Nirmal Bang has come out with its report on Matrimony.com , The research firm has recommended to “ Subscribe ” the IPO in its research report as on September 11, 2017
Incorporated on July 13, 2001 Matrimony.com Ltd is the leading provider of Online Matchmaking Services in India. As of June 2017, the total registrations stands at 27.65mn and the company had 140 retail centers distributed across India. As of June 2017, the unique visitor’s stands at 991000 and the average pages visited per visitor stands at 463. The company delivers matchmaking services to their users through their websites, mobile sites and mobile apps. The company is also into marriage service business which is still at a very nascent stage.Valuation and Recommendation
Over FY13- FY17, the company sales have grown at a CAGR of 11.6% however, Ebitda has grown at a CAGR of 38.6%. EBITDA in FY17 was higher on account of restructuring steps taken by the company, improving the overall CAGR for the period mentioned above. Ebitda margins in FY17 improved drastically by 1758 bps to 20.2% from 2.6% in FY16. In Q1FY18, Ebitda margins came in at 23.3%, which indicates margins are going to be sustainable going ahead. There was a litigation filed against the company for which the company had to pay a sum of USD $8,000,000 in full settlement which was leading to loss to the company. As per the management, this litigation has been factored in the P&L. Adjusting to this from FY13- FY17 PAT has grown at a CAGR of 40.8%. Being an internet user company the capex requirement by the company is less. Other than this, Ebitda to Cash flow from operations is around 85% indicating lower working capital requirement by the company. Going forward, shift from unorganized to organized sector and already having high database we expect the company to maintain its No1 Position even going ahead. Other than this, with increase in internet penetration & easy availability of sites we expect the number of visitors to increase going ahead and in turn fuel in growth to the company. Apart from this, the company’s new marriage services business (currently loss making) is likely to gain traction with cross selling opportunity available .On the valuation front, at the given upper price band of issue of Rs 985, Matrimony.com is offered at PE of 38x, EV /EBITDA of 27.6x and EV/Sales of 6.4x for Q1FY18E annualized EPS, EBITDA and sales respectively which looks attractive considering its leadership position and as compared to its peer. We recommend subscribing to the issue.
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