Statements in the Management Discussion and Analysis describing the
Company?s 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 Company?s 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 is witnessing signs of resilience and recovery in
2023 after the sharp economic slowdown in 2022. The slowdown is expected to be less
pronounced in 2023 than previously anticipated. However, geopolitical instability, the
Russia- Ukraine war, lingering supply chain challenges, higher inflation, tighter monetary
conditions and interest rate hikes impacted global economic growth in 2022. The longer
than expected war between Russia and Ukraine will continue to weigh on economic activity
and contribute to soaring fuel and commodity prices in 2023. Despite the headwinds, the
real GDP grew in the United States, the European Union, and major Emerging Market and
Developing Economies (EMDE). The International Monetary Fund (IMF) has projected global
growth to decline from 3.4% in 2022 to 2.9% in 2023 and rise to 3.1% in 2024. The growth
of advanced economies is projected to decline sharply from 2.7% in 2022 to 1.2% in 2023
before rising to 1.4% in 2024. The emerging market and developing economies also grew at
an estimated annual rate of 3.9% in 2022 and are projected to grow to 4.0% in 2023 and
4.2% in 2024.
OUTLOOK
Though the global economy is suffering from underlying inflation
pressures, the outlook is less disappointing than previously projected. According to the
IMF, global financial conditions have eased since October 2022. With the central
banks? efforts to curb inflation by tightening monetary policy and hiking the
interest rates, global inflation is projected to decline from 8.8% in 2022 to 6.6% in 2023
and 4.3% in 2024. The global economy is expected to pick up modestly in 2024, as
inflationary pressures are expected to abate and energy markets are expected to stabilise.
Emerging economies are expected to dominate global economic growth in 2023. China and
India are expected to be the major contributors to the growth and are expected to account
for 50% of the global economic growth in 2023.
(Source: IMF World Economic Outlook, January 2023; U. S. Bureau of
Economic Analysis; World Bank Report- Global Economic Prospects, January 2023)
INDIAN ECONOMY OVERVIEW
India continues to be among the fastest-growing economies in the world
in FY 2022-23. Despite external exogenous shocks, the Indian economy registered healthy
growth in FY 2022-23. As per the second advance estimate of National Income FY 2022-23
released by the National Statistical Office (NSO), the growth in GDP during 2022-23 is
estimated at 7.0% as against 9.1% in FY 2021-22. The accelerated pace of economic reforms
has led to the higher and more sustainable growth of the Indian economy and strengthened
its position in the world.
Higher inflation remains a challenge throughout FY 2022-23. The Reserve
Bank of India (RBI), in its efforts to control inflation and boost economic growth, has
increased the repo rate by 250 basis points in FY 2022-23. Further, in the Union Budget
202223, the government focussed on giving the necessary push to the economy with an
increased allocation of 7 10 lakh crore for infrastructure development. As per the Budget,
India?s export is expected to grow at 12.5% in 2023, which will further boost the
economy. Moreover, the combined Index of Eight Core Industries (ICI) increased by 6.0%
(provisional) in February 2023 as compared to the Index of February 2022. The industrial
sector witnessed a modest growth of 4.1% in FY 2022-23 compared to the strong growth of
10.3% in FY 2021-22 on account of increasing input costs, supply chain disruptions, and a
slowdown in the global economy. However, India?s IIP growth of 5.2% Y-o-Y and 3.7%
growth in the manufacturing sector in January 2023 present signs of optimism for the
economy.
OUTLOOK
The outlook remains robust and the Indian economy is expected to
advance steadily in 2023. The IMF projects the Indian economy to expand at 6.1% in FY
2023-24 before rising to 6.8% in FY 2024-25. The optimistic growth stems from positive
factors such as the rebound of private consumption, increased production activity, rapid
infrastructure development, industrial development, improvement in capacity utilisation,
and revival in credit growth. However, there remains considerable uncertainty due to the
fragile global economic conditions.
(Source: National Statistical Office, Reserve Bank of India, World Bank
Report- Global Economic Prospects January 2023, Ministry of Statistics and Programme
Implementation, Ministry of Commerce and Industry, Tradingeconomics.com, Groww.in, IMF
Report- World Economic Outlook Update January 2023)
DIGITAL INDIA
India has developed a strong foundation of digital infrastructure and
expanded internet access across the country. India has been digitalising at a rapid pace
driven by factors such as growing broadband penetration, technological advancements, low
costs of data usage, and the government?s focus on enhancing digital infrastructure
and internet accessibility. In the Union Budget 2023-24, digitisation has been a major
focus area. The government?s flagship programme ‘Digital India? has
received a push with an outlay of 7 4,795.24 crore in the Budget as part of the
governments vision to transform India into a digitally-empowered society and to create a
technology-driven and knowledge-based economy. Another initiative is the establishment of
three dedicated centres of excellence for artificial intelligence (AI) to promote the
creation and use of AI in India. The government has been taking proactive measures to
develop public digital infrastructure. Further, the rapid growth of the information
technology (IT) industry has driven the digital revolution in India. India has witnessed
significant progress in financial inclusion in recent years with expanded access to
banking and financial services through digitisation, digital identity Aadhaar, Unified
Payments Interface (UPI), and other initiatives such as e-RUPI, TReDS, Account
Aggregators, ONDC, etc. Further, DigiLocker and MyGov which offer a paperless ecosystem,
and Co-Win for the wide-scale vaccination in the country are important milestones in
India?s public digital infrastructure. Strong digital infrastructure and widespread
adoption of technology will further bolster Indias vision of a $1 trillion digital
economy by 2025.
(Source: InvestIndia, IBEF, Economic Survey 2022-23)
• Increasing internet and smartphone penetration
According to the Telecom Regulatory Authority of India (TRAI), India
recorded 832.20 million active internet users as of 31st December, 2022. As per
Cisco?s Annual Internet Report, India?s internet user base is expected to cross
907.4 million by 2023. A total of 1.10 billion cellular mobile connections were active in
India in early 2023, with this figure equivalent to 77% of the total population. Broadband
usage in India has been growing at an unprecedented pace. India provides the lowest price
for per GB of data consumed, with an average cost of 7 50 (US$ 0.6) per GB. India also has
the highest data consumption in the world, with an average per-user consumption of 14.1
GB. The government?s initiatives like BharatNet Fibre project and investments in
developing 5G and 6G infrastructure aim to provide affordable and quality Internet to the
citizens.
(Source: Datareportal.com, IBEF)
• Thriving Start-up culture
India is the third-largest tech start-up ecosystem in the world after
China and the United States. Indias digital ecosystem has witnessed significant growth,
backed by a thriving startup culture. Digitisation provided an impetus to the emergence of
the start-up ecosystem and entrepreneurship among the young population. In Union Budget
2023-24, the government has proposed to provide tax incentives and extend the period of
incorporation of eligible startups by one more year till March 31, 2024.
As per NASSCOM (National Association of Software & Services
Companies) Tech Start-up Report 2022, 1,300 new tech startups and 23 new unicorns have
been added to Indias tech ecosystem in CY 2022. Indian start-up ecosystem raised $ 24
billion in CY 2022, which is ~33% less (YoY) as compared to $35 billion in CY 2021.
Despite a decline in overall funding in CY 2022, funding into early-stage deals grew by
nearly 12%. Indian startups raised a total of $ 3 billion in Q1 CY 2023, which is 75% less
(YoY) compared to the $12 billion raised in Q1 CY 2022. The government has taken several
initiatives to strengthen the start-up ecosystem in the country including the flagship
schemes, Startup India Seed Fund Scheme (SISFS) with a corpus of 7 945 crore for the next
4 years starting from FY 2021-22, Fund of Funds for Startups (FFS) with an allocation of 7
10,000 crore and Credit Guarantee Scheme for Startups (CGSS).
(Source: NASSCOM Tech Start-up Report 2022, PwC Report- India start-up
deals tracker CY22, Ministry of Commerce & Industry)
• Rise in the number of social media users
The number of social media users in India was 467 million in January
2023, equating to 32.8% of the total population. 26.5% of India?s social media users
were female, while 73.5% were male. An average user spent 2.8 hours daily on social media.
The rapidly increasing number of social media users and increasing time spent are likely
to boost the demand for online matchmaking services.
(Source: Datareportal.com)
INDIAN MATRIMONY MARKET Large youth population in India
India is the second-most populous country in the world with a
population of 1.42 billion as of January 2023, registering a 0.81% y-o-y growth over the
previous year. 48.4% of India?s population is female, while 51.6% of the population
is male. India has one of the youngest populations in the world, with a median age of 28.2
years. India?s large young population and rapid pace of urbanisation are expected to
propel the growth of the online matrimony market.
Online matrimony market in India
The wedding market in India has witnessed a surge with 3.2 million
wedding events organised between November 2022- February 2023 and generated business of ~7
3.75 lakh crore. The wedding market in India will continue to flourish owing to the huge
population in the marriageable age bracket. Increased digital adoption and penetration of
the internet have accelerated the growth of the online matrimony market in India. More
young Indians prefer a matrimonial site rather than a traditional approach. Emerging
markets such as tier-II and tier-III cities are likely to create ample growth
opportunities for the market, owing to the increasing number of social media users,
changing consumption patterns, improved living standards, increasing use of digital
payment methods such as UPI (United Payments Interface), Paytm, etc. for buying a paid
membership.
(Source: Macrotrends.net, Datareportal.com, ICICI Direct, Money
Control, Statista)
As per our Online Matrimony Trends Report 2022, around 280 million
members logged in during 2022 from India and abroad. An average of 13,000 interactions per
minute happened between members to find their life partner. Further, the Report highlights
some of the emerging matrimony trends in 2022 such as Sundays being the most active days
and singles between the age group of 25- 29 years comprising the majority of the overall
users.
Strengths and Opportunities
Market position and brand recall: The Company has a rich legacy and
experience of more than 2 decades in matchmaking services. Leveraging this, it has emerged
as the frontrunner in the matchmaking business in India, servicing its customers via
websites, mobile sites, mobile apps and an active on-the-ground network. As of 31 March
2023, the paid profiles of the Company stood at 9.94 lakhs compared to 8.94 lakhs on 31
March 2022, registering an 11.19% y-o-y growth. Due to the strong brand recall, the
Company has a majority market share of 60% in the online matchmaking space in India.
Micro-market strategy: The Company has been a pioneer to cater to the
unique regional and community matchmaking requirements of Indian consumers as well as
offers customised and targeted services.
One-stop shop: The Company has forward integrated to provide marriage
services across the value chain. Its WeddingBazaar online marketplace provides
wedding-related services. On the other hand, Mandap.com is a wedding venue booking
platform, which provides facilities to book mandaps, banquet halls, and convention halls
across the country. With the integration of ShaadiSaga complete, the Company is ready to
capitalise on the combined strengths to lead the wedding services business to newer
heights with over 200,000 vendors in 40 cities.
FINANCIAL PERFORMANCE
The following table gives an overview of the consolidated financial
results of the Company:
| Particulars |
FY 2022-23 |
% to total |
FY 2021-22 |
% to total |
Growth % |
|
Lakhs |
income |
Lakhs |
income |
|
| Revenue from Operations |
45,576.92 |
98.38% |
43,449.56 |
99.32% |
4.90% |
| Other income |
751.13 |
1.62% |
297.85 |
0.68% |
152.18% |
| Total income |
46,328.05 |
100.00% |
N=RIGHT>43,747.41 |
100.00% |
5.90% |
| Expenses |
|
|
|
|
|
| Employee benefit expenses |
14,409.60 |
31.10% |
13,231.69 |
30.25% |
8.90% |
| Advertising and business promotion expenses |
18,230.62 |
39.35% |
16,212.10 |
37.06% |
12.45% |
| Other expenses |
6,193.19 |
13.37% |
5,308.00 |
12.13% |
16.68% |
| Total expenses |
38,833.41 |
83.82% |
34,751.79 |
79.44% |
11.75% |
| Earnings before interest, tax, depreciation, and amortisation
(EBITDA) |
7,494.64 |
16.18% |
8,995.62 |
20.56% |
(16.69%) |
| Depreciation & amortisation |
2,997.21 |
6.47% |
2,690.68 |
6.15% |
11.39% |
| Finance cost |
590.75 |
1.28% |
536.00 |
1.23% |
10.21% |
| Finance income |
(1,687.32) |
(3.64%) |
(1,496.23) |
(3.42%) |
12.77% |
| Profit before tax and share of profit/ (loss) from associate |
5,594.00 |
12.07% |
7,265.17 |
16.61% |
(23.00%) |
| Share of profit/ (loss) from associate, net of taxes |
(0.96) |
- |
(78.95) |
(0.18%) |
98.78% |
| Profit before tax (PBT) |
5,593.04 |
12.07% |
7,186.22 |
16.43% |
(22.17)% |
| Tax Expense |
925.80 |
2.00% |
1,827.07 |
4.18% |
(49.33%) |
| Profit after tax (PAT) |
4,667.24 |
10.07% |
5,359.15 |
12.25% |
(12.91)% |
Revenue: Overall revenue grew by 4.90% 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 97.86% of revenues and grew by 3.64% in FY23 as compared to a growth of 14.54%
in FY22. The matchmaking billings grew by 3.94% in FY23 as compared to 12.23% in FY22. The
key drivers for this business are the number of paid profiles and Average Transaction
Value (ATV). The paid profiles are at 9.94 lakhs, an increase of 11.14% over the previous
year. ATV is at 7 4,493, a decrease of 6.50% over the previous year as part of the pricing
strategy. The Company typically has subscription packages ranging 3 months, 6 months and 1
year and the subscription billings are recognised as revenue over the subscription period.
Other income: Other income mainly includes profit on the sale of assets
held for sale amounting to 7 581 lakhs and notional gain from closure of leased locations
accounted under Ind AS 116 "Leases".
The Company had in 2017, purchased land for construction of office
premises, out of the proceeds from the fresh issue of equity shares during its initial
public offering (‘IPO?). The entire IPO proceeds were fully utilised and
confirmed by the monitoring agency?s report. However, the management decided not to
pursue the construction of office premises post the COVID-19 pandemic. Accordingly, the
Board of Directors and the Shareholders of the Company approved the change in objects on
March 31, 2022 and May 08, 2022 respectively, enabling the Company to sell the land.
During the year ended March 31, 2023, the Company completed the sale of land for a gross
total sale consideration of 7 4,941 lakhs. Accordingly, the Company has recognised a
profit of 7 581 lakhs on account of such sale during the year ended March 31, 2023.
The consideration realised from the sale transaction has been deposited
into a separate bank account and such amount will be utilised for marketing expenses, as
approved by the Board of Directors and the Shareholders. Further, the Company has
appointed a monitoring agency to oversee the utilisation of the sale proceeds in
accordance with the approval of Shareholders. During the quarter and year ended 31st March
2023, the Company had utilised 7 1,187 lakhs towards marketing expenses out of the sale
proceeds 7 4,892 lakhs (net of TDS) and 7 3,705 lakhs remain unutilised at the end of the
period.
EXPENSES:
Employee benefit expenses: Employee benefit expenses have increased by
7 1,177.91 (8.9% higher than PY) lakhs mainly due to yearly increments in salary and an
increase in staff welfare expenses.
Advertising and Promotion Expenses: We increased our marketing
initiatives significantly during the year by 7 2,018.52 lakhs, comprising both online and
offline segments. These are ongoing investments to fuel future growth and increase brand
visibility.
Other expenses: Other expenses mainly comprise IT, infrastructure,
administration, legal and professional fees which have increased by 7 885.19 lakhs. This
was mainly due to an increase in expenses in IT-related costs majorly due to an increase
in web hosting expenses, tech fees, SMS and domain charges (7 540.37 lakhs), an increase
in Infrastructure management (mainly repairs and maintenance, office upkeep expenses of 7
201.32 lakhs), increase in travelling expenses (7 95.39 lakhs) and increase in other admin
expenses (7 83.13 lakhs). This was offset by the decrease in legal and professional
expenses (7 23.85 lakhs) and communications expenses (7 11.17 lakhs). Overall, as a % of
total income , it has increased by 1.24% as compared to the previous year (13.37% in FY
23, 12.13% in FY 22).
EBITDA margins: Our EBITDA margins are at 16.18% as compared to 20.56%
in FY22, indicating a decrease of 16.69%. This is mainly due to an increase in advertising
expenses. Excluding advertising expenses, EBITDA margins are at 55.53% as compared to
57.62% in FY22.
Finance income: Finance income consists mainly of income from
investments of surplus funds in fixed deposits, mutual funds and tax free bonds. The
increase in income is due to an 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 PL as per Ind AS 116.
Effective Tax Rate (ETR): The effective tax rate is at 16.55% in FY 23
as compared to 25.42% in FY22. The decrease in ETR is mainly driven by a lower tax on
realised gains on mutual funds due to the buy-back explained below and land sale (taken as
long-term with indexation benefit).
Buyback of Equity Shares:
The Board of Directors at its meeting held on May 12, 2022, approved a
proposal to buyback up to 6,52,173 equity shares of the Company for an aggregate amount
not exceeding 7 7,500 lakhs, being 24.24% and 24.36% of the aggregate of the total paid-up
equity share capital and free reserves of the Company based on the audited standalone and
consolidated financial statements respectively as at March 31, 2022, at a price not
exceeding 7 1,150 per equity share subject to approval from shareholders. Subsequently, on
June 18, 2022, the shareholders approved the buyback of equity shares and on June 22,
2022, the buyback committee of the Board of Directors approved the final buyback price of
7 1,150. The record date for determining the buyback entitlement was determined to be July
4, 2022, and the tendering period for the buyback commenced from July 26, 2022 to August
08, 2022. The Company completed the buyback of shares by August 22, 2022, and extinguished
the shares by August 26, 2022. The Company paid tax on buyback of 7 1,740 lakhs and
incurred 7 131 lakhs as expenses towards the buyback of equity shares. The aforesaid tax
on the buyback and expenses are accounted as a reduction from the equity during the year
ended March 31, 2023.
Profitability: Our PAT margins are at 10.07% as compared to 12.25% in
FY22, indicating a decrease of 12.91%.
SEGMENT PERFORMANCE
The following tables give an overview of the segment performance of the
Company:
| Revenue |
FY 2022-23 (Rs lakhs) |
FY 2021-22 (Rs lakhs) |
| Matchmaking Services |
44,602.50 |
43,036.44 |
| Marriage Services |
974.42 |
413.12 |
| EBITDA |
FY 2022-23 (Rs lakhs) |
FY 2021-22 (Rs lakhs) |
| Matchmaking Services |
9,553.71 |
11,171.56 |
| Marriage Services |
(1,300.46) |
(955.30) |
KEY RATIOS
The Company has identified the following ratios as key ratios:
|
FY 2023 |
FY 2022 |
| EBITDA margin |
16.18% |
20.56% |
| Net profit margin |
10.07% |
12.25% |
| Return on Net worth |
16.57% |
18.68% |
CASH FLOWS
The Company spent 7 647.64 lakhs as capital expenditure and spent 7
9,371.28 lakhs towards the buyback of equity shares (including tax and expenses on
buyback) during the year. Consequently, the Company generated a free cash flow of 7
5,071.35 lakhs of cash during the year taking the cash balance as at 31st March
2023 to 7 32,453.91 lakhs. The EBITDA to operating cash flow conversion has been strong at
0.76 times and EBITDA to free cash flow is at 0.68 times.
HEADCOUNT
The total number of employees (excluding subsidiaries and associates)
as of 31st March 2023 is at 3,172 as compared to 3,405 as of 31st
March 2022.
STRATEGY AND OUTLOOK
The key strategic focus areas for FY 2023-24 are as follows:
• Sharper segmentation to make sure all customer needs are
addressed adequately and thereby improving conversion
• Driving growth through new initiatives for all products
• Consistently improve product differentiation in line with
customer behaviour and trends
• Capitalise on the fully integrated wedding services business to
drive accelerated growth
RISK MANAGEMENT
Risk Management is an integral part of the Company?s strategy and
planning process. Based on the proactive identification of risks, action plans are devised
to mitigate the risks that could materially impact the Company?s long-term
sustainability. Mitigation plans with identified owners are set against target dates and
progress of mitigation actions is monitored and reviewed. The Company has in place a
robust risk management framework to identify, assess, monitor and mitigate risks that
threaten the Company. The Risk Management Committee of the Company is tasked with
identifying and mitigating risks. The Committee reports to the Board of Directors who sit
at the apex of the corporate governance framework.
Some of the risks identified and mitigated by the Company during the
year under review are as follows:
| Risk |
Description |
Mitigation |
| Business risk |
Newer launches / strategies may not accelerate as desired and
new regulations can hamper Company?s ability to accelerate profits. |
We have defined new initiatives for all the new launches and
we will continue to experiment and calibrate to reach the desired state of performance. We
will continue to take up our cause at appropriate forums if any new regulations are
detrimental to the business environment. |
| Competition risk |
Competition can significantly affect the Company?s
market position, pricing and margins. |
The Company has relied on a differentiated strategy on all
fronts such as segmentation, pricing, new domains, new launches and has remained a market
leader. We have adopted newer marketing strategies through differentiated campaigns that
has further helped our positioning. |
| Cybersecurity risk |
Network failure and data breaches can impact the operations
of the Company extensively. |
Being an established player in the online matchmaking sector,
it is crucial for the Company to ensure that its systems are safe from cybersecurity
risks. The Company undertakes periodic vulnerability assessments and audits through
internal audit mechanism to detect and proactively mitigate any such risks. |
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