Matrimony.com Ltd Management Discussions

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. This involves risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. The Company does not undertake to update any such forward-looking statements unless it is required by law. The discussion and analysis should be read in conjunction with the Companys financial statements included in the Annual Report and the notes thereto. This discussion is based on the consolidated financial results of the Company.

GLOBAL ECONOMY OVERVIEW

The global economy exhibited remarkable resilience in 2024; however, the pace of growth remains slow. According to the

International Monetary Fund (IMF), global economic growth is estimated to be slower at 3.1% in 2023 compared to 3.5% in 2022. The global economy, already rattled by the ongoing Russia-Ukraine conflict, is now grappling with another geopolitical crisis, the

Israel-Hamas war. Furthermore, the Red Sea crisis has caused the biggest diversion of global trade in decades, leading to delays and heightened expenses for shipping lines. Despite tumultuous geopolitical events, disruptions in energy and food markets due to war, and aggressive monetary tightening to control inflation, global economic growth has decelerated but not halted. Market sentiments have improved and global equity markets have strengthened. Furthermore, acute stress in the banking sector has receded. Global inflation continues to recede faster than expected, although it remains above the target. Inflation is estimated to decline from 8.7% in 2022 to 6.8% in 2023.

OUTLOOK

The global economy is expected to maintain its resilience in 2024; however, the IMF projects sluggish global growth at 3.1% for the same year before rising modestly to 3.2% in 2025. The global economic outlook in 2024 will be impacted by elevated interest rates, withdrawal of fiscal support, low underlying productivity growth, a tight job market and economic uncertainties. Global headline inflation is expected to decrease to 5.8% in 2024 and to 4.4% in 2025. Furthermore, the prolonged Russia-Ukraine war and an escalation in the Middle East crisis could impact energy and commodity prices and the global supply chain, contributing to additional geo-economic fragmentation and posing downside risks for the global economy. However, positive factors, such as stronger-than-expected economic performance of the US and several large emerging market and developing economies, economic stimulus in

China, easing of supply chain bottlenecks and faster disinflation will bolster the outlook of the global economy. After rapid expansion in 2023, the Asia-Pacific (APAC) region is expected to be the fastest-growing region of the world economy in 2024, supported by robust domestic demand in East Asia and India.

(Source: IMF Economic Outlook Update January 2024, S&P Global)

INDIAN ECONOMY OVERVIEW

Amid a challenging global economic environment and deteriorating geopolitical conditions, India continues to shine as a bright spot.

India is the fifth-largest economy in the world and is poised to retain its position as the worlds fastest-growing major economy. Its GDP growth remained buoyant at 7.3% in FY 2023- 24 as against 7.2% in FY 2022-23, supported by robust domestic demand, moderate inflation, a stable interest rate environment, and strong foreign exchange reserves.

India had successfully harnessed inflation in FY 2023-24 which is still plaguing major advanced economies. Retail inflation is on a downward trajectory after reaching its peak at 7.44% in July 2023. In November, the retail inflation stood at 5.55%. The Reserve Bank of India (RBI) retains the CPI inflation forecast at 5.4% in FY 2023-24. Furthermore, the Interim Budget 2024-25 reflects the governments continued focus on inclusive development, economic stability, sector-specific developments, environmental sustainability and strategic global positioning. It sets the foundation for the vision of a ‘Viksit Bharat (Developed India) by 2047, focusing on demographic, democratic and diversity strengths.

OUTLOOK

Indias economic outlook is optimistic as it reaps the benefits of demographic dividend, physical and digital infrastructure enhancements, increased capital expenditure and the governments proactive policy measures such as PLI Schemes. According to the IMF, the Indian economy is expected to advance steadily at 6.5% in 2024.

While the global conflict remained geographically distant from India, there are potential risks to Indias economic growth and stability in FY 2024-25. However, Indias advantageous geopolitical position will help it capitalise on supply chain diversification and reshoring, increase its global competitiveness and boost exports. Amid a volatile global macro environment, the Indian economy is poised to emerge as one of the global economic powerhouses and become the third-largest economy in the world by 2030.

(Source: Ministry of Statistics & Programme Implementation, Reserve Bank of India, Ministry of Finance, IMF Economic Outlook Update January 2024, Economic Times)

DIGITAL INDIA

Overview

India has developed a world-class digital public infrastructure (DPI) and expanded internet access which bolstered the adoption of technology nationwide. The IMF commended India for its digital public infrastructure to support its sustainable development goals. Furthermore, the BharatNet initiative, which aims to bridge the digital divide and strengthen Indias digital prowess has been providing access to broadband connectivity to rural regions. So far, 210,190 Gram Panchayats are connected through the BharatNet project and 678,148 Km of optical fiber cable (OFC) has been laid. Additionally, 847,465 Fibre-To-The-Home (FTTH) connections are commissioned and 104,675 Wi-Fi hotspots are installed as of 22 January 2024 to ensure last-mile connectivity.

Indias digital public infrastructure, known as ‘India Stack includes initiatives such as Unified Payments Interface (UPI), Aadhaar, DigiLocker, Account Aggregators, and many more. DPI has played a pivotal role in enhancing financial inclusion by providing access to banking and financial services and promoting a paperless and cashless ecosystem in India. The government continues to focus on fortifying Indias public digital infrastructure. The Department for Promotion of Industry and Internal Trade (DPIIT) aims to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks through the Open Network for Digital Commerce (ONDC) initiative.

Indias UPI payments system has gained immense popularity for retail digital transactions in India, and its adoption is swiftly expanding globally. Several countries including France, the UAE, Singapore, and Sri Lanka have collaborated with India for cross-border transactions and collaboration of payment systems. The RBI and NIPL (NPCI International Payments Limited) have entered into agreements with financialinstitutions in more than 30 nations to extend UPI-based transactions.

(Source: Ministry of Communications, Ministry of Commerce & Industry, India Briefing)

Rising internet penetration

India has witnessed swift expansion in its internet landscape in recent years, propelled by affordable tariff plans. According to TRAI, the adoption of broadband in India has been growing rapidly. The broadband subscriber base increased from 888.27 million at the end of October 2023 to 896.61 million at the end of November 2023 with a monthly growth rate of 0.94%. A total of 857.98 million mobile wireless (mobile and dongle) were active in India as of 30^th November 2023. The number of total active internet users in India is expected to grow to over 900 million by 2025.

According to Ericssons Mobile data traffic outlook, Indias average data traffic per smartphone in 2023 was 31 GB per month which is estimated to grow to around 75 GB per month in 2029.

The rapid adoption of 5G services is expected to drive substantial growth in Indias data consumption. 5G is enabling the next phase of growth and transformation in Indias digital landscape, aligning with the governments vision to transform the country into a digitally empowered society and knowledge-based economy. Furthermore, the ‘100 5G labs initiative aims to develop 5G applications to stimulate innovation across various socio-economic sectors, marking a significant stride in establishing a 6G-ready ecosystem in the country.

(Source: TRAI press release- 29^th January 2024, TRAI report- ‘The Indian Telecom Services Performance Indicators April- June

2023, IBEF, Statista.com, Ericsson.com, Prime Ministers Office)

Start-up ecosystem in India

India is the third-largest start-up ecosystem in the world. Despite funding headwinds and regulatory changes, Indias tech start-up ecosystem continues to grow at an impressive rate. As per NASSCOMs report- ‘Weathering The Challenges- The Indian Tech Start-Up Landscape Report 2023, over 950 new tech startups were founded in 2023 bringing the total to over 31,000 tech start-ups in the country. Furthermore, India is home to 91 active unicorns in 2023. Mirroring global trends, Indian tech start-ups witnessed a substantial drop in funding value that reached a total of around $6 billion in 2023, 67% less than the preceding year. Deal volumes also dropped to 824 in 2024, down by 48% over the last year. New start-up creation also dropped to ~30% of last years level. The cumulative funding for tech start-ups has exceeded $70 billion from 2019 to 2023. Amid a challenging year, tech startups increased focus on business fundamentals. Around 60% of start-up founders reported an increase in revenue and profitability in 2023.

