Matrimony.com Limited — Call Transcript 2020

Aug 20, 2020

matrimony.com

August 20, 2020

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Dear Sir/Madam,

Sub: Call transcript of Investor/Analyst conference call under regulation 30(6) of SEBI (Listing Obligations & Disclosure Requirements) RegUlations, 2015.

Ref: BSE Scrip code: 540704/ NSE Symbol: MATRIMONY

Pursuant to Regulation 30(6) of the SESI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the call transcript of Investor/Analyst Conference call with the Company held on 07thAugust 2020 is attached herewith.

The aforesaid information is also being hosted on the website of the Company viz., www.matrimony.com.

Submitted for your information and records.

Thanking you

Yours faithfully,

For Matrimony.com Limited

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"Matrimony. com Ql FY2021 Earnings Conference Call"

August 07, 2020

ANALYST: MR. SANTOSH SINHA - AXIS CAPITAL

MANAGEMENT: MR. MURUGAVEL JANAKIRAMAN - PROMOTER & MANAGING DIRECTOR - MATRIMONY. COM LIMITED MR. SUSHANTH PAl - CHIEF FINANCIAL OFFICER - MATRIMONy.COM LIMITED

matrimon .Gom Matrimony.com Limited

• Moderator: Ladies and gentlemen, good day and welcome to the Matrimony.comQI FY2021 results ConferenceCall, hosted by Axis Capital Limited.As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentationconcludes.Shouldyou need assistanceduring the conference call, please signal an operatorby pressing"*,,then "0" on yourtouchtonetelephone.Pleasenote that this conferenceis being recorded.1now hand the conference over to Mr. Santosh Sinha. Thank you, and over to you Sir!
• Santosh Sinha: Thank you Ayesha. Good afternoon everyone. On behalf of Axis Capital, 1 welcome all the participants to the conference call. Today, we have with us Mr. Murugavel Janakiraman, Promoter& ManagingDirectorof the company, and Mr. SushanthPai, Chief Financial Officer of the company.We are going to start with the overview of the company'sperformance for QI FY2021and then we can switchoverto the Q&Asession.Thankyou and overto you Sir!
• Murugavel J: Thank you Santosh. Good afternoon everyone. 1 hope all of you are staying safe and healthy. During the previous quarter updates, we had indicated that our matchmakingbiJIingwould be impactedby around20% in QI. However,we have reducedthe impactof matchmakingbiJIingto a lowerdeclineof 14%quarter-on-quarter.

This was possible due to the June month coming back to normalcy and showing year-on-year growth. Despite this impact, we have shown a significant improvement in PAT with a 38% quarter-on-quartergrowth.This was possibledue to various cost interventionmeasuresincluding people and infrastructurecosts and at the same time ensured superior customer experience.We also generatedpositiveoperatingcash flowduringthe quarter.

Let me come back to the results. On a consolidatedbasis, we have achievedRs. 86.8 Crores of revenuein QI whichis a declineof7.8% quarter-on-quarterand 9.1%year-on-year.

Keyhighlightsforthe matchmakingbusinessare as follows.In QI, billingwas at Rs.81Crores,a decline of 14.3%quarter-on-quarterand 7.5% year-on-year.Revenue at Rs.86 Crores, a decline of 7.3%quarter-on-quarterand a 5.4%year-on-year.

Paid subscriptionof 167,803are during the quarter, a decline of 8.5% on quarter-on-quarterand 5.1% year-on-year.ATV for the matchmaking business had declined 6.4% quarter-on-quarter and 2.5%year-on-yearand this is in linewith our initiativeto offer differentiatedprice to various segmentsto conversions.

We continue to track the impact we create for our customers. We are happy to state we have createdabout 18,500successstories duringthis quarter.

Now comingto the marriageservices business,revenueofRs. 0.7 Croresin QI as comparedto 1.1 Crores in the previous quarter. As indicated earlier, the business situation has some challengesand it will take some time for the wedding services businessto come back to earlier levels. We are also using this time to enhance our product servicingofferings.We also brought

down the losses to a Rs.3.3 Crores from Rs.3.5 Crores in the previous quarter. The loss will furtherreduce in 02 and this is in linewith whatwe have indicatedearlier.

Let me talk about the revenue outlook for 02. We expect the 02 billing for matchmakingto pickup and showa double-digitgrowth both on a quarter-to-quarterbasis as well as on a year-toyear basis. Due to billing drop in 0 I, the revenuegrowthwill only be a singledigit growth in 02. MarriageServicerevenuewill be at similarlevel of 01.

Now let me now pass on to Sushanth Pai to commenton the key profitabilityhighlight. over to you Sushant!

Sushanth Pai: Thanks, Muruga. Our EBITDA margin for the matchmaking business in 01 is at 25.1% as compared to 21.9% in 04. So. that is a big improvement from quarter-on-quarter basis. Marketing expenses are at Rs. 26.8 Crores as compared to Rs. 28.7 Crores in 04. Like we indicated earlier. we have tweaked the marketing expenses a bit in this quarter considering the revenueand billingof the quarter.

As Muruga indicated earlier, despite the situation we have been able to demonstrate increase in marginsdue to various cost optimizationin the areas of people as well as infrastructurecosts. On a consolidatedbasis, our EBITDAmarginsin 01 are at 18.6%as comparedto 14.4%in 04.

The tax rate is at 23.6% in 01 as comparedto 25.8%in quarter 4.01 PAThasshown significant improvementto 9.4 Crores which is a 38% quarter-on-quarterincrease and a marginal increase year-on-year.On the outlook for Q2 margin given the expected revenue growth in 02 and the cost interventionsalready in place, we expect the profit after tax to be in very similar range of QI.

I would like to end with the customarysafe harborstatement.Certain statementsduring this call could be forward-looking statements on our business. These involve several risks and uncertaintiesthat could cause the actual results to differ materially from such forward-looking statements. We do not undertake to update any such forward-lookingstatements that may be made from time-to-timeby or on behalf of the companyunless it is required by law. Thank you and overto you Santosh!

Moderator: Thank you very much. We will now begin with the question and answer session. We have the firstquestionfromthe line of Archit Singhalfrom SafeEnterprises.Pleasego ahead.

Archit Singhal: Fewquestionsfrommy side. Firstly,I wantedto hear yourthoughtson the industryconsolidation as well asthe competitiondynamicsparticularlyin the loss in the north and the westregion, now this question is also about infoedge commentary in their previous call where they have highlightedthat they would continueto spendin Jeevan Saathito gain furthershare,so wantedto knowyour thoughtson the same as well as on how you see Matrimonyin terms of consolidation?

Murugavel J: Thank you Archit. In terms of the competition intensity, they continue to remain high, particularlyin the north and western market. However,we have increasedprofile acquisitionin

those markets. With respect to consolidation,if we are getting opportunities, we want to be a buyer so we continue to focus on our business,so that is our take on as you are looking at the business.

• Archit Singhal: On the other things in the AGM there was a mention that there is a video calling facility now availableon the Matrimonyapp,sojust wantedto understandhow that will work and can it drive the paid subscriptionfor Matrimony?
• Murugavel J: Yes, we have launched feature, the video calling feature consideringthat there is an increased adoption of video calling everywhere and also currentlythat obviously the prospects cannot go and meet the partners in person so we launched video calling features again this feature is availableonly forthe paid usersthey would establishthe video callingto the oppositemember.I think it is an interestingfeatureagain still in the early stages, we see that adoptionhas been fairly good,so yesthis can mean one of the benefitsand we have to wait and see whetherhowmuch of this feature is going to have that increasepaid subscriptionsbut we will see that the feature has sometraction.
• Archit Singhal: Isthat featurealsoofferedby the competition?
• Murugavel J: Yes, the featureagain is offeredby competitorsin a differentformand now this featurehas been implementedbut the video callingfeatureis availableacrossthe players.
• Archit Singhal: Sir, last question from my side, in the annual report there was a comment that Matrimonywill evaluate entering in certain global markets,so if you could shed more light on this, what is the cost of thisregarding?
• Murugavel J: Basically,we have offerings,we have Sri Lankan Matrimony,we have a couple of matrimony sites in South Asian market like BangladeshiMatrimonyand Nepali Matrimony,these are the things evaluatedbut Sri Lanka been fairly okay and we also had a Muslimmatch.comat global matchmakingofferingsfor the global Muslim communityagain some of the initiatives.I mean our plan is not only that be a leader in Indianmatchmakingbut we are also lookingat a progress opportunityin these markets,so again it dependson how the things evolve but we see traction in some of these markets, so we continue to monitor and achieve progress and look up at opportunityand growthese offerings.
• Sushanth Pai: I just wanted to add or clarify what Murugamentioned on the consolidationis that these keep happeningand we do not know the source of all of this because we are not in talk with anyone else and rather not anybodyelse is also in talks with us. Our view is that we need to concentrate on organicbusiness.We see tremendouspotentialin this market,we are doing all that it takes as a leadershipteam to make sure that we are in the right direction and our focus is on growth. I think what Murugameant is as a promoter as well as companythat is being over 20 years, we have no intentionsof any sale of any kind, I think that is what he was trying to allude to and so that is the situationright now. Inthe future if somethingcomes up, we will have to evaluate at

Thankyou.

Archit Singhal:

that point in time in terms of any consolidation.so that is the only point Ijust wanted to make it clear.

Moderator: Unknown Speaker: Murugavel J: Unknown Speaker: Sushanth Pal: Unknown Speaker: Sushanth Pai: Thankyou. The next questionis fromAmbitCapital.Pleasego ahead. Thank you for the opportunity.Ijust had a couple of questions.The first question is in terms of cost control and how this, how sustainableare the non-AMCcost cuts and is the scope to further reduce them? Sorry,your questionwas not clear, can youjust please repeat it? Ijust wanted to know in terms of cost controlshow sustainableare the non-AMCcost cuts and is that scope to furtherreduce them?That is the first question.Then the second question is on NRI business compared to the domestic business, can you quantify the impact of the rupee depreciationon the same? Yes, did you mean the two things that I understand is you said non-AMC, is that what you are asking? Yes, like employeecost etc? If you see we have taken cost optimizationmeasures on various fronts. So one is when we see employeeit is to see how effectivelywe can organizeourselvesin terms of for example,span of control, in terms of structure, in terms of productivity and all of this and like you know our business have some natural attrition, so there are some cause that we have taken that natural attritionwe will not replacebecause we have an opportunityto increaseproductivityeven with a current number of people, so that is one level of people optimization.The second is obviously because of the pandemic and everything;people are willing to get into a win-win situation. For example,on rentals, on infrastructurecost or even in terms of technology,for example,some of the costs we have been able to increase the tenure of the contractsthings like that, so I think all put together,we have done some cost interventions.These benefitswill continueduringthe year, for example,whateverwe have reduced in this quarterthat reduced cost will continue during the year as well. However,next year if things improve,may be some of the cost may come back but that is we have to evaluate at that point in time but the benefits of this quarter at a reduced cost will continue in the coming quarters as well. You had a question on NRI, because of the rupee depreciationand all of that, so it is not very significantin terms of the overall proportion for us and therefore the rupee depreciationhas been at a particularlevel during these times, so it does not create a very significantimpact because of the rupee fluctuationsfor us given the proportion ofNRl sales.

Unknown Speaker:

I just had one more question on our performance trends, so if we look at performance trends again comparedto some of the competitorsso if you couldjust shed some light like how we can look at this on anythinggoing forward?

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Murugavel J: Our business as online and our retail presence and we also have a retail presence and we also have personal matchmaking services. With respect to online. we are doing very well. Some aspect of businessthough impacted like retail and personal matchmakingservicesso in spite of that as we said that in June we were able to bounce back year-on-yeargrowth, so as you see in this quarter and see progress, we expect we are moving to double-digit growth, so both on a quarter-on-quarter basis as well as year-on-year basis. We expect the double-digit growth momentumto continue and that is how you will see the businessso while there were impact in the month of April and May right after that the lockdown,we were able to bounce back and we started delivering, all the steps what in terms of various improvementsand which all started ending this, so we see that in other company getting into double-digit growth, we expect that growthmomentumwould continueand we expectto growwell.

Unknown Speaker: Thankyou so much.

• Moderator: Thankyou. The next question is fromthe line of KhushGosranifrom VishuddhaCapital.Please go ahead.
• Khush Gosrani: Thank you for the opportunity,I have just one question,the decline in marriage servicesloss is due to reductionin sales or you have structurallyreducingcosts?
• Murugavel J: Definitelythe cost optimizationwas done in wedding services consideringthat large weddings are not taking place that defmitelyoptimizedthe cost there again a full benefits of optimization what we have done weddingservicesthat will take anotherquarter or so but one of the reason is that we expectthe lossesin weddingservicesgo into furtherdecline.
• Sushanth Pai: Also, if you recollectthe photographybusiness we slowly brought it down to get into a market placemodel.I think that somebenefit has been got it into the currentquarter as well because it is in final stages in terms of getting it off the radar. So that is also beneficial in terms of the weddingserviceslosses comingdown.

Khush Gosrani: Okayand whatwouldbe the path going forwardin thissegment?

Murugavel J: Weddingservicesat this point on we focusedon enhancingour product and servicesofferingand we have moved to the subscription business models but the outlook at this wedding services definitelythey are uncertainbecause as you all knowthat the weddings are not takingplace. Till that happens we have to wait and watch but you know, all the business is going to evolve but however we feel that once the market opens, once the COVID situation ends and once the weddingtakes place, we will get back on growth path of weddingservices,since this segmentis badly impactedand we are using this opportunityto do what we can do and at the sametime, we do get certain segment of vendorsto sign up those are the segments are not impactedtoo much and that is one of the thing we are lookingat, revenueon weddingservices comingfromsome of the segmentsthat we believe that we could be able to get the revenue going,so the thing is that outlook for wedding servicestill the COVID situation ends, it continuesgoing to be muted but

howeverwhen the things opens up we expect we will be able to accelerate strongly on wedding services.

Khush Gosrani: Thank you and one last question is the decline in ATV sequential decline is because of higher discountingwe havedone or is it any otherreason?

Murugavel J: In terms of the approachwhatyou are thinkingwith respectto pricing isthat it is lookingat a one single price we are looking at a segmented price based on the region of course the economic status there is lot of other criteria's as such. So, the objective is to increase the conversion and there are certainmarketswe all know that there is a competitionto get enoughto competeagainst competitormarketwhere it is quite high there. So, they are taking differentpricing strategiesand we expect that the price is going to be probablymay be in a similarrange or probably against it dependson favorableto offer a further discountas some segment.The objective isto increasethe revenue increasethe conversioneven if you must give discount in some segmentin some market. So, the reason for ATVdrop, yes, it isthe differentiatedpricesto differentsegments.

Khush Gosrani: Thankyou and all the best. That is, it frommy side.

Moderator: Thankyou. The next question is fromthe line of RiddhimaChandak from RohaAsset Managers. Pleasego ahead.

Riddhima Chandak: Good afternoon Sir. Thank you for the opportunity.My question is on the industry-widedata so in the last two years to three years how the industry has grown previously and what are your expectationsthat it would grow in the next fouryearsto five years?

Murugavel J: The last couple of years industry has becomehighly competitive and of course post our listing. However,we see that the outlook for our growth we are definitely exceeding at a good growth going forward because definitely a large adoption and people are moving to online, there is smartphonepenetration there are lot of things happening in the right direction. So, believe that also they have innovated competition also good because the increased awareness of the online matrimony facility by and large is going to benefit the industry. So, as a leader definitely we believe that we are well positionedto leverage these opportunities,while even in last couple of years definitely while we had our own challenges again we did communicate in a couple of quartersbefore, we are taking some or other internalinterventionto ensure that the organization is ready to the leverage the opportunityin the matchmakingspace. That some of the steps what we have taken in terms of our abilityto increaseour conversionall the things are falling in place, that is one of the reasons why in spite billingbeing lessin QI it still seemsthat because renewal has definitely contributed good for our business. Inspite of low billing in Ql and Q2 normally seasonalwe expect that even in Q2 we will be able to grow double-digit. So, that is outlook for the next four year-fiveyears definitely we expect that the growthmovementis going to continue because of the few reasons, one is about adoption of internet and smart phones, second is increasedawarenessin this categoryas people definitelychoosingonline matrimonyas a way to find a life partner. Whether 10%-15%-20%depends on how well you can execute it it, but you see that we are getting the double-digitgrowth startingthis quarter.We got a competitionwe do

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not know I cannot comment and talk because dependson how well we execute and depends on what are their plans but I can talk from our point of view we believe that we are going to be equippedand positionedto leveragethe opportunity.

Riddhima Chandak: Got it and in our pricing part currentlyour pricing as you said we are in a similarrange as it was in FY2020,going forwardwhat percentagewould increase in the next one year or two years so that it can increaseour ATV?

Murugavel J: I think the ATV is not the focus for us we are now probably may be in the same range. Our objective is to grow the number of subscriptions and revenue side. So, as on date there are different customers, different customersegments,so we must offer a differentiated choice and convertthese customers.So, that being the case I do not see whetherthere is any sudden increase in ATV until somethingchanges in that at least one item you can fairly assume that the ATV probablyin the similarrange.

Riddhima Chandak: Ijust wantto knowthat is there any levelsthat this isthe range for premiumcustomersor this is the range for mid-levelcustomersand lowerin the sense low priced any geographywise or so or isthis modelworksin our business?

• Murugavel J: Definitely,we offer variousprices and the varioussegmentsof customersso there is nothing like one standardprice. Again,there are multiple regions,multiple segmentsso that way that I would not say that this is the price for this particularsegment or customerit may seem there is varied experimentand see whetherwhatworkswith us
• Sushanth Pai: Pricing is a combination of what sort of duration of package you take right it could be three months, six months and one year so the pricing can change accordingly there. Second the category of customer you are for example you can be a basic matrimony customer who takes three months,six months or twelve monthsor you can be for examplewe have a separatebrand called Elite Matrimony so the pricing is very, very different from a basic customer in Elite Matrimony but however Elite Matrimony is a smaller proportion of our overall business so thereforeall these influencesfinallyhow the averagepricing is arrived at. So, that is the way to see the pricinghas big range froma basic to even to an Elite Matrimonysort of a customer.

Riddhima Chandak: Okay, so how many like we have approximately167,000paid customerswhat percentage is in the Premium or Elite Matrimony category and mid-level and lower-level categories as a percentage?

• Murugavel J: It is not a significantquarter part of our business, around 20% plus of the business comes from the personalizedservicesor lessthan that.Majorityhas come fromonline business.
• Sushanth Pai: The premium would be Elite and Assisted and like Muruga said it will be somewhere in the regionof 15%or so in that range and the remainingwould be the basic.

• Riddhima Chandak: Thank you forthe opportunity.

• Moderator: Thank you. The next question is from the line of Rajesh Ranganathan from Doric Capital Corporation.Pleasego ahead.

• Rajesh Ranganathan: Thanks a lot for the opportunity.We have mentionedafter April-Maywe had a decent recovery in June but overall our revenue in the matchmakingbusinessis still down year-on-yearwhich is differentfromthe commentarywe heard from InfoEdgerecentlythere they said they are growing that they said 25%-30% I understand it is from a different base but still it is quite a big difference. So, just wanted to understand your thought process and why we have different commentaryfromthe two businesses?
• Murugavel J: The thing is that to say Rajesh one is about that size. Secondone is about our business as I said we have some in retail business plus online business. Some of the business segment of us it is againwe have large retail presencebut some of these businessesare severelyimpactedcompared to the online business. So, again the personal matchmakingbusiness you have elite matrimony and that business is also impacted because elite customers would like to make payment post meetingthe salespersonin person by and large. So,some of these businessesimpactedbut if you look at online businessyou will start to get the answer.But the same is started bouncing and we are moving into double-digit growth from this quarter onwards. So, again one thing about that despite mix of our business offerings. We have done well as going back in June and we see the double-digitgrowth in this quarter. So, we see that this is coming back to the good growth and we expectthe momentumto continue.
• Rajesh Ranganathan: Fromcost managementperspectiveour marketingcostsif! read it correctly it is still about 31% of revenue for Q1 correctme if! am wrong. So, you did not see much scope to reduce that or it was pre-committed,and you could not changemuchduring that quarter?
• Murugavel J: No, in fact comparedto earlier plan we did increase the marketingbut just because we saw the upside on the business we had indicated that we thought the business will be down by 20%, actually we are able to reduce a losses in May and June we have bounced back in growth yearon-yearwhen we saw the opportunitywhen we saw the business bouncingback we have slightly increasedour marketing.So, I think the thing is we are able to optimize the cost and we expect that the marketingmoves up slightlyor more or so depends on how well you are able to achieve double-digit growth to support the business. So, we are looking at as you said while given the marketing moves up and we are still able to maintain the profit margins and one more thing I wantto tell you Rajeshbecauseof the Ql billing impactin Q2 so the billingwise will be doubledigit growth,revenuewill be in a single-digitgrowth.But all these thingsstart showing from Q3 onwards as revenue the full benefits of the increased growth we will see only from one more quarterdown the line fromQ3 onwards.
• Rajesh Ranganathan: During this period have we thought about whether we can shift more of our business and businessprocessesonline as opposedto as you said we still have the reasonableretail presence I can understand for elite matrimony probably remains somewhat offline but for the rest of our businesswhat is yourthoughtprocess?

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• Murugavel J: Definitely,we are tryingto push as manythings as online in factone thing definitelyyou willsee that shift in the number of shifts is going for online paymentswhich is quite a large in spite it dependencyon offline is come down so drastically. So, the continued push the payment many things are online. But the retail is for the ecosystem,is part of our offeringwhere definitely we are optimized some of our retail outlets. I think for the retails should continue and we have reduced the outlets large part of retails and will remain and continue to contribute also. But in termsof the revenuecontributorretail it is not too significantfor us but that will continue.
• Rajesh Ranganathan: Finally from me, everybody is cutting back on marketing spend so if you are still spending on that you probably can get more bank for the buck for this in the sense if your spending31% of sales too you probably getting more for it right because unit prices would have gone down or not?
• Murugavel J: But again, while we saw some of the things online in the monthof April-Maybut a few signs of progress,it is kindof movedup. But in termsof TV we definitelywe are able to get more forthis thing becauseprobablywhen not many will advertisewe are able to get somebenefit as well but as you progress how long this benefit is going to continue it will remain to be seen because we see that people are comingback and people start advertising.So, initiallywe did getsome benefit continue get benefits but again the benefit things are coming down because the more and more peoplewill cometo advertisethat will come down. Someof the things are dynamicand you have intelligentsystemthey are able to optimize the cost according to the demand but you also saw that even online category definitely that competition will be quite active. In some of the geographywe continuedrag and continueinvestto get ourshare ofthe profile and as you said we definitely increase our profile acquisition from some of the key market which is market like North andjust theyhave been growingfairlywell in this marketas well.

Rajesh Ranganathan: Thankyou so much.I will go back in the queue.

Moderator: Thank you. The next question is fromthe line of KhushGosranifrom VishuddhaCapital. Please go ahead.

Khush Gosrani: Whatisthe strategyto increaseconversionfromfree subscribersto paid?

Murugavel J: There are multiple things one is about the product and offeringsthat is one thing and our sales efforts and again combinationof leveragingproductsfeaturesand leverageAI and the sales effort again telecallerand other things plus also for varioussegments and differentiatedprices multiple things are happeningto the customerto go forpaid membership.

• Khush Gosrani: Just for my understandingas we go forward,and we see our paid subscriberis getting increased will the conversion ratio will look lower because the base is higher or is my understanding wrong?
• Murugavel J: Sir,I did not get whatis it can youjust repeat again?

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Matrimony.com Limited August 07,2020

• Khush Gosrani: Sir. as of now our conversionratio is around 15%froma free to paid subscribersif I have got that data point correctso as we move forwardeven thoughour free subscriberbase growsbut the paid subscribersgrowslowerthis conversionratiowould look lowereven thoughboth are increased?
• Murugavel J: Yes, the way to look at the conversionpercentagewhen the people register conversionshappens over a period of time. Our business has a mix of both the first-time conversion and renewal things. So, since the entire conversion happen in one year or in two years. So, looking at the particular months how many free profiles happened and how many paid profiles happened and lookingat that is convertedin percentageit is not the appropriateway to look at the percentageof conversions.Because this conversionhappen over a period of one year or so even you get some 50% profilesmoves up in a particularmonth the impactof the 50% profile increase in particular month is very minimum because only certain percentage of the members convert between the same month. Then the subscribed renewal also happens it is not immediately there are people who renew immediatelyafter of the expiry of paid membership and also there are people who renew before the expiry of paid membership. There are also people who even pause to renew theirsubscription.
• Khush Gosrani: I got it. Thankyou.
• Moderator: Thank you. The next question is from the line of Laxmi Narayan from IClcr Mutual Fund. Pleasego ahead.
• Laxmi Narayan: Thankyou. I see these number as paid subscriptionfrom 170,000in end of QI now as on end of QI how many are actually paid subscribers because in subscription it is essentially the total cumulativesubscriptionsbut ifl just look at the unique subscribershow much this numberwould be as of end ofJune?
• Murugavel J: The data reported is how many people have taken paid subscription during a particular quarter and that could be if you look at total paid subscription that will be definitely more than the numberof paid subscriptionthat happened in the first quarter because there are people who have taken six months package, there are people taken one year package also and that number definitely is more than the number of paid transaction happened during the particular which is goingto.
• Laxmi Narayan: No, not is it there are 1.7 subscriptionsso as on that day I just want to know how many are actually paid subscribers,I mean how many unique accountsthat are actually subscribed it will be less or it will be more?

Murugavel J: It will be more.The numberyou are talking about isthe numberof paid subscriptionson any day that numberis more than the numberof paid transactionshappenedduring the particularquarter.

Laxmi Narayan: Now to increase the number of paid subscribersto multiple let us say five times or so what are the three externalreasonsthat would actuallyshould happen and what are the three things which you can actually do internally a way to make it happen. Internally you may be doing your

marketingyou are improvingconversionetc.. right. But what are the external factorsthat would enable this as a catalystto bring it up?

Murugavel J: The external factorsare one is, I say that increase which is of internet,smartphonesand people adopting this category.So, these three things happen probably we see all these three things are happening and these things we can drive more differentsigning of online matrimonyplatform, and in terms of the conversionthat conversionis a functionof many things with online product and offerings and ability to convert, sales efforts. So, these three things that is sales efforts, productsize and the pricing strategy too to get more people to go for the conversion.So, these are the thingsI couldthink of to get morepeople to go for paid subscriptionand to get the people offsigningof going for freemembersgoing for a paid subscription.

• Laxmi Narayan: One of the external factorsyou mentionedthat it hasto be smartphonepenetrationand so on, do you see any specificthing that could happen to growmultifoldbecause if you think the customer segmentyou are targetingwhich is essentiallythe Millennialsetc.,right or it is fairly assumethat they are having the smartphoneconnections,etc., so is there any specific thing you expect that canjust increaseit multifold?
• Murugavel J: We see that the increasedadoption of the internet,smartphoneor people signing up around in matrimony platform that is happening, but it can further accelerate? Yes, it can accelerate because that is why we see the multiple factors are contributingtoday increase in that option, thanksto the Jio and the way covid for that matter hastaken shape the digital adaption has been good. So, it has already happened, whether it can accelerate, yes, possibly it can happen and again there is increased visibility in the matrimony also comes again to the competitor's visibility.I think all these factorsseemsto be contributingthe growth of this categorywe expect the momentumto continueand wait and see whetherit can furthergo up yesit can happen.
• Laxmi Narayan: Okay and internallywhat are the thingsthat you are doingto accelerateit?

Murugavel J: As I said it is aboutthe pricingstrategiesand the productstrategiesand the sales efforts.

Laxmi Narayan: Isthere that the price reducesto get more subscriberscoming in, is somethingthat happens,or it islike elasticor it is non-elastic?

Murugavel J: Again the pricing this is category depends on the customer segment but by and large the matrimonyis a category that the people sign up once in a lifetime and by and large seen in the past and wheneverwe increase the price we did not see the drop in conversion;however,today we get customersegment from across the peers and also some market as competitionwe also realize that some customersegment where we consider economic status because the comfort is where we use as online matrimony today online matrimony has been fairly getting a wider acceptance across the market. We understand that what is the pricing strategy, what you have adopted for where it was by and large in the metros and cities where there are people, I think consideringthat the new sign ups happening from across the tier we believe that it is right to offer on a differentset of price comparedto that kind of customersobviouslyfor matrimony.For

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the segment of the category to come back. yes. I think so but having said that we continue optimizingprice and set a segmentand continueofferdiscountsto certain segment.

Laxmi Narayan: Got it. Thankyou.

Moderator: Thank you. The next question is from the line of Prince Poddar from JM Financials.Please go ahead.

• Prince Poddar: Thanks for the opportunity.I had just one question.I wanted to understandwhether you have a differentstrategy when it comes to the South Indian part of India or against north and west, so essentiallyI mean to ask whetheris a pricing strategydifferential and also in terms of marketing promotionsetc.?
• Murugavel J: Sir, you are right due to the marketing strategies our pricing strategy varies from market to market as you believe that is necessary and important. We believe that is the way we will continuegoingto operate.
• Prince Poddar: Is there something or some metric you can share in that respect, so probably in terms of what percentageof your marketing spends were there to target the north and west market versus the southmarket?
• Murugavel J: So, we do not disclosethe marketingbudgetfor everymarketsegmentfor that competitivenature but again you look at the opportunity,you look at the competitiveintensity,accordingto you we now figure out what is the marketing strategy I would not say that marketing strategy is also constant. According to the trend, according to the opportunity, according to as I said, how the other players are behaving accordingto the strategy and all this is going to defend how you are going to spend but definitely in terms of the strategy yes, strategy different for various market segmentspricing also differentfor variousmarketsegments.
• Prince Poddar: Just one add-onto that question Sir, one of your competitorsof course have mentionedthat there is a kind of pricing competitiongoing on so does it happen that if the competitionreducesprices and just in a way the last question also mentioned, does it happen that when the competition reduces prices you also generally have to or is it generally an independent call to take the discount,more discountduring the quarteror pricingor aggressivepricing that kind of things?
• Murugavel J: Thankfullythat most of the market we are very strong and we need not worry about what price competitionis offering particularlyin the market like south and to the some extent east also we are very strong and we do not worry about tomorrowcompetitor offers zero price, we are not going to reduce our price and all, even the south there are certain segment somebody lower income set of segment obviously we tried to offer a lesser price because considering the socioeconomicscenario not because of the competition,we believe that I think it was right to offer. Whenit comesto a market like north and west, there is intense competition.However,it is importantmarket for us in future growth, and future strategybut consideringthat we are one of the leadersin that market but west we are doing fairly okay, I would say that except north it is

matrimon .com

Matrimony. com Limited August 07, 2020

one of the marketsthat is highly intense and that market where we think that after considering that we are one of the leaderswhile we continue growing our penetration.we have been seeing the increasedthe portfolio acquisition in north we have seen pretty good growth in the market. We are not getting specificof the market wise we are seeing good growth in northernmarket in fact it is one of the marketsreally grew well in the last quarter. So, that is the case we can say there is growth happening plus also that discount is in the market because the competitors are there. We think it is importantto offer discountedprice because when the customerhas a choice we think that we do not want also kind of act priceywhen you are a strong leaderin the market,it has been well insulated no matter what competition does in terms of pricing and other things becausewe have a lot numberof profiles,strongbrandrecalls,strongpenetrations.

• Prince Poddar: Just last one Sir frommy side. Hypothetically,let us say if therewas no competitionin north and west, let us say you were the only operatingcompanyin India, consideringthe amountof money being spent on Indianmarriages do you think you would have very big pricing power and you could probablypriceyour productmuchmorethan what it istoday?
• Murugavel J: We can definitely increaseour price, we can offer but again whether you want to know, I think that has been a case, definitely the price can go up because when there is no competitionand obviously we don't have to give discount, there is opportunity we have to increase our price; however, you know we do not want even more for hypotheticallythat being the case, do you want to double the price? No. I have to take up the price gradually because we do not want to create a defiance in that we are trying to be leveragethe opportunityorder but again most of us must adopt using all those things, so I think the gradual increase makes sense than a sudden increaseof price and all the thingsso that being hypotheticalanswer.
• Prince Poddar: Absolutely.That is very helpful.Thank you.

Moderator: Thank you. The next question is from the line of Laxmi Narayan from ICICI Mutual Fund. Pleasego ahead.

• Laxmi Narayan: Thanks again. If you look at your subscribersand when there are onsite profiles, now when you look at this conversionof these things, what are the things we are doing to convert them? Is it happens by their own habit of finding value in it or how do you entice them to do and is it somethingwhich you do specificallyfor a differentsegment like a mail in a Tier-I city or some kind of demographicselectionyou do to entice with the conversionbecause if you look at over the last couple of yearsthe number of subscriptionshave been on the lowerside much lessthan what you wouldbe happyabout,how do you do that?
• Murugavel J: We see that the conversion is moving up, as I said we are getting a double-digit growth we expectthe growthmove continue.

Laxmi Narayan: Sorry, I did not get that double-digit growth you mentioned because if I look at your annual report forthe last two yearsto three years, the numbershave been fairly around that, 7.5 lakhsof

matrimon .com

whereabouts right so in account of double-digit we are talking about the profile or the subscription?

• Murugavel J: So, I was talking about the billing growth, Obviously. the billing happens the subscription need to move up. However you know double-digit growth supposed to happen in the Q4, however because of the QI impact of the COVID we could not achieve the double-digit growth but again Q2 onwards we are getting a double digit growth.
• Laxmi Narayan: I am sorry to interrupt when you say double digit growth you name the billings right, or you name the underlying subscription growth. when you say double-digit what does it exactly means?
• Murugavel J: Double-digit growth what I mean is the billing growth that is the sale.
• Laxmi Narayan: So, leave the billing, if you look at the paid subscription I mean the unique subscribers you take that as a double-digit, how do you achieve that, that was my question, billing can be achieved by taking the prices that is one aspect right I understand completely but how would you make core subscriber growth that is what I am talking about?
• Murugavel J: In the future, growth will be led by paid subscriptions. It depends upon the different levels of intensity of people to make payments and their interest to get married. They need to see value before they pay. We create interest through product interventions to help them decide.
• Laxmi Narayan: Thank you Sir.
• Moderator: Thank you. I would now like to hand the conference over to the management for closing comments.
• Sushanth Pai: Thank you all for joining this call and hope all of you stay safe and healthy. If you have any questions you can write to us and we look forward to staying in touch in coming quarters as well. Thank you.
• Murugavel J: Thank you for joining the call and thanks for all your support and stay healthy, stay safe, and look forward to connecting next quarter. Thank you so much.
• Moderator: Thank you. On behalf of Axis Capital that concludes today's conference call. Thank you for joining us. You may now disconnect your lines.

(This document has been edited for readability)

Vijayanand S Company Secretary Matrimony.com Ltd. No: 94, TVH Beliciaa Towers, Tower 2, 10th Floor, MRC Nagar, Mandaveli, Chennai- 600028, Tamil Nadu, India. Phone: 044-49001919 Email: investors@.matrimony.com. CIN: L63090TN2001PLC047432