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REGISTER NOW OR LOGINMatrimony.com (NSE:MATRIMONY) is a leading online matchmaking website in India. Incorporated in 2001 as a matchmaking 
website for the expat Tamils in the U.S., Matrimony.com is the pioneer in providing online matchmaking services in India.
It offers matchmaking and marriage services in India as well as in the international markets and related product sales. The Indian wedding market is highly segmented and unorganized. Matrimony.com has more than 300 specialized websites. A unique business model, solid balance sheet and a potentially large online matchmaking services market are Matrimony.com’s USP. The company launched an IPO recently and was oversubscribed by 4.4 times. With over 17 years of experience, the company has a large and growing user base and offers various marriage related services to the Indian community both in India and abroad. The company will benefit from an increasingly young population and fast internet growth in the Indian market. Investors can, therefore, look at buying on dips.
How does Matrimony.com make money?
Matrimony.com makes money through member subscription. One can register for free but needs to pay a fee in order to contact a prospective bride/ groom. The company operates in two segments – matchmaking services, and marriage services & related sale of products.
Matrimony.com Positives
i) Most Trusted Brand with an array of related services and web portals – Matrimony.com holds a record for the most number of documented marriages online. The company enjoys a clear leadership position in the market. The brand BharatMatrimony.com has been ranked as India’s most trusted online matrimony brand by The Brand Trust Report India Study 2014. With nearly two decades in business, the company has successfully won the trust of its users who confidently share their personal information on the website.
Matrimony.com also has other portals like EliteMatrimony, CommunityMatrimony, MatrimonyDirectory, MatrimonyPhotography, MatrimonyBazaar, MatrimonyDirectory and MatrimonyMandaps. The website owns 15 language-based domains. It also runs ChristianMatrimony.com, MuslimMatrimony.com and sites for other castes like Sikh and Jain, Mangliks and scheduled castes.
ii) Early Mover Advantage – Matrimony.com enjoys an early mover advantage amongst consumers seeking online community matchmaking services. Encouraged by good user response, the company has also launched various ancillary services like marriage services, wedding photography, catering etc. which should gain traction with ample cross-selling opportunities. This will also create opportunities for Matrimony.com to move up the value chain.
Today the website has over three million users, approximately 28 million registrations and 140 centers across India. The company witnessed a 22% surge in the number of listed profiles last year itself. It has a well-established network of retail centers, websites, mobile sites and mobile apps.
iii) Recent IPO was a success – Matrimony.com recently launched an INR 500-crore IPO with a price band of INR 983-985 per share. Net proceeds from the issue are expected to be used for business promotion activities, construction of office and general corporate purposes. The IPO was well received by the market (oversubscribed by over 4.4 times) given the company’s financial stability, leadership position in online matchmaking business and unique business model. It was also the first company from the online matchmaking services community to be listed.
iv) Immense Potential - According to Janakiraman, CEO of Matrimony.com, the online matchmaking portals account for just 10% of the total market in India. The company should benefit from a rising potential in matchmaking services market and the belief in the institution of marriages in India. There is also an Immense potential in the matchmaking services space especially in developed countries where there is a huge demand for matchmaking within Indian castes and communities. According to a KPMG report, out of the 107 million unmarried Indians within the marriageable age bracket, 63 million were actively seeking marriage proposals. This provides plentiful opportunities for the company to grow in future.
v) Profitable so far – Matrimony.com made more than INR 290 crore is revenue and INR 44 crore in profit last year. The company returned to profitability in fiscal 2017 after three consecutive years of losses. Since the company operates online, it has very little capex and working capital requirements. From fiscal years 2013 to 2017, Matrimony.com registered a profit after tax growth of over 40% compounded annually. Its sales also grew at more than 11.5% CAGR during the same time.
Key Risks
Matrimony.com is a highly trusted website by the Indian community. The Indians are very careful when it comes to the mechanics of an arranged Indian wedding and placing their trust in some third party organizations is not easy for them. As such, the company needs to exercise extra caution in preserving its members’ information and profile and maintaining its user base. Any misuse of the company’s websites by its users could lead to a disruption of Matrimony.com’s reputation.
Though Matrimony.com is in a great position because there is very little direct competition till date, few dating apps like Tinder have now started to gain popularity. Shaadi.com is another prominent competition. Another risk is the failure to convert free members into paid members and retention of existing base of paid members.
Valuation
The scrip got listed at INR 985 on the BSE. Currently trading near the INR 800 level, the stock is down by 17% from its initial list price. The market capitalization value stands at INR 1,812 crores. The P/E stands at almost 38x compared to 48x at the time of listing. As such the valuation looks attractive. Investors can look at buying on dips.
Conclusion
India is a strong matrimony market and Matrimony.com is the oldest online matchmaking website in the country. It is amongst the handful of profitable Indian ventures in the online world. No industry today is untouched by technology. With an ever-increasing number of internet users and increased internet penetration in India, Matrimony.com should continue growing in terms of number of visitors. India has a huge young and tech-savvy population who are looking at tying the knot. Matrimony.com is a good stock to own, however, investors could wait for a lower entry point.
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