Good evening, everyone. On behalf of B&T Securities, I would like to welcome you all to the matchability.com First Quarter FY 'twenty two Earnings Call. We have with us today Mr. Morjavail Jantiran, Pramodaran Managing Director of matrimony.com and Mr. Sushant Pai, CFO.
So without further delay, I would like to hand over the call to Mr. Mulhrewell to provide a brief overview of the quarter gone by and then we can move on to the Q and A session. Thank you and over to you sir.
Thank you very much, Deep. Good evening, everyone. Yes, I hope everyone is able to hear me. I hope all of you all continue to stay safe and healthy. India witnessed a severe second wave of the pandemic and many of our associates and their family members were also impacted.
We as a company put health and well-being of our people at the forefront. Some of the initiatives we rolled out for the people were special leave, Financial assistance, reimbursement of test costs and vaccination costs, on Infuri consultation, enhanced insurance cover, health related to COVID, webinar by doctor, etcetera. We also accelerated our CS initiative to help the society by contributing Rupesh 50 lakhs to the Tamil Nadu Centimeters Public Relief Fund and about INR 20 lakhs towards various other COVID related initiatives. Given this background, I'm happy to state that we overcame many challenges and we have reported a strong start for FY22 with a good year on year growth on building and profitability. As indicated earlier, our strategic initiatives continues to yield results and our focus in product enhancement and customer experience will actually enhance this growth momentum.
In quarter 1, on a consolidated basis, we achieved INR105.2 crores of billing, indicating a decline of 1.4 percentage quarter over quarter and a growth of 29 percentage year on year. There's a slight decline on a quarter over quarter basis as the lockdowns did have some impact in the April and May, but the momentum enhanced in June. For matchmaking, the key highlights are as follows. In quarter 1, the building was INR104.7 crores, a decline of 1.3 percentage quarter over quarter and a growth of 29% year on year. Revenue at INR104.9 crores, a growth of 4.2 percentage quarter over quarter and 21.8 percentage year on year.
We added 2.2 lakhs paid subscription during the quarter, a growth of 31.6 percentage year on year. We continue to see good double digit growth in volume and billings in North and Western markets, which are high competition intensity. AT for matchability business increased 1.6% quarter over quarter, but declined 1.9% year on year. We continue to track the impact we create for our customers. We are happy to state that we have created about 26,485 success stories in quarter 1.
Other highlights for the quarter. During the July 2021, the company has signed a definite agreement to acquire a 100% stake in Boatman Tech Private Limited, promoters of shadisaga.com. As approved by its Board of Directors. The appreciation will be by the way of share purchase from the existing shareholders for an aggregate consideration of INR 11 crores, subject to adjustment at the time of closing. The transaction is subject to customary closing condition and regulatory approvals.
We expect to close the transaction this month. Founded in 2015, Sagic Saka is a leading player wedding service industry with over 40,000 vendors across multiple services and cater to customers across 15 major cities in the country. Through a robust digital presence built with strong social media and the content marketing capabilities, Swadisaga has garnered a consistent demand of around 1,000,000 monthly active users with its technology focused approach. Shadysaga offers a differentiated product experience. Following this acquisition, shadysaga founders will join mathemi.com in senior leadership group.
With this strategic acquisition, we'll accelerate our growth through supply enhancement and superior product capabilities. We intend to integrate Chadi Saka product, technology and Swash assets with our offering that is weddingbazaar.comandbandhub.com. With this approach, we believe that the deal significantly strengthen our positioning and which includes both weddingbazaar.comandbandhat.com and which enabled both the brands become a number one our wedding services branch PAN India. Now coming to the marriage services business results. Revenue was 0.6 crores, a growth of 19.1 percent year on year.
Losses in the quarter was INR2.1 crores as compared to INR1.9 crores in quarter 4. On the billing revenue outlook for quarter 2, we have now delivered 4 consecutive quarters of year on year double digit billing growth in matchmaking, and we expect this momentum to continue, along with the growth in profitability. We expect that Q2 matchmaking building and revenue to show a double digit growth on a year on year basis and a single digit growth on a quarter over quarter basis. Weddings are expected to grow from Q1 levels. ShadiSaga will be consolidated post closing of the transaction, which is expected by this month.
So the contribution from Sadi saga will be insignificant in this quarter. Let me now pass on to Sushant to comment on the key profit related.
Yes. Thanks, Murugan. Our EBITDA margin for the matchmaking business in Q1 has improved strongly to 27.7% as compared to 23.4 percent in quarter 4 and 25.1 percent a year ago. We are progressing well in our journey to achieve 30 EBITDA margins in due course. Marketing expenses are at INR 37.3 crores as compared to INR 38.6 crores in quarter 4.
The EBITDA margins have improved strongly despite salary increments given in quarter 1, mainly due to reduced infra expenses due to lockdown and also revenue increase. Excluding marketing expenses, our margins in matchmaking are 63% in quarter 1 as compared to 62% in quarter 4 and 56% a year ago. On a consolidated basis, Our EBITDA margins in Q1 are at 21.6% compared to 17.7% in quarter 4 and 18.6% a year ago. We have now crossed 20% mark even on a consolidated basis, and we expect this momentum to continue. On an absolute basis, EBITDA has grown by 27.9% quarter on quarter and 40.9% year on year.
Tax rate is at 25.3 percent for the quarter. PAT excluding ASTRO, which are our associate company, is at INR14.1 crores, a growth of 39.2% quarter on quarter and 46.9% year on year, which is again a strong growth in profitability. Share of loss from ASTRO is INR 27 lakhs. Our free cash generation for the quarter has been robust at INR 16 crores, indicating 0.84x to EBITDA, and our cash balance is at INR302 crores. Return on equity is at 21%.
On the outlook for Q2 margins, We expect EBITDA and PAT to show a good double digit growth both on a quarter on quarter and a y on y basis, and we expect this trend to continue for the remainder of the year as well. 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 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, Deep, for Q and A.
Thank you, Saurabh. Participants wanting to ask questions, kindly raise your hand from the bottom right corner of the screen. We shall then unmute the lines. Participants who have joined via the call, they could ask the questions in the Q and A and we'll take them up. We shall wait for a moment till the question queue assembles.
Just another announcement, participants who have dialed in via the call, please press RN6 to ask your
questions.
So as we wait for the question queue to build up, Sir, I have a couple of questions from my end. Firstly, could you please elaborate more on Shadi Sad acquisition? And you have explained that you have changed your strategy now in the merit services business. But how would you like to look at this acquisition, especially that it is largely for the northern market?
Thank you, Deep. This Sathiya's appreciation, in a way, it's significant for multiple reasons. One is that you have moved to a subscription based business model on wedding services in the beginning of the last financial year. And also for the vending services marketplace model, there are a couple of things that are important. One is that the good number of listing on the supply side.
And while you are strong in certain parts of India, South and to certain parts of India because these billing services primarily started in the south. And SadiSaga has a good presence in the north and western market. So in a way, this helps us to become a strong A leader in terms of listing across India because also SadiSaga has been a good social media presence. They have close to 1,000,000 visitors on a monthly basis. So we're likely to enhance our offerings in terms of product side, listing side.
So these are the benefits plus also in terms of product, They definitely built a super differentiated and the product experience. So we see the benefit in terms of product and also the founders have certain credibility and there are years of in this adventure. So the founders joining at a senior position, wedding services, the listing and the social media presence and the product and all this will help the wedding services business to scale up. The wedding is a large business somehow so far no one made it big in this category. Hope that With the appreciation of ShadiSaga, we expect the vending services business to grow on a strong basis.
I mean, our base is very small, but We expect post this integration from Q3 onwards, we expect the waiting services to a strong uptake in the growth side. So to sum it up, the benefits on the product, social media presence and on the listing side, plus the founder's years of experience in this wedding services operation [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] It will all be beneficial, plus we're adding leadership capabilities in this space.
Right. Thank you, sir. The next question is from the line of Archit Singhal. Archit, we have unmuted you. Please go on.
Yes. Hi. Can you hear me?
Yes, yes. Yes, Jitin. Simple, I can't hear you.
Congrats team on good set of numbers. And I mean, it's good to see the margin improvement. So couple of questions. Firstly, I mean, Sushant, if you can answer this one. So marketing spends have come down sequentially, and I think that is one of The reasons why the margins have gone up.
So are you seeing a reduction in competitive intensity because of which the marketing spends have come down?
Yes.
So in terms of EBITDA margins, not only the marketing spends, obviously, marketing spends have come down by 1 crore. That is also the reason why EBITDA margins have improved. But having said that, the competition intensity has not relented. In the sense, there is still high competition intensity. But like we told you earlier, we see how much we want to spend for the quarter Depending on our trajectory of the business as well as competition intensity.
And we do a balance of both. Given that we had a little Slower April month than what we had expected because of the intense lockdown and severe second wave that happened. That's why we sort of tweaked our marketing expenses a bit. Having said this, I think in next quarter, the marketing expenses will increase Slightly from the current levels because we did tweak it in quarter 1. We may bring it slightly on the upper side in quarter 2.
But That is not going to affect our trajectory on profitability. Like we said in the call that the profitability will continue to increase in spite of the marketing expense increase. The other reason why the EBITDA margin increased is also obviously revenue increased, Right. From a quarter on quarter basis also the revenue increased. And the second thing that also happened was We also got some benefit because of the lockdown in terms of the offices were not running, in terms of power, in terms of rental, certain things we got some leeway and that sort of also contributed to the EBITDA margin.
Achin, just to add to what Sushant said, it's mainly on account of the revenue. The benefits are, let's say, it's a Small benefit. As Sushant said, in spite of increased marketing spend in quarter 2, we expect a double digit growth on the revenue side and the profit continued to grow very strongly.
Understood. And on the growth, I mean, if you can so growth has come back. And I mean, if you can highlight what are the key reasons Which is driving this growth? Is it the product innovation and the new categories where you are entering which is driving this growth?
It's basically our leadership team has been able to execute very well because we are continuing looking at a way to increase the conversions. So we see that year on year the conversion has been growing very well. So that we expect at moment to continue, mainly on account of our ability to convert free members into paid members on account of multiple things, the continuous product improvements and our execution capabilities, All these factors have been contributing to the increasing growth. Plus also investing in some of the product areas, some of the newer businesses. So combination of multiple factors have been driving our growth.
Understood. Two more things from my side. Firstly, I mean, if you can highlight on the pricing per se and in the annual report you have mentioned about NII markets and all. So do you see going forward pricing also to improve? I mean, we are seeing the improvement in paid subscribers, but anything on pricing, if you can comment?
Yes. Actually, we see that our ARPU has increased by sort of close to INR 100 compared to Q4. So we continue to now tweaking and continue to drive wherever possible, try to get the better pricing possible and wherever required We also discount so that the customer can convert better. So basically we look at both the things. So that one hand we try to drive the ARPU and the one hand we are also look at increasing number of paid subscriptions.
So we drive on both of fronts.
Understood. And last thing from my side, like Mughal, you mentioned growth should be double digit going forward also. And earlier there were comments that marketing spends would be calibrated in the same range. So fair to assume that with growth coming back in double digits Because of operating leverage, your margin should increase from these levels and I mean should continue to increase?
Yes. As Sushant mentioned, we expect the margin to because you look at the matchmaking, the margin at now almost 27.20 7 plus percentage. We expect to do course touching 30 percentage on the matchmaking side. And enterprise EBITDA margin across 20 percentage, we expect that to further to move up. So While the market spend continue to increase to drive the growth and also to take care of that increased competitive activities.
However, we expect the revenue growth and billing growth to continue or margin also to continue. So yes, so as it is concluded, yes, we expect the margin to further move up from here both on the matchmaking level as well as on the enterprise level. Thank you.
Earnings to ask a question. Then we have a next question in the chat from the line of Mr. Khush Gosrani. Sir, he wants to ask whether the shadi sada is more of an Pinterest model where you can see the listings and contact the vendors directly. What is the model?
You want to understand it better.
Yes. The business model is a subscription business model. Basically, our revenue coming from vendors paying money to get Better visibility and increased leads from us. So and as far as the customers who are looking for these wedding services, They come to the portals and they reach out the vendors who are on the Matching wedding services platform. However, the paid vendors will get a better visibility and better leads.
So business model is subscription, which is coming from the vendors in the wedding services space.
Right. We have another question in the chat box. Sir, that question is more they want to understand more about our marketing expense. The question is that How long do you think this will continue and whether these are the peak marketing levels? [SPEAKER SRINIVASAN
VENKATAKRISHNAN:] Difficult to comment because one hand Because definitely the competition intensity is continuing. And so we need to invest in some other areas. Obviously, we are not Investing it appropriately, we need to reimburse. And also, as a company, we are looking at expanding into your geographies. We're also looking at launching a new product offering.
So it's a combination of all these things, our targeted expansion, new product offering and the company intensity. So with all these factors pushing us to invest on the marketing side, we expect that the marketing spend to continue. However, as Sushant said, which definitely is going to help us in the double digit growth, even with increased market strength, we expect the margin to improve on both at the enterprise level and matchmaking level. So that's outlook currently.
Right. So another question was on your international expansion. So there was a time when we had planned to go outside India. Now how is that planned? Do we still see a lot of scope there or we will first focus only on the northern markets before going out of India?
No, definitely, Vinod, for us, the international expansion is pretty much on the cards. We expect the Bangladeshi operations to commence from Before the end of this quarter. And we're also working towards the launch of Sri Lankan matrimony or the operation in Sri Lanka hopefully before the end of quarter 3. We also have a muslimatch.com. That's a global matchmaking services sorry, the matchmaking service for the global Muslim and it's completely currently online.
As far as the physical operation is concerned, it's going to be in Bangladesh for Bangladesh matrimony and for Sri Lanka for Sri Lankan matrimony. While continue to look at the growing the matchavelinessIndia, wedding services business India, we're also looking at global opportunities also as one of our growth strategies.
Right, sir. Participants, before we take the next question, just a reminder to Press star and 3 to raise hands. The next questions are from Mr. Devan Bhatt. Mr.
Dewan, we have unmuted you. You have 3 last two questions.
Just Your data subscriber has declined by 2.9%. Your ATV is up by 1.6%. But the matchmaking revenue is up by 4.3%. Can you explain us the difference? I also have following follow-up questions, but if you could.
Yes.
Correct. So when you look at the paid subscription2.9 and ATV1.6, right? You will need to look at actually the billing, not the revenue, Because the paid subscription is based on the billing number. So that's how it matches. So if you look at 2.9% and 1.6%, The net impact will be about 1.3% and which is what is shown in the quarter on quarter basis.
So what is I mean, what would be the breakup of matchmaking services in this quarter?
So that is given, right? You're talking about the billing?
The paid subscriber and ATV growth, if you can, to give us the growth Yes.
So 2.9 is the decline in paid subscription. ATV increased by 1.6. So therefore the net
That's on billing, right?
That's on billing.
I'm talking about the revenue.
No, revenue there is You could We don't track it like that Because the ATV is based on the subscription amount that is received. And then it goes on a we amortize it over the period of the package. So you will have to sell from the billing wise only.
Okay. So your billing is down Q o Q, but What gives you the confidence of getting a higher revenue growth on a Q o Q basis?
Yes. So what happens is that the billing was down on a Q o q basis because quarter 4, there was an impact in terms of how the revenue is shaping up in quarter 1 because of Quarter 4 and quarter 1. Now because in quarter 2, we are again seeing a particular billing and particular trajectory, That's how the revenue comes. So it depends on it's like this. Revenue accounting is based on how the billing shapes up From month to month.
So for example, if in a particular month it is lower in the beginning of the month, then it It affects more in the same quarter of rather in the same quarter itself. Suppose the billing is high towards the 3rd month of the quarter, then it Impacts or rather you get higher revenue in the next quarter. So it's like that because predominantly our packages are in the 3 month category. So therefore, that's how the revenue shapes up.
Just to add to what Sushant said, So far as the Q1, the billing was impacted in the year prior in May, and it's bounced in the month of June. So, one of the increased billing in June, we covered that the balance on the Q2. So, because the April May It was impact and it also had an impact in the billing in the quarter one. So Q2, we expect that revenue to continue because of the increase billing we saw in June and twothree of the benefits coming in this quarter, plus also liquidity has been we expect year on year the double digit growth
Hello. We are not able to hear you.
So this growth will be high single digit QoQ or low single digit QoQ growth? And will it continue for next quarters?
So what so basically, what we have said is that Our Q2 matchmaking and billing will grow double digit on a y on y basis and a single digit on a quarter quarter basis. We are not saying whether it is high or low because we need to see how, for example, August shapes up, September shapes up and all of that. So right now, we are just leaving it at a single digit basis. So if we do very well in August, then that can improve a little more, right? So we'll have to see that.
At this point in time, we're just announcing
I just want
to understand you're saying that the year on year WTT growth and profit trajectory will continue. We are close to 50 percentage. It can then get better on the profit side. So we have said the profit to improve better and the building and revenue to our double digit growth.
Sir, your profit trajectory will be similar to this Q1 quarter, is it?
We may expect better profit also Year on year basis.
Okay. Year over year basis?
Yes.
Okay. And then has your pricing stabilized? The mix that you are changing in terms of subscribers, has it stabilized now?
Pricing, the combination of different packages. So we continue to figure out, As I said, there is a personalized services which are soldered IR packages. So that kind of similar level, lot means, sky key more depends on we're able to convert the users into various packets. So we expect it will be the similar range or maybe slightly get better, depends on how the quarter ends. Very difficult to kind of put a number to it, but our strategy has been that continue to do what it takes to convert and also where it's possible to get better subscription at the right ARPU, which we try to do that.
Sir, before we take the next question, participants on the call, you need to press star and 6 participants via the link press star and 3 to ask questions. We have one question from a Tallinn user. If you do we have unmuted your line. If you could just introduce yourself first and then ask the question.
Hi, Dhulita.
Congratulations on a very good set of numbers.
Yes. Thank you.
Murugan, you have alluded in the past that we want to grow double digit, but When do we see a run rate of INR 500 crores? Can we see INR 500 crores on an exit this year? Yes.
We hope you get to the number Dhruv, okay?
Yes. But if you Here, the quarter on quarter single digit kind of growth, we can exit on a run rate of $500,000,000. Is it possible?
I hope that you can it's possible and I hope you can able to get to the number.
Right, right, Right. And Sushant, to reach that number, do we have to spend a lot on marketing? Because I guess 2 quarters back, you said that INR 40 crores is the max you want to go and Today, we're saying that we might have to increase that. So, a word on the marketing expenses?
Yes. So, what we are saying is, yes, see, If you remember, we had said that marketing expenses are a function of our growth trajectory and also competition intensity. We'll balance both. We had also said you're right that even though competition is going to spend more, we'll be in a particular range sort of a thing. But you'll have to keep You know, revisiting this.
Right now, our thing is that, yes, we are now in the 37%, 38%, that will increase further in quarter 2 Within our range that what we had said. Now what we will spend in Q3 and Q4, we will again look at it at that time. But right now, it looks like that It will increase from this level onwards. But whether we want to go much beyond what we had indicated earlier, we'll take a call As we go along. But broadly, that call is also going to be taken depending on a growth trajectory.
If the growth trajectory is good, even if we increase marketing a bit, We can still keep our momentum in terms of increasing EBITDA and PAT on a quarter on quarter basis. So So broadly, our plan is that we want to increase billing on a double digit Y on Y basis quarter on quarter And also improved profitability on a double digit Y on Y basis quarter on quarter, even on a quarter on quarter basis. So I think as long as we keep track of it, the marketing will be like a number that we keep tweaking depending on both factors.
Right. What Sushant said, there are multiple things. One is definitely the increased competitive activities. And we also the growth plans, we also expanding to international operations and other countries. We also have the product offering.
So there are multiple things. We also know they're looking at the wedding services also. But what is said that last year will be in a similar vein. So there are multiple things. We expect that as Sushantay, marketing is a function of our growth trajectory and plus commodity the marketing spend.
So what you're looking at broadly, good double digit growth and profit moving up strongly. And these are the 2 things I'm looking at. So Top line growth and profit growing strongly. A couple of things will be very well depends on that as Sushant said, our growth trajectory or growth initiatives plus For what we see in the market.
Right. I have two more questions. Bhavan, see, I guess we ended June on a very Good note, is it because during Q4 numbers you said that our billings would de grow much more than what you have shown. So Was June a really good quarter for Mahindra?
Yes, really. Is June a big day? I guess, Damona picked up from somewhere the May, because when you had The analyst call, kind of the outlook was not so good because it was a receiver lockdown. And the moment I picked after that is June, we delivered well. Yes.
So, I don't want to think
the end of May 1.
June will
be better than Feb or March,
if we have to
confirm like that?
Yes, June is
Right. And my last question will be after the acquisition, do we expect EBITDA loss in our Wedding services business to go above the range of say about 1.5 crores to 2 crores on a quarterly basis?
We are at around INR2 crores. It will be in a similar range for this quarter as well. And we don't see any significant increased losses. And again, probably 1 quarter down the line post integration, we also expect that the building momentum to move up in wedding services From quarter 3 onwards. So the outlook at this point in time, the last year around the 2 crores.
Okay.
The next question is from the line of Mr. Manivanan Kanan. Mr. Kanan, we have unmuted you. If you can just ask your question, please.
I guess he is maybe on mute or not available. There is another caller calling in. We have unmuted your line. If you could just introduce yourself and ask your question, please.
We are not able to share, sir.
Yes. Sir, your voice is not audible. We have unmuted you. If you to introduce yourself and ask your question, please. Okay, Mr.
Kanan has sent his question in the chat, so I'll just ask from his behalf. So the question is, in spite of 3 players aggressively investing money, the industry growth is tepid unlike other new age industries which solve much lower needs. I feel it is because there is no repeat business opportunity from users. A satisfied user on other platforms will do business more, where the satisfied user on matrimony will get married and churn out. So the industry can grow at a great speed.
What is your view on this small opportunity, sir?
That's kind of in terms of compared to other interim businesses. Yes, we don't repeat users. The other internal business, yes, you are right. Once you have a customer, once you become satisfied customer, They can be possibly a lifelong customer or probably they can transfer for long term. Yes, so in this case, the matchmaking is Once satisfied customers where you have to end up in losing them, that's a fact.
That's an edge of the business. However, India definitely has the number of users looking at getting married and the level of online penetration definitely is improving. Yes, there is internal competition and there are various reasons. It could be that what is the why that the thing is not moving up. One is that was because the point what you already said that the people get married and they leave the website.
The number of news is coming also that because of today The multiple players and today people are trying to kind of YouTube to each of the markets, that's what's trying to happen. So the number of new people coming, yes, there has been growth at is growing at a double digit basis. And we expect that momentum to continue. Whether we're going to grow at higher percentage, it may not be the case. The reason is that, but other indices why you see the multiplier effect much stronger, Because existing user transact again and again.