The ‘Startup India initiative has played a pivotal role in shaping the Indian startup landscape. The government has implemented multiple initiatives like the Startup India Seed Fund Scheme, Fund of Funds for Startups Scheme, Credit Guarantee Scheme for Startups, MAARG mentorship platform, National Startup Awards, and State Ranking Framework to promote start-ups in India. Moreover, programs such as ASCEND (Accelerating Startup Calibre & Entrepreneurial Drive) for the North-Eastern region, Women for Startups for women entrepreneurs and Startup Angels for aspiring angel investors contribute to fostering a supportive startup ecosystem nationwide. Additionally, the Department for Promotion of Industry and Internal Trade (DPIIT) launched ‘StartupShala flagship accelerator program during Startup India Innovation Week, 2024 for startups to encourage investments, networking and providing mentorship to startups. In the Interim Budget 2024, tax benefits to start-ups are extended until March 31, 2025, offering an additional stimulus to the sector.

(Source: NASSCOMs report ‘Weathering The Challenges- The Indian Tech Start-Up Landscape Report 2023, Startup India (DPIIT), Ministry of

Commerce & Industry, Ministry of Finance)

Surge in social media users

India has the second largest social media user base, with 755.47 million users in January 2024, which is expected to increase to

1,177.5 million by 2027. The social media penetration rate in India is 33.4%. An average user spends 2 hours and 24 minutes daily on social media platforms. Higher consumption of social media leads to a larger and more engaged audience. The escalating number of social media users and increasing time spent on these platforms are expected to drive the demand for online matchmaking services.

(Source: Demandsage.com)

INDIAN MATRIMONY MARKET

Large youth demographic

India is now home to the worlds largest population, having overtaken China in April 2023. India has a population of 1.44 billion as of 1^st January 2024, registering a growth rate of 1.26% growth over the previous year. 51.6% of Indias population is male, while 48.4% of Indias population is female. India has the worlds largest young population, with a median age of 26.7 years. Around 66% of Indias population is below the age of 35. The large youth demographic, rapid digital adoption and changing attitudes towards marriage and relationships in India are expected to fuel the growth of the online matrimony market.

(Source: countrymeters, Livemint.com)

Online matrimony market in India

The wedding industry is growing expeditiously in India, propelled by rising disposable income and aspirations of Indian youths, the influence of social media, rapid urbanisation and the emergence of wedding technology. The industry recorded an earning of

Rs. 4.74 lakh crore in 2023, signifying a substantial 26.4% surge compared to 2022. The wedding market in India is poised for sustained growth, fueled by the huge population of approximately 600 million in the marriageable age group. Moreover, the trend of brides and grooms sharing wedding expenses has emerged in India due to increased financial independence. An impressive 70% of brides and grooms contributed financially to their weddings in 2023 and 21.1% of couples shared half of the total wedding expenses. This trend is expected to persist in 2024 and create ample growth opportunities for the wedding market. Furthermore, the Prime Ministers call for "Wed in India" has paved the way for a potential influx of Rs. 1 lakh crore into the country, redirecting expenditures incurred on destination weddings abroad. This initiative is expected to fuel the growth of the wedding industry in India in the coming years. While arranged marriages are common in India, online matrimony services have transformed the Indian wedding industry. Young Indians are now embracing matrimonial sites to seek potential life partners, with a rising number of individuals from Tier II and Tier III cities turning to online matrimonial platforms. The surge in digital adoption, widespread internet penetration, increasingspending power, shifting consumption patterns and the rising prevalence of digital payment methods are driving the expansion of the online matrimony industry and the wedding market.

(Source: Business Standard, Economic Times)

Strengths and Opportunities

Robust brand recognition and market positioning: The Company has established its reputation as the market leader in the Indian online matchmaking space, boasting a rich legacy spanning over two decades. It provides both matchmaking and marriage-related services through websites, mobile sites, and mobile apps and an active on-the-ground network. The Company has the most extensive array of online matchmaking platforms tailored to accommodate individual choices and preferences. The Company also has a strong offline presence through more than 110 retail outlets across India. the largest market share of 60% in the online matchmaking market in India. As of 31^st March 2024, the paid subscriptions of the Company stood at 10.74 lakhs compared to 9.94 lakhs on 31^st March 2023, registering a y-o-y growth of 8.03%.

