Matrimony.com Limited (MATRIMONY) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Matrimony Q2 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jayram Shetty from ICICI Securities. Thank you, and over to you, sir.

Good morning, everyone. On behalf of ICICI Securities, I would like to welcome you all to Q2 FY '27 Earnings Call of Matrimony. From the company, we have Mr. Murugavel Janakiraman, MD and CEO. The call will begin with a brief management remarks followed by a Q&A session. I will now hand over the call to Mr. Janakiraman for his remarks. Over to you, sir.

Thank you, Mr. Jayram. Good morning, everyone, and thank you for joining us for the Quarter 2 FY '27 Earnings Call. We are pleased to report a strong performance during the quarter, with growth across our key financial parameters. Our consolidated revenue grew by 17.6 percentage year-on-year, while EBITDA registered a significant growth of 144.7% to INR 30.3 crores, Our net profit increased by 167.3% to INR 20.7 crores. Our building also record a healthy growth of 10.7 percentage compared to the corresponding quarter of last year. On the business front, our paid volume also witnessed a substantial increase supported by the interaction of [indiscernible] duration subscription packages and strong execution. Technology in the AI continue to be important drivers of our business transformation. AI is increasingly becoming part of how we build our products and deliver services. We implemented several AI-led initiatives across photo on proper valuation, AI-powered chatbot, product enhancement and customer called Quality analysis. These initiatives are aimed at improving customer experience, kitting key insights and driving operational efficiency. During the quarter, we also launched a regional versions of [indiscernible].com. That is our serious matchmaking initiative. The brand names or premium in Kerala, premium in Tamil Nadu premium in Andra Pradesh. These offerings are still at an early stage, and the initial traction has been very encouraging. We plan to extend this initiative to other region languages in the coming quarters. The expert [indiscernible].com on the regional brand to meaningfully contribute in the coming years. As part of our strategy to expand to related adjacent services, our Board of Directors have approved a proposal of appreciation of an additional 50% stake in [indiscernible] Future Tech Private Limited, subject to customary closing conditions and regulatory approvals. We see there's an opportunity to participate more meaningfully in the growth of online astrology services segment, which is booming in India. Under [indiscernible] during the quarter was exceeding the government approval for voluntary other authentication for our matchmaking platform. At this point, we are the only Matrimony company approved by the government of India to get other base verification of numbers. We believe this initiative will further reinforce our commitment to providing a safe and trusted management experience. Overall, we remain focused on centering our core matchmaking businesses, leveraging technology and AI, improving operational efficiency and building a new growth opportunity. Now coming to the results for the quarter. In quarter 2, on a consolidated basis, we're actually building INR 131.1 crores a growth of 10.1% year-on-year and became up 3.6% quarter-on-quarter. Revenue at INR 134.8 crore, a growth of 17.6% year-on-year and 3.3% quarter-on-quarter. Key highlights for the matchmaking business quarter 2 are as follows: building regrowth of 10.9% year-on-year and a decline of 3.7% quarter-on-quarter. Revenue at INR 133.9 crores, a growth of 17.9% year-on-year and 3.3% quarter-on-quarter added 3 point due to last page subscription during the quarter, which is a growth of 26.6% year-on-year, a 1.2 percentage quarter-on-quarter. [indiscernible] for the matching is declared by 12.2% year-on-year and 13.3% quarter-on-quarter basically, effect over 26,000 success stories during the quarter. I'm coming to the managed service and other business building where at a growth of 0-plus leach quarter-on-quarter, a decline of 15.5% on a year. Revenue was INR 89 lakhs, declined 7% quarter-on-quarter and 14.3% year-on-year in the quarter were INR 4.3 crores as compared to EBITDA losses of INR 3.8 crores in quarter 1 of FY '27 and INR 2.3 crore in Q2 FY '26. On the building and revenue outlook for quarter 3. Matchmaking revenue on a year-on-year basis, expect to post a double-digit growth in quarter 3. Matchmaking building or expect which is single-digit year-on-year growth in quarter 3, reflecting the impact of the shattered falling in quarter 3 of this year compared to the quarter 2 of last year. Marriage Service and other business exported to be higher than the quarter 2. Let me pass on to Sushanta to comment on the key [indiscernible]. Sushanta, over to you.

Thanks, Muruga. Good morning, everyone. Our EBITDA margin for the Matchmaking business in Q2 is at 29.7% as compared to 26.9% in Q1 FY '27 and 17.1% a year ago. Marketing expenses for mass making in Q2 are at INR 45.3 crores as compared to INR 46.5 crores in Q1 FY '27 and INR 45.8 crores a year ago. Excluding marketing expenses, our margins in Matchmaking are at 64 percentage compared to 63% in Q1 FY '27 and 57% a year ago. On a consolidated basis, our EBITDA margin in Q2 are at 22.5% compared to 20.1% in Q1 FY '27 and 10.8% a year ago. Tax debt in the quarter is at 24.1%. PAT is at INR 20.7 crores, growth of 8.6% quarter-on-quarter and growth of 16.3% year-on-year. Share of Q2 loss from Astro Vision, our associate company, is at INR 21 lakhs. Cash balance as of September, INR 345 crores, improved slightly compared to Q1 FY '27. Return on capital employed is at 39.8% annualized. On the outlook of Q3 margins, we expect to achieve a triple-digit year-on-year growth in PAT, profit may be similar level of Q1 or slightly less than Q2 of current year. I would like to end with the customary safe harbor statement. Certain statements during this call could be forward-looking segments on our business. This involves a number of risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. We do not undertake to update any such forward-looking statements that may make from time to time by or on behalf of the company, unless it is required by law. Thanks.

Thank you, Sushanta. Yes. we can take questions now.

[Operator Instructions] The first question is from the line of Sukrit D. Patil from iSight [indiscernible] Private Limited.

I have 2 questions. My first question is to Mr. Janakiraman. Your paid users grew by nearly around 26%, 27% this quarter, which is a very great number. But the average amount each customer base dropped around 11%, 11.5%. As you add more budget users from smaller towns, how do you manage the risk of lower prices hurting your core business? And how do you make sure cheaper plans don't pull down your overall revenue per user or force you to spend more on ads? That's the first question. [indiscernible] my second question after this.

Thank you. So basically, we introduced a saturation package, a 1-month package to a certain cohort of customers. So it's not to all the users and not to -- first of all, is not to all the users and not at the same time I mean based on the analysis based on the user that they're spending capacity. So based on various analysts, we offer the 1-month package to set up pace, which we aimed at increasing conversions, not affecting the revenue. So basically, we're able to add the more volume. So without compromising the paying users who otherwise would go for a longer duration package. Yes, that can be here under some overlap, but largely, we're able to achieved it. So there's an increase in volume without affecting the revenue contribution from the key customer base. So -- and the ARPU is down on account of the [indiscernible] package. So basically [indiscernible], there's a benefit of offering to certain [indiscernible] duration package.

But my second question is regards to new investment risk. Your profit margins more than doubled to 22% because I believe the costs were kept under tight control. Even though Marriage Services dropped around in terms of significant 12% to 13%, and you are spending around INR 7.5 crores to INR 8 crores to buy more of a Astrovision. Going forward, how will you protect this 22% margin benchmark, which has been set, if advertising costs jump during the busy wedding season. And also, how do you make sure the new side of business does not waste the company's cash?

Yes. In terms of the margins into the marketing spend, so marketing spend will be at a similar level at this point of time. So we're not seeing any substantial in the matchmaking marketing. That's point number one. In terms of the acquisition, actually this is a good opportunity. The [indiscernible] of the company, the adding around close to INR 20 crores of annualized business and there are synergies because we are already using the services of Astrovision for [indiscernible] generation, [indiscernible] matchmaking. And they generate a good amount of revenue through our astrology Q&A. So there's opportunity for us to integrate those services into millions of our users. And I believe there is a synergy, there's an opportunity. It's a net-net, on one hand we're able to increase the revenue in the astrology side because astrology booming and also the complementary service to our customers. So we see that this thing while done in with some investment, I don't think it's going to come at the cost of our margin because the company, there's opting leverage. Yes, they are invested they're making within the match making the low do mind and other things. But sale able to manage the overall the marketing deal with the current marketing. So we don't see any margin increase in marketing expense. Also we don't see it's going to come at the cost of these margins on the matching. We only expect as you progress margin only going to increase on the -- at the overall level on also the case with the matchmaking business as well. And also, we see that the new initiative be the bidding services other initiative. We see the growth going up from value is auditing from growth, but we see definitely the momentum is picking up. I think now, actually, I believe that pretty much at the bottom a couple of quarters. I think we see the continuous growth happening in the new initiative beyond matching.

The next question is from the line of [indiscernible] from Countercyclic PMS.

So firstly, I would like to understand that you have guided a billings growth of around single digit in Q3? So -- and also the ATV is falling. So I think the contribution from ATV, lower ATV will come in the coming quarters. So I mean I just want to understand over a longer term, say, over a 1-year period, would we be looking at a single digit or double-digit revenue growth because of these 2 contributing factors? Or is it possible that I mean, due to falling ATV, the revenues can also remain stagnant at these levels or maybe degrow. Can you help me understand that?

First of all, revenue growth for this year, be the Q3 or Q4 going to be double digit only. And the profit will cover the title digit group profit. See the ATV and it gave you a millions of users. It's not that millions of free users and only certain personnel use go for a paid membership. You appreciate not all the users are in terms of beta income or be it their level of what quality the intensity to get may not be a similar level. So the idea is to increase the conversion. So at the same time, without affecting the ARPU of those users who can pay at a higher level -- longer duration or [indiscernible]. The idea to overall increase that the conversion postage overall increased the pause without upsetting those us who otherwise can go for longer [indiscernible] is not. I think the more of is all the segmentation and the execution strategy in outwards. So if you have to drive the ARPU, then a payment volume and go down to the payment volume, there's ARPU [indiscernible] you the focus on increasing the over revenue. So basically, net debt converting more users at the right ARPU and order. So that way, it's the right strategy, right thing to do. In fact, increase in the paid volume rather it can't [indiscernible] on renewals order. The more the paid volumes means that people can experience the paid service, it can contribute renewal also. So net-net is a good strategy to get more users to go for a paid transaction. So we'll not have any implications on our future revenue, other things. In fact, it's only had a growth in the future and order. That's a fast thing in terms of -- the single-digit growth, while revenue will be double digit in Q3, and we expect the billing on a single in account last year, both the ad and most of the [indiscernible] on the Q2. This year, both Shad and Navaratri is on Q3. So doing a Navratri and also the Shad period, there's a matchmaking gets impacted [indiscernible]. Because of the reason why you had slightly expected growth in the quarter 2 on the building and there has some impact on the quarter 3. However, the revenue will be on a double-dip. So it's more of this quarter specific on the billing had nothing to do with the TV or paid transaction, completely independent.

Got it. So what are the conversion rates currently? And how do they compare with last year? And what exact initiatives? I mean -- so this is basically driven by us providing discounting to basically convert the convert more customers. [indiscernible].

No. It basically is in the other period that we are only 3 months or longer duration package we did increase 1 month factory to certain cover our customers. So basically, it's not a discounting. It's a more of a shorter duration package to a certain segment of customers.

Got it. And what is the conversion rate currently if you can help us understand versus last year?

Sorry, the increase in conversion overall, we don't disclose the actual conversion rate. Yes, there is increase in conversion [indiscernible].

Got it. And what would be our market share? And have we seen any growth in the market share if we compare to Shaadi.com and Jeevansathi.com?

See, we don't know the entire competition information of the #2 player, public and all but so we are not in operation to comment on that. Our focus is on -- obviously, we are the strong player in Southeast to large extent of this. I [indiscernible] 1 of the markets where we are 1 of the player leaders in all doing. So now that the #1 player, it's not market I think that's where probably we are to continue to figure out how to paint it and otherwise, we'll continue to maintain our share in these markets, Southeast and West actually.

Got it. So my last question would be regarding the acquisition, so we are -- Astrovision. So if you can help us understand what is the EBITDA profitability and expected synergies of this acquisition of Astrovision? Number one. And number two, I would also like to understand once our buy back cooling off period is over, would we still continue to prioritize share buybacks going forward?

In terms of the Astrovision, they've been doing around INR 18 crores to INR 20 crores annual revenue, there may be some minimum losses, INR 1 crore or INR 2 crore or EBITDA breakeven. And what is synergies that we have millions of users and Attribution also generated a good amount of revenue, more than 50% revenue for them come through the store consulting. So we believe there's opportunity. And because there's a company is very -- 1 of the oldest player in this category and that is a prediction based Vedic astrology. In fact, a lot of astrologist, also use the software for [indiscernible] generation prediction [indiscernible]. So -- and they offer the service in various languages. So there's -- and we already use this software for otoscope generation horoscope matching. So believe we're building our expertise on scaling business, and we also integrate into our various offerings and be matchmaking or matrimony or serious match low domains. So that synergy -- and also the astrology is booming in India. So we want to cap it on opportunity, leverage our core strength in Vedic astrology, which is well respected and appreciated and integrate across a lot offering, plus we can also unlead some opportunity aspect. So these are something we are -- once you do the appetite have to [indiscernible] you want to drive that growth and all that, okay?

Got it. And sir, in terms of share buybacks, would we continue...

Yes, sorry. That's my apology. Share buyback, I think we are still 1 year not over after 1 year over board in the at what to do in [indiscernible]. We have done the committed [indiscernible] on these things. [indiscernible] early next year only, I think board will decide [indiscernible].

And I request you to continue share buybacks as it's the most efficient way to return money to long-term shareholders.

The next question is from the line of Ankul Kumar from Alpha Capital.

Sir, my question is also on this use of money, basically the share buyback and all. So we have enough cash. We don't need much cash to grow the business. So I just wanted to ask why don't we give you a big special dividend have around more than INR 200 crores cash. Why don't we plan a big special dividend then reward the stock because our stock is quite cheap versus a lot of peers, a lot of market participants. So can you comment on that, sir?

Thank you, Ankul. No, the Board will decide on rewarding shareholders. So we'll take this point. And yes, so we continue to look at how to lever our shareholders with on a lot of back. And so yes, we definitely look into various ways to [indiscernible]appreciate your input on it.

Got it, sir. And sir, in terms of Q3, you're saying Shaad as well as this Diwali, et cetera, are there in this Q3. So -- and still, we are expecting similar kind of numbers as in Q2. So what is giving us confidence that we can achieve similar numbers in terms of both net profit and revenue?

Yes, on the revenue will be a double-digit growth because of -- 1 is that the strong Q2 year-on-year. So normally, they are quarter of some bit benefit whatever happened in Q2 will flow into Q3. And so the revenue will be better than the revenue double-digit growth. Yes, the single-digit growth. Yes, there is some building impact. but we'll catch up that's for the Q4 will catch up, Q4 normally a good quarter will catch up as far as Q4. So revenue-wise, we expect double-digit revenue growth, plus that's going to be expense to be at a similar level. So we expect the profit to be as Sushanta said, a little between Q1 and Q2 number and all do. So yes, so we don't see much impact on the profit side. Yes.

The next question is from the line of [indiscernible] from Trinetra Asset Manager.

So just some context. Actually, I'm new to the company. While we are very much aware of the competitive landscape in the online management space and the fact that matrimony has been around the longest time just wanted to understand for the last 3, 4 years, while our margins have been sequentially improving our sort of revenue growth has stagnated. And while we are a cash positive company, as I think a lot of other participants have pointed out that why don't we give a special dividend. My question is that, is there any way where we can sort of accelerate our growth and go beyond the normal banking booking that we are growing?

So the matchmaking, the growth either can be a high single digit or double digit depends on how well we execute because -- so plus we also do not accept a growth at the overall company level. We are taking initiative it the newer initiative, the recent acquisition of Astro-Vision. So matchmaking per se, yes, it can have it depends on the year. It can vary from high single-digit growth, double-digit growth. So we've seen that this year, we are a single-digit growth or double-digit growth. So it's a bit clear that level of growth, the matchmaking can now. But again, it's plus overall at the company level, the growth can be better. If you're able to execute well on the newer initiatives, and that's something you've been working on. We definitely see that the newer initiatives are getting the traction [indiscernible], astrology and that also innovate is synergy in both. So -- but I think that got a do matchmaking, it can when it grows now we are at a level that increase in growth also will contribute to the increase in operating margin. But whether growth at 5%, with grow to 10% whether growth, 15% matchmaking. But I think the business has a strong update leverage. So unlike other companies, there are a lot of operating costs. It's not the case of the matchmaking business. And also, we don't have a light-on customer. We also every year that the churn is also happening. I think it should be sort of even working with even like other FMCG companies because consumer focus, but they're growing 5%, 10%, 15%, whether year-on-year where the operating margins are increasing and ROC is intent that's something plus overall to drive the growth -- a lot of growth can come from the new initiate will be winning. So definitely a bigger opportunity in the bidding service. So net-net, what we are looking at, we are looking at a combination of matchmaking and the betting service as the newer initiatives and growing at -- helping compete grow in the double digit. Plus, more important that increase in operating margin and EBITDA margin and profit margin growing. I think that's where we'll be looking at the way for [indiscernible].

Sure. And I also just wanted to understand the sort of thought process of the management while INR 300 crores of cash balance sounds good. But are we against burning cash at all for new initiatives? Do we want to sort of allocate some kind of risk capital and then see what happens? Or is -- do we want to conserve it for some inorganic proposition? What is the thought process here?

It's nothing to -- we don't -- there's no reason to invest too much of money because these are adjacent services. So -- and we have millions of users already accrued for matchmaking. The trust our services. be the wedding services or the [indiscernible] we talked about. Yes, [indiscernible] going forward once you understand probably may call us some investment to be early to comment on that one. However, when you already acted a customer, the no need to, it's more of offering more to the same customers. So that means, actually, literally the 1 invest money began marketing for these initiatives. I think that's basically de is how to get more revenue from the existing customer beyond matchmaking making them to avail the wedding services. Again, the reason that wedding services are certain thing because the model has been changed while you've been running for quite some time the new model what you are working on a more of a commission-based model at very, very early stages, but we are already seeing the traction. That's the reason that we are confident that we see that now for the quarter-on-quarter, there be increase in the growth of revenue from other services. So it's not we are -- because the investment, it's more toward the listening is not on the wedding services because the customer is already accurate. It's more of providing more to these customers. integrating effectively into core matchmaking, making people aware of the bidding services and make them to understand the benefits of value proposition to over these bidding sets. So -- but however, if we see the tomorrow investment required, we are not ours to the investment [indiscernible].

The next question is from the line of Abhishek from ICICI Securities.

First of all, congratulations on great set of numbers. If you kind of try to look at what has happened over the last 3 years, rate, both in terms of the revenue growth and the margin performance, it does seem like there is a disproportionate impact of what the competition has been doing, right? So when competitive intensity has gone up significantly we have struggled both in terms of revenue growth and in terms of margin maintenance. And now that headwind is gone, we seem to be doing very good in terms of growth as well as margins. Now from an investor's point of view, right, so is there something that has kind of changed or if, say, tomorrow again, competitive intensity picks up, right, for whatever reason, we will again be as to what was happening in FY, say, '25 for that matter or '26. If you could give some color on this, sir, that would be really helpful.

Yes. Thank you. It's a good question. I think is that today, we have a sufficient cushion for marketing. Almost the marketing spend is like almost INR 45 crores of marketing spend on a quarterly basis. We still believe that still the marketing spend is more than what otherwise also the some other markets, while that company incentive has come down in North and some other markets. Some of the market is still done. Yes, market is kind slightly good on also. That's the part #1. In terms of I think a tomorrow the thing I think that's sufficiently cushioned and also the most of the revenue for us comes from the key markets where we are a strong player, and we are already spending money on TV. We are suspending on digital. So that now that today the profit margin coming on account of reduced the marketing spend in these markets. We are in Italy, we are operating at a good threshold on South West and the Eastern market. So we don't see anything that's going to change in this market. Not where the marketing spend is sort of inventory level. And we don't see that kind of going to go up. And when even something happens also, I don't think it's going to any material affect our either growth or our margins at thing. In fact, achieve progress, we need to figure it out to penetrate the other market. So net, I'm not seeing anything going to kind of go up in other things. And even otherwise, the pooling happens in 1 particular market, it a north and all those things, I don't think that's going to have any impact on our growth, our profit and our thing. I'm not sure whether it's going to be at all get into that increased market in back on the North end market or you may decide do it also, but we don't see anything impacting us a growth and profit. Because 1 thing is the other sufficient question on marketing budget and that's our part number one. And the second thing is our growth outlook because what you see, that will contribute to increased profit margin. Even if you have to even some money into the marketing that's not going to affect our profitability growth or operating margin order. I believe we are at a certain threshold. I think in 4, you see the only the increase in margins is happening and bit of profit happening. But our value growth, but there's a INR 20 crores that they are also on to get into [indiscernible], I think that's something that we need to work it out of net debt, I'm not seeing that recapping our level or growth in [indiscernible]. More about the profit margin not get impacted. But when do you expect to grow further.

Understood. Sir, if we kind of look at the volume growth this quarter was actually very strong, right, almost 25% plus. Now trying to just understand, right? So is there a pickup that inherent volumes and if, say, this kind of volume growth is to sustain, what is a reasonable kind of number to build in for revenue growth? So if you could give some color on this, that would be helpful.

No, we can sort of -- we can have today 300,000 of paid volume. So for the per quarter. I think that is sort of sustainable because of the introduction of the started to is impacted to a second cohort of customers. We've also done some segmentation strategies. So that's helping us. In fact, we expect this shorter duration package will continue to contribute to the volume growth. So yes, so we see that this level of volume growth is -- it's sustainable, yes.

Got it. Sir, in terms of the underlying metrics, which kind of at how well the app is gaining traction, things like, say, Net Promoter Score or maybe the engagement on the app in terms of the timing of engagement. Can you share some color on that? And probably it might be a good idea to kind of start sharing that on the presentation as well.

Okay. It's a good point to look at it. Then we have a been a lot on the AI. In fact, we have a AI chatbot. So we are also continue to leverage AA and various areas. The AI chatbot something we have done. We are also making a lot of improvements on our product side. So we only see that our product continue getting better and better. and we just announced that we also got the government of India approval to have the other verification on our portal and we only matrimony company approved by the government of India, both state government and the rental government so that's something also we plan to launch this quarter. So we are taking various initiatives strengthen our product offering and services and taking steps to drive that to pay volume. So yes. So -- but the other point is we definitely look into whether we can share this [indiscernible].

Got it. And sir, just 1 last on the new businesses. First is the wedding services business actually contracted quite a bit for 2, 3 years. And now you are saying that you see it kind of building out from here. So if you could give some color on what has changed here? And if you could make some comments on the new vernacular dating app that you were talking about. Here's 1 question that always kind of comes up is, why is vernacular app basically relevant because the dating community generally would more into converting in English. So if you could give some comments on that. Those are all my questions. I'll [indiscernible].

Yes. In terms of why that [indiscernible] me talk this question, weakling it's not tenure is a name actually because the name as the connect to low it's about the pre- the name what you launched sequent low in Kerala. Praulo also low in Telegu, prem sort of to some extent, a little low -- so basically, when the regional -- having the regional brand where now.com is the pan-India level, I will regional brand sort of in was connect with the consumer better than a dose. So I think the India is the country, the diverse population and the long strong language affinity. So I believe that it's a better strategy. In terms of growth, yes, we are having sort of very, very early stages. And but we see that our growth as in month-on-month has been pretty impressive. So still very state. But over, I do believe that in the coming years, low and regional low.com, I will add to the overall growth in the matchmaking at a meaningful, meaningful percentage. That's why it out. But we believe that having very new brands in a way helps us to kind of the consumers better.

The next question is from the line of Ajay Sharma from Sona Mita Capital.

I want to ask actually the marriage services, we have been doing this for a very long time and still taking INR 15 crore EBITDA loss every year. I mean, what's the game plan here, we see?

Sorry, I forgot you earlier, there's a question on a sore I missed that. Basically, look, The earlier the model was on the subscription model, the vendors are paying for the subscription money. In fact, we are almost close to INR 1 crore run rate per month. And we decided sort of we realize that's not the model we want to work on and we did it more clearly down substantially to odometer very low number or literally nonexistent to a large extent, because the model we are working on is more of a commission-based model. I escalate bidding service people who are looking for wedding venue or photography [indiscernible]. We especially did wedding services. I mean, help our customer to choose the right service provider at the best price. We also get some service from the members who are owing the service also get a commission from the service provider. We believe I think that's a model we want to work on because some of this subscription model on Ventas paying money. We didn't feel that scaling up beyond certain number and all. So in fact, as I said, we have scale of almost INR 10 crores plus business run date into a after. Now this is a model you are focusing on the last couple of quarters. We believe this model will help us to scale big in that within services. So literally, while what ever done in the past so many years, it's no more of relevant. But what have we built in terms of the base, the ecosystem, the vendor connection, all that, which are definitely important for binding the brand, what we are doing on getting bit seeding planning service. At this point of time, it's pretty much only Tamil Nadu. We want to reach a certain scale and success metrics before we take it other markets. So wedding services largely limited to 1 in 1 market. to do all year and that's on subscription. That's pretty much very small in segment revenue. And we also madam. So all the things are in a enabler for the wide. So that's a shift that we are talking about.

If it's commission based, how can you use money? I'm just wondering why are you losing so much money?

It's about the people. It's about the process. There a lot of things are required in terms of the leadership team because we also Mantap.com we are at with all the wins and contract to be a bidding service provider. So there are multiple things that are -- so second, it's not only the also that it's asset service related to uniting later service. That is the when does this [indiscernible] they all put together, there's a taken product that's where the cost not every more begin the future. So at once you reach a set number, then it will -- large will come down [indiscernible].

But at what stage do you think you should close down this particular operator [indiscernible]? using money for a for long time I think.

No, availability is we were sort of very, very gung about our beta this opportunity. So we don't see that this opportunity where we're not definitely, looking at the cost. We only want to make it successful. So I just trying to be we're quite confident about this opportunity. So we'll see that in month-on-month, quarter-on-quarter, we see the growth appetite. So I can pretty much just on that is starting from the cash on the [indiscernible]. So we don't see that [indiscernible].

We're not seeing any ramp up at all in this business basically, I'm wondering is even the revenue is not growing, right? So I mean, what's the point?

No. It's -- that's I appreciate while I understand where you're coming from. But again, as I well,it's more like pretty much what I were done in the past. It's not the model. But what I've done in the past is the more of those things are enabling us the relationship with the brand, the lead and everything. So we definitely see that the growth happening from quarter-on-quarter on buildings. So definitely, we're very, very upbeat about it. So probably you'll see that in the coming quarter, the growth is happening [indiscernible].

The next question is from the line of Gautam from Gautam Matrimony Services.

So I just want to understand where all the company is using AI and what are the cost reduction strategies implemented?

A lot of automations are taking place just as a proper validation, photo validation. We're also looking at par of what is done by human we are looking at whether it can be done by AI. Yes, yes. So AI is now in the product side and the customers are starting that a chat bot has been launched. So we are looking at across organization or to the to drive efficiency or improve activity. So we are able to reduce people that you look at it, people cost pretty much year-one the same level. So yes, a lot of has been sort of cuts across various parts organization. And also looking at AI to improve the way we do things as well.

The next question is from the line of Vasu Dewan, an individual investor.

Just congrats to the entire team for the phenomenal [indiscernible], which you are going [indiscernible]. Just after on. And I've got some 3 questions, sir. just explain to me that one. Your effective tax rate is 24% and not the gross rate. What are the deductions [indiscernible] the major one.

Sushanta, yes, please go ahead.