Broker’s call: (BUY)

ICICI Securities

Target: INR 700

CMP: INR 579.10

Matrimony.comRevenue trend improved in the fourth quarter of fiscal year 23 sequentially after two consecutive quarters of decline. Also, billings in matchmaking increased 8.6 percent QoQ and 76.9 percent YoY in Q4 FY23 versus 1.6 percent QoQ and 2.1 percent YoY in Q3 FY23 .

Paid subscriptions are up about 12 percent year-over-year. We believe this indicates improved sentiment and bodes well for revenue growth in FY24. Management’s comments also reflected an improved outlook.

Management channeled more than 10 percent of revenue growth and EBITDA margin improved by 300 basis points year-over-year in fiscal ’24. Given the improved outlook and current weak valuation, we think a revaluation of the stock is likely.

We believe Matrimony is well positioned to capture penetration-led growth in the matchmaking classifieds space in the medium term. Her entry into marriage services is also a step in the right direction, from our point of view. Strong billings in the current quarter point to double-digit growth in fiscal 24/25.

We are promoting Marriage to buy with a revised (increased) target price to Rs 700 (from INR 575). previously.

Key risks: conversion of active profiles into weaker-than-expected paid subscriptions; a slower-than-expected increase in marriage services; And a lower-than-expected rebound in matchmaking works.