, you know, whether customer active. You know, when a customer is active, fine, they've not found a life partner. Other than once, there are two things. When the customer themselves delete their profile, either they found a life partner, they delete their profile, they move out. Into the customer not active for whatever reason, you know, while he create a profile, we also purge the profile beyond certain time frame. We don't keep the profile beyond certain number of months if the customer is not active. It's not that, you know, someone created a profile three years ago, do they continue to be on the matrimony platform? No, if they are not active beyond few months, automatically your profile will 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 know, you are able to objectively analyze the satisfaction level, let's suppose three years ago, two years ago, today? Is there a number, you know, which is... How do I understand or how do you understand our customers more satisfied earlier versus today? And, you know, that's a feedback loop which helps you to improve and get better. So how do you track that really?
One thing, globally, the demand of customer, the customer experience is continuing on the rise. So I think, that is the case everywhere. You know, it's not that, you know, the kind of service what you people got into ten years ago, now the people know. People definitely want a better and better service. We also understand as an organization, we have to continue to improve and provide a better service. You know, there's something tracked 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 you? No. I, I'm not able to put a number to it. However, I say that, yeah, definitely that's one of our focus areas. All I can say, we're definitely getting or improving on for customer satisfaction, and so...
But I'm, there's no number I can give, specific number at this point. Whether it was, let's say, in the scale of 1-5, it was 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 with product improvement, process improvement. Every area we continue to make progress.
All right. That, that's helpful. Thank you so much. Thank you.
Thank you. The next question is from the line of Ankur Jain, an investor. Please go ahead.
Yeah, hi. Good evening, sir. Thanks for the opportunity. So I have a couple of questions. So the first one is, you know, 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, and why isn't the category, you know, growing faster?
Yeah. See, we see that because this category has been there for long years, this online matrimony category is fairly known. So the people, this category has been growing probably around maybe a 5%-10% growth. So within the current, you know, the way we have been operating on that. So either we have to either work on the ways to convert from the profile acquisition, we are operating at the 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 way to get more profile acquisition.
Either, you know, the top level profile acquisition need to get better, or the conversions need to get better, or probably identify the initiatives that can help us to grow better. So yes, yes, there are challenges, you know, in the way that's been growing because of the certain constraints. But however, we are taking some steps. It's not that the category, the profile acquisition has been growing at a phenomenal rate. It's been growing only at the marginal rate. I think that's one of the challenges we have in this category.
Yeah, and all three players, they have spent good 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. The marketing, as I told, I think it's, it's, we are spending more than what is because of the, the competitors, you know, step up the marketing effort. Otherwise, actually, it's more like, instead of spending 100 rupees, when suddenly everybody wants to spend it to 500 rupees, we have to resort, you know, resort to that, you know, the increased marketing spend. So it not as really benefit anybody's market share significantly. Yeah, here and there, some companies might move up in order, but not really, help anyone in order. It's more of-- I would say the media companies are benefiting out of increasing marketing spend or the company like Google Ads. But that's the nature of the industry at this point of time. We have to increase the marketing spend to manage that increased competitive activity.
So yeah, there are, as I 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 increased marketing spend have really got more people to come in online matrimony significantly than the kind of growth in the market is been, as we referred to, in the kind of growth and customer acquisition, is not the case. It's growing at only certain pace and continue to grow at that pace only.
Right. In your experience, how have the other internet-based ecosystems, you know, like the online job market and other systems, you know, how did they gain adoption in the Indian context?
The thing is that, see, unlike the matrimony business, it is, it is a clear business. You know, it's a, it's a one time in a lifetime, so it's the customer tend to stay for one year.
Okay.
Yes. When they say one year, obviously, the people, you know, prefer our brand. You know, that's advantage we have. A lot of people come to us because of they know the brand, they think that's advantage we have. So no matter what, you know, last 24 years, there's never been a big growth in the business year-on-year, but the growth may vary from maybe 10% to even there are years where 40%, 50% growth also in early days. The thing is that the people stay for one year or two years, depends on maybe something, but three months also. Unlike other businesses, where you are talking jobs and all, once you sign up with a customer, the customer tends to, by and large, just they renew all the... It's a 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, there are India is still large opportunity. There are 60 ,000,000 people 1 year, maybe around, maybe 10,000,000, 15 ,000,000, 10, 10 ,000,000 people have come to online, probably that's the reason we launch maybe Luv.com or two. We are continuing to figure out what are other ways the different set of people who are not come to online matrimony platform, to come and experience, the platform or services so that we can convert better. So matrimony business is large B2C compared to the B2B business, then in a way that, you know, once acquire the customer, yeah, they can continue to pay and all those things. Yeah, it's a different type of business.
Yeah, there are advantages, there are the challenges. Okay.
Right. Yeah, so, you know, finally, I would like to share one pain point. You know, I spoke to some of the users of online matrimony space.
Mm-hmm.
So one pain point which they shared with me was that, you know, once a subscriber, he signs up, and after a while, he or she finds a prospective match, they want to spend some time meeting and exploring. They want to take the relationship forward, and sometimes this takes a few months. And, you know, some of those cases, they decide not to take it forward, and then the process starts from scratch. You know, if somebody has taken a subscription for three months, and then he or she explored a relationship which took a couple of months, and they come back, then in 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 the money has gone waste, and then there is inertia to renew and drop off. So at-
Yeah.
What about this pain point and how do we address this pain point?
Actually, someday I could 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 the finding a life partner. Today, millions of people finding a life partner, they'd have paid INR 5,000 to get a life partner. And sometimes you can look, the people are spending INR crores of money on wedding, but for the most important thing on the wedding is spouse, where the people are to spend INR 5,000, INR 10,000 on the life partner, where you spend, like, INR crores of money and INR lakhs of money on various other services. So actually, sometimes you have to probably need to understand, look, the money what they pay in matchmaking is, like, much more precious and, much cheaper compared to what one can pay for any services in the world.
So my kind of money, you know, some education, clothes, this, that, and all the things. Yeah, life partner, you just be able to. That's the way I see it, you know, and so-
No, but-
One may think, okay. Yeah, yeah. One may think, okay, three months. Yeah.
No, I understand and appreciate your point, but, you know, we have a paradox here, that even though people are spending INR 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, you know, I spoke to a couple of users, and they said, "Yes, I mean, this is definitely a pain point." And rather, they shared this as a pain point.
Actually, it's-
So-
It's not that... Yeah, please go ahead. Sorry, I interrupted, yeah.
Yeah. So just one thing, you know, what struck me was that, like, you know, we are using—I'm a subscriber of Tata Play, and they have, 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, you know, that much additional time. So if you have stopped the subscription for 15 days, you have paused it, you can resume your after 15 days. So have you thought about the similar pause, option to your subscribers so-
Yeah. Yeah. In the majority of the business, it doesn't work that way, because it's very difficult. Because imagine if you sign up for Spotify, okay, I watch music one day, I don't watch the music one day. The mini subscription doesn't work that way. It's based on the tenure, whether how much you use it or not use it. I think that's the best subscription model. You know, while I appreciate, you know, some of our users are okay, but you never had... This is a challenge in terms of people, you know, when you attack the world, the subscription thing. Actually, today, you have millions of proper. In fact, sometimes there are challenges, look at 10 years ago and 5 years ago. Today, today there's 4 ,000,000 people on the platform, so there are enough and more matches.
In this case, we're talking about someone did not work out. Yeah, that's a chance to take. Life partner may or may not work out. So the giving a pause, come back, this kind of thing doesn't work out because of the, the nature of the business, nature of the thing, because otherwise, what happened, the person can contact all the match in one single day. Okay, take a pause for another 90 days and come back. So it's best than to business model or globally, maybe I'd say 98% of business or subscription business, they work on the tenure, not based on the usage in all terms. So we prefer to operate this way and all.
While I understand there are some users who may be not happy with that, and majority of the people are fine, that there are millions of people getting married and all those things, so.
Yeah, that's fine.
Different problem. Yeah. Yeah.
No, I just thought, you know, because there is, 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 know, you, you can think about it. Thank you.
Yeah, no, yeah. Yeah, definitely. I appreciate for thinking all the thing, but that will put a lot of complexity on our thing, all that, yeah. While we understand the user has that expectation, but yeah, there are the practical difficulties also that will put burden on the system actually, because these are the practical difficulties what we have, sir.
Okay, thank you.
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 this.
Yeah. 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.