Matrimony.com Ltd is a consumer discretionary small-cap firm with a market capitalization of Rs 1,754 Crore. On Friday's closing session, the share price of Matrimony. com rose over 15% after the Board of Directors announced a share buyback of Rs 75 crore on Thursday, with the buyback set at a price of Rs 1,150 per share. The corporation also proposed a final dividend of Rs 5 per equity share along with its Q4 financial performance. Should investors consider buying the stock because it is debt-free and one of the most lucrative among its peers, check out what ICICI Securities has to say?
Q4FY22 results of Matrimony.com (Matrimony) as per ICICI Securities
- Revenues increased 1.9% QoQ, aided by 1.8% QoQ revenue growth in matchmaking.
- EBITDA margins declined 140 bps QoQ due to continued higher expenses in advertisement and marketing.
- The company announced a buyback at Rs 1150 per share.
Key investment rationale for Matrimony.com (Matrimony) according to the brokerage
- Market leadership in an underpenetrated online matchmaking segment.
- Transition to online from offline, healthy subscriber addition, increased penetration in north, introduction of new products and inorganic opportunity key revenue drivers (11% CAGR over FY22-24E).
- Higher conversion rate (paid vs. total profiles).
What should investors do?
ICICI Securities in its latest report have said that "Matrimony's share price has dipped over the past four years (from ~Rs 893 in September 2017 to ~Rs 772 levels in May 2022). We maintain HOLD rating on the stock. We value Matrimony at Rs 810 i.e. 22x P/E FY24E EPS."
Better-than expected conversions and higher than expected marketing expenses are the key risks for the stock as per the brokerage.
The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decisions.