Micro-market strategy: The Company differentiates itself from other industry players in India by following a micro-market strategy to captivate maximum audience. It has been at the forefront in catering to the unique regional and community matchmaking requirements of Indian consumers and offering tailored and focused services.

One-stop shop: The Company has forward integrated into providing marriage services across the value chain. It has emerged as a one-stop shop for its customers in an asset-light vendor platform for venue bookings, catering, decorations, etc. Its WeddingBazaar online marketplace offers a range of wedding-related services, encompassing vendors for photography, makeup, mehendi, wedding planning, catering, decorations, etc. Furthermore, Mandap.com is a wedding venue booking platform that offers the convenience of reserving mandaps, banquet halls, and convention halls across the country. The Company remains committed to leveraging its collective strengths to propel the wedding services business to new heights, offering marriage services through a network of over 200,000 vendors across 40+ cities.

Entering adjacent segments to capture new customers : The Company has launched MeraLuv.com , an exclusive dating app for Indian Americans. Soon it also plans to launch Luv.com, an App in the matchmaking space to address Next Generation (Next-Gen) serious relationships. The offering will focus on the theme of "love" before marriage, thereby building a clear differentiation and addressing the market potential.

FINANCIAL PERFORMANCE

The following table gives an overview of the consolidatedfinancialre sults of the Company:

Particulars	FY 2023-24	% to total income	FY 2022-23	% to total income	Growth %
	(Rs. Lakhs)		(Rs. Lakhs)
Revenue from Operations	48,136	99.73%	45,577	98.38%	5.62%
Other income	131	0.27%	751	1.62%	(82.56%)
Total income	48,267	100.00%	46,328	100.00%	4.19%
Expenses
Employee benefit expenses	13,968	28.94%	14,410	31.10%	(3.07%)
Advertising and business promotion expenses	18,682	38.71%	18,230	39.35%	2.48%
Other expenses	8,272	17.14%	6,193	13.37%	33.56%
Total expenses	40,922	84.78%	38,833	83.82%	5.38%
Earnings before interest, tax, depreciation, and amortization (EBITDA)	7,345	15.22%	7,495	16.18%	(2.00%)
Depreciation & amortization	2,840	5.88%	2,997	6.47%	(5.27%)
Finance cost	517	1.07%	591	1.28%	(12.45%)
Finance income	(2,484)	(5.15%)	(1,687)	(3.64%)	(47.20%)
Profit before tax and share of profit/ (loss) from associate	6,472	13.41%	5,594	12.07%	15.72%
Share of profit/ (loss) from associate, net of taxes	(1)	-	(1)	-	63.90%
Profit before tax (PBT)	6,471	13.41%	5,593	12.07%	15.71%
Tax Expense	1,516	3.14%	926	2.00%	63.73%
Profit after tax (PAT)	4,955	10.27%	4,667	10.07%	6.18%

Revenue: Overall revenue grew by 5.62% for the year. The revenue distribution is through two segments such as Matchmaking and marriage services. The segment-wise performance is given in the table later in the discussion. Matchmaking comprises 98.13% of revenues and grew by 5.91% in FY24 as compared to a growth of 3.64% in FY23. The matchmaking billings grew by 5.21% in FY24 as compared to 3.94% in FY23. The key drivers for this business are the number of paid profiles and Average Transaction Value (ATV). The paid profilesare at 10.74 lakhs, an increase of 8.03% over the previous year. ATV is at Rs. 4,379, a decrease of 2.54% over the previous year as part of the segmentation strategy. The company typically has subscription packages ranging 3 months, 6 months and 1 year and the subscription billings are recognized as revenue over the subscription period.

Other income: Other income majorly includes notional gain from closure of leased locations accounted under Ind AS 116 "Leases" and profit on sale of assets. Other income in FY 2023 was higher on account of one time profit on sale of land amounting to

Rs. 581 lakhs.

Expenses:

Employee benefit expenses:Employee benefit expenses have decreased by Rs. 442 lakhs mainly due to reduction in head count.

Advertising and Promotion Expenses: Current year marketing expenses are in line with previous year spend with a marginal increase at 2.48%. These are ongoing investments to fuel future growth and increase brand visibility.

Other expenses: Other expenses mainly comprise IT, infrastructure & facility management cost, collection charges, legal & professional charges and other administrative expenses which have increased by Rs.2,079 lakhs. This was mainly due to increase in collection charges (Rs.1,740 lakhs - collection charges increase is mainly on account of disputed service fee on account of google litigation, made on a best estimate basis), an increase in Infrastructure & facilities management expenses (mainly on account of new retails added & rental escalations during the year Rs. 95 lakhs), increase in legal & professional charges (Rs.126 lakhs – primarily on account of google legal cases) and increase in other admin expenses (Rs. 153 lakhs). This was offset by the decrease in travel expenses (Rs. 22 lakhs) and decrease in IT related cost (Rs. 13 lakhs). Overall, as a % of total income, it has increased by 3.77% as compared to the previous year (17.14% in FY24, 13.37% in FY 2023).

EBITDA margins: Our EBITDA margins are at 15.22% as compared to 16.18% in FY23, indicating a decrease of EBITDA by 1.98% in FY 2024. If not for google provision as discussed above, EBITDA margins for FY 2024 would have been higher by around 400 bps.

Finance income: Finance Income consists mainly of income from investments of surplus funds in fixed deposits (FD), mutual funds

& Tax free bonds. The increase in income is on account of increase in FD interest rates during the year and an increase in the yield of mutual funds.

Finance cost: Finance cost mainly consists of notional interest on lease liabilities charged to Profit and Loss account as per Ind

AS 116.

Effective Tax Rate (ETR): The effective tax rate is at 23.42% in FY24 as compared to 16.55% in FY23. FY 2023 had a lower tax due to lower tax on realized gains on mutual funds on account of the buy-back and profit on land sale (taken as long term with indexation benefit).

Profitability:Our PAT margins in FY 2024 are at 10.27% as compared to 10.07% in FY23, indicating a growth of PAT by 6.18% for FY 2024. If not for google fee provision, PAT % for FY 2024 would have been higher by around 300 bps.

SEGMENT PERFORMANCE

The following tables depict an overview of the segment performance of the Group:

Revenue	FY 2023-24	FY 2022-23
Matchmaking Services	47,237	44,603
Marriage Services	899	974
		( Rs. lakhs)
EBITDA	FY 2023-24	FY 2022-23
Matchmaking Services	9,869	9,553
Marriage Services	(1,034)	(1,300)
Key Ratios
Revenue	FY 2023-24	FY 2022-23
EBITDA margin	15.22%	16.18%
Net profit margin	10.27%	10.07%
Return on Net worth	18.20%	16.57%

CASH FLOWS

The Company spent Rs. 1,982 lakhs as capital expenditure during the year. Consequently, the Company generated a free cash flow of Rs. 4,138 lakhs of cash during the year taking the cash balance as of 31^st March 2024 to Rs. 35,831 lakhs. The EBITDA to operating cash flow conversion has been strong at 0.83 times and EBITDA to free cash flow is at 0.56 times.

HEADCOUNT

The total number of employees (excluding subsidiaries and associates) as of 31^st March 2024 is 2,713 compared to 3,172 as of 31^st March 2023.

STRATEGY AND OUTLOOK

The Companys key strategic focus areas for FY 2024-25 are as follows:

• Accelerate Jodii, Retail outlets and personalized services to enhance growth in matchmaking

• Consistently enhance product differentiation based on customer preferences, behaviour and evolving trends

• Enter new segments such as MeraLuv.com and Luv.com to address non customers

RISK MANAGEMENT

Risk Management is an integral part of the Companys strategy and planning process. Based on the proactive identification of potential risks, the Company formulates action plans to mitigate the risks that could materially impact its long-term sustainability.

Mitigation plans with identified owners are set against target dates and the progress of mitigation actions is monitored and reviewed. The Companys robust risk management framework enables it to proactively identify, assess, monitor and mitigate the risks associated with its business and operational activities. The Company‘s Risk Management and ESG Committee is responsible for identifying and mitigating risks. It reports to the Board of Directors who sit at the apex of the corporate governance framework. Some of the key risks and their corresponding mitigation measures during the year under review are as follows: