Add Matrimony.com Ltd For Target Rs. 1,041 - Yes Securities
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Result Highlights
* It reported revenue of Rs 1,011 mn (up 4.6% QoQ), which was slightly below consensus expectation, led by strong performance in Matchmaking segment (up 4.5% QoQ to Rs 1,006mn).
* EBITDA margin declined by 179 bps QoQ to 17.1%, led by wage hike and higher other expenses in the quarter
* Billings continued strong growth momentum as it grew by 7% QoQ to Rs 1,067 mn, led by rising traffic to the portal.
* Paid subscribers remained flat at 230k. Average transaction value grew 6% QoQ for the quarter to Rs 4,667
* EBITDA loss for marriage services segment remained flat at Rs (19) mn. It is in the process of getting the business model right for marriage services segment before scaling it up.
* Announced the formation of wholly owned subsidiary in Bangladesh with investment of Rs 50 mn.
* Recommended final dividend of Rs 3.5/ share (same as in FY20).
Our view:
The continued robust increase in billings offers increased visibility about future earnings. Also, increase in average transaction value is in right direction, which will drive margin improvement. Also expect marketing expense as % of revenue to come down in future thus driving EBITDA margin. Trades at around 27.9x on FY23 earnings. Maintain ADD on the stock
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