Bharat Matrimony.com is an online match-making services provider that is present across Websites, Mobile Apps and Mobile Websites. It is the leading online match-making services provider with 3.08 Mn free subscribers and 702,000 paid subscribers as of FY17.
The company largely operates under its flagship brand Bharat Matrimony.com which offers limited access to free subscribers and special features and various paid membership plans. The company also operates Community Matrimony.com and Elite Matrimony.com which offer specialized and specific and commands higher realizations. Under Marriage services, the company offers Directory Services, Photography & Videography, Apparal, Decorations, catering, etc and Venue Booking Services which operate under Matrimony Directory, Matrimony Photography, Matrimony Bazaar and Matrimony Mandaps.com respectively.
The company has recorded an FY17 EPS of INR 21.3 based on post-issue number of shares. At a higher price band INR 985, the company is trading at FY17 P/E multiple of 46.2x which is considerably high given that comparable peers such as Just Dial are trading at 30.2x FY17 multiple. However, given its nature of an Internet company, leading position in the online Match-making services industry, presence in a promising industry and higher profitability compared to Just Dial and Info Edge (Net Loss as of FY17), we believe that the company commands a higher multiple . Additionally, we believe that negatives such as settlement of lawsuit with US counterpart have been factored-in and therefore EBITDA and PAT have grown at a CAGR of 38% and 43% between FY13 and FY17, respectively. Taking into consideration the above mentioned factors, we have a SUBSCRIBE rating on the stock.
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