In this case, the new user keep while the new user base is growing, but not growing at the 30%, 40%, can't grow at that pace. Can go at a double digit pace. I think industry is growing at a reasonable pace. I think that's what you can expect in our overall user base growing at Polya Double digit basis. This is growing on double digit basis.
I think that is reasonable expectation we can have in the business. Unlike other e commerce businesses, While we can now existing users keep coming and buying it, plus they're also buying more services, that may not happen in this category. Yes. Is there opportunity to grow? Yes, there's opportunity to grow because the number of people looking for live partnered vis a vis, the number of people are getting married, there's definitely opportunity to grow.
But the growth will be in user profile growth only at double degree. And otherwise, we come up with new innovative ways to kind of target growth. Okay. Can you figure out what else can be done to either increase that user base? However, it's one thing about driving that number of users coming on the platform, that's one thing.
Again, the revenue is a function of what personally you have to do is going to become paid member. So while today, certain customer use is going for a paid membership. And we continue to do product improvements and various strategies to get more people go for paid subscription. So that other way to drive the growth is, yes, 1 on the number of users signing up with the platform going up, other way to drive the growth is converting the more number of users going for a paid transaction. So we continue to work on both these areas.
And why? The thing is that there's a positive outlook. There's a growth momentum. We expect the momentum to continue. We expect only to A further move up.
Yes, the Zincare competition, it's sort of in a way that it's a challenge. But however, as a leader in this space, we're executing very well. We have widened the gap between us and the other players. In fact, we're widening the absolute revenue gap between the other players in the industry. So we widen the gap.
Continue to execute very well. We continue to work on the ways to get more people to go for the paid membership and also try to get more people to sign Same for the matchmaking platform. Yes, the nature of this business is not like other thing, but our work. This business in a way that which has strongly entrenched in terms of when it comes to matchmaking, obviously, Matrimony is definitely one of the most preferred brand. So So, Astellas Humanity exists.
The matchmaking will continue. So that way, this business innovate eternity or the longevity of this business vary And so that way while there are some challenges like we don't have repeat business, there are a lot of positive about it. In fact, among all the Internet business paying for subscription, Matchmaking is where people pay for highest subscription because today people pay almost INR5,000 for digital subscription. No other digital subscription business get this kind of ARPU. That talks about the people belief in this category and matimune.com.
So that way, there are a lot of positive around it. And so we continue to work on ways to the growth. So and again, more importantly, we're satisfied as a company that because it considers matchmaking as a noble Service. So like how healthcare, how education, we truly believe that matchmaking is a very noble profession. So yes, We have satisfaction in getting 1,000,000 intreputable matters.
Right, sir. We have the toll in user back. If you could please introduce You also can ask your question.
Hello? Yes,
you are audible. Please introduce yourself and ask your question.
Yes. Hi, hello. This is Mohit here from HDFC Securities. So I basically had one question. So with respect to we have Spoken about this in the previous calls as well regarding the increased popularity of the dating app, right?
So now in and south being your major market, So we have these regional dating apps also which have come up and have become popular. Like one is, I think, by the name of Anbe, one is by the name of Arikke, which is called which targets the Malayalam community. And Anewi, I think, targets the Tavan community. So there is a regional specific gearing up which have come up. So do you feel that this could be one of the more and more layer of competition for your business and it could impact the growth in pay to files?
Mugeet, as I said in the past, we don't see the dating sites or any real competition to matrimony business. Look at all the dating sites, no one even crossed in a couple of 1,000,000 of dollars of business in spite of some other Players there being in the market for more than a decade also. So that's why the dating is something which has a low penetration and user base is completely different. They are challenged by getting female audience. So even the largest datings in India not even cost $2,000,000 revenue.
So you don't see dating as any significant competition in the matrimony business. And we also don't see that this kind of No, overlapping with the people looking for the matrimony. So we don't see definitely any significant comfort from the wedding services. And so we don't see that as a challenge.
Okay. And so my one more Question is with respect to pricing, right? So just a combination of various packages, right, from the basic package to the premium packages. So If I understand correctly, so because the ARPU has shot up because of the decline in subscriber base from Q2 to Q1, and there's no major change in pricing. So is the understanding correct on that part?
No. Actually, Mohit, why that the number of paid transaction dropped On account of the challenges, what if patient in April may on account of COVID lockdown. Otherwise, the billing volume would have grown compared to the earlier quarter. So ARPU has nothing to do with the drop in the paid transaction. The ARPU is a function of, as you rightly said, it's the mix of various packages.
It depends on which That we're able to sell in a particular quarter, that will
slightly increase or decrease. Okay. Got it, sir. Thank you so much.
So we have one more question in the chat. The question is regarding your employee cost. So the question here is, would we see an increase in hiring now as teams open up? How should we look at the employee cost line item?
See, the employee cost is around at enterprise level around the 32 percentage. And we expect it will be sort of at a similar level. And as the revenue grows, The employee cost as a percent may even come down because we not invest so much of we not invest in the corresponding employee cost. So that's a natural business at the economic scale when the revenue increases, the cost, be it infrastructure cost, be it employee cost, even the marketing cost, should come down. So we don't see that while we're definitely noticing in certain areas.
But however, we don't see that employee cost Moving up, it will be as few progress, it may even come down further.
Right. On his call. In case there are any more questions. So we have one more question from a caller. Yes, sir, you have been unmuted.
If you could please introduce yourself and ask a question.
Hey, hi. Am I audible?
Yes, you are audible.
Hi, this is Rajesh Kotar here from AlphaCredit Advisors. I just have one question that in terms of I mean the consumer behavior in last 3, 4, 5, 6 months, are you seeing any trends over there? And this strong growth of 29% on Y o Y basis, is it just due to the low base? Because If I look at Q1 FY 2020, you had a INR92 crore of billings compared to Q1 FY 2021, it was INR82 crore. So, of course, the base was very low and therefore it is 30% growth.
But as we move forward, will it be more like a low double digit It kind of a growth that's what you are guiding for?
Yes, Rajesh, because last year Q1 we are severely impacted because the base was low. This quarter we had a strong double digit growth in terms of the building. So yes, but definitely we're looking at going forward year on basis, there will be double digit But won't be like soft 29 percentage or 30 percentage year on year. We'll definitely have a double digit growth.
Okay. So when you say so basically you are saying that That 100 and 10 crores, 125 crores that basically over a period of time, June to basically by Q4 exit rate you can reach To what, 120 crores kind of thing? That's what we are looking for?
No, that's we'll continue to kind of have a double digit growth quarter on quarter. Yes, It's a work to get to that number and before the end of the year. That's our note conduct that we are working towards it.
Okay. And to my first question that in terms of the behavior of the consumers in last 3, 4, 5 months, Any trends to understand any major difference?
No, we don't see anything. Nothing has changed significantly in last or even To some extent in the last couple of quarters or anything like that. One thing that definitely during the COVID definitely has accelerated the digital option in India. And So more and more people are now open to earn in for various services. So that way they're not only for us, there is generally there's the good digital option taking place in India.
Sir, we have one more question from Mr. Sunil Kumar. He is asking, are you looking at some big Matrimony player acquisition in the Northern Hindi markets?
At this point of time, you're focusing on our growth and we continue to focus on The improvement of product and the conversions. If there are any opportunities arises in the future, we'll evaluate that.
Thank you, sir. So given there are no more questions, over to you, sir, for any closing remarks.
So thank you, Deep, and thank you everyone for uninstall. I hope everyone can continue to stay safe and stay healthy and look forward to in the next quarter. And Shushan, is there anything you want to add?
No, nothing much. I think we've discussed everything. In case you have any Questions or any specific queries, do feel free to write to me or to our IR consultants as well, Valloulam advises. So look forward to keeping in touch. Thank you.
Yes.
Thank you once again and appreciate your interest and participation. Thank you, Mr.
Thank you for joining this call. On behalf of Bill Securities, have a good evening. Thank you so much.