IGI Logo

Mixed operating performance with strong pickup in billings  

Our view and valuation

Overall, the reported revenue and EBITDA margin was below expectation. The strong sequential pickup in billings offers strong revenue visibility for FY23.  Rising penetration and shift from unorganized to organized players would continue to drive revenue growth; while positive operating leverage would drive EBITDA margin in medium term. Online matchmaking accounts for just 6% marriages in India and expected to grow going ahead. Marriage services  in India is Rs 3500 bn in size, but highly fragmented and offers long term growth opportunity for the company

It is expected to maintain double digit revenue growth momentum along with strong EBITDA margin. The competitive intensity in the online matchmaking segment remains high and any decrease in competitive landscape in the industry is critical for margin expansion. We estimate revenue CAGR of 15.0% CAGR over FY22‐FY24E, with average EBIT margin of 14.3%

We maintain ADD Rating on the stock with revised target price of Rs 851/share, based on DCF methodology. Trades at PE of 22.2x on FY24E EPS

Result Highlights

* Reported revenue growth of 1.9% QoQ to Rs 1,106mn. In terms of segments, matchmaking grew 1.8% QoQ; while wedding services grew 15.4% QoQ.  

* EBITDA margin was down 140 bps QoQ to 16.85% , on higher other expenses which grew 15.6% QoQ.

* Wedding services remained loss making as it reported EBITDA loss of Rs 31 mn in the quarter.

* Billings reported strong uptick as it grew by 7.2% QoQ to Rs 1,151 mn.

* Paid subscribers grew by 8.8% QoQ to 0.23 mn; while average transaction value was down 2% QoQ to Rs 4,823.

* Declared final dividend of Rs 5/ share. 

* Also approved buyback of shares of total amount of Rs 750 mn.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer