The company's shares traded at ₹521.85 as of February 12, 2026, reflecting marginal gains of 0.12% in the latest trading session. However, the stock remains under pressure from its 52-week high of ₹598.95, trading 12.87% below that peak. The quarter's results reveal a company struggling to reignite growth momentum whilst battling operational headwinds that have compressed profitability metrics across the board.
| Metric | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 | Jun'24 |
|---|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 113.24 | 114.59 | 115.33 | 108.32 | 111.43 | 115.50 | 120.59 |
| QoQ Growth | -1.18% | -0.64% | +6.47% | -2.79% | -3.52% | -4.22% | — |
| Net Profit (₹ Cr) | 8.30 | 7.76 | 8.40 | 8.18 | 9.97 | 13.16 | 13.97 |
| QoQ Growth | +6.96% | -7.62% | +2.69% | -17.95% | -24.24% | -5.80% | — |
| Operating Margin (Excl OI) | 10.97% | 10.56% | 10.94% | 6.53% | 12.29% | 15.01% | 16.72% |
| PAT Margin | 7.33% | 6.77% | 7.28% | 7.55% | 8.95% | 11.39% | 11.58% |
Financial Performance: Modest Sequential Recovery Masks Deeper Concerns
Matrimony.com's Q3 FY26 performance presents a tale of two narratives. On a sequential basis, the company demonstrated resilience with net profit climbing 6.96% from ₹7.76 crores in Q2 FY26 to ₹8.30 crores. However, this modest uptick cannot obscure the more troubling year-on-year comparison, where profits tumbled 16.75% from ₹9.97 crores in Q3 FY25. Revenue remained largely stagnant at ₹113.24 crores, edging down 1.18% quarter-on-quarter whilst managing a tepid 1.62% year-on-year growth.
The margin picture reveals persistent operational challenges. Operating profit margin (excluding other income) stood at 10.97% in Q3 FY26, showing marginal sequential improvement of 41 basis points but remaining 132 basis points below the prior-year quarter's 12.29%. More concerning is the stark deterioration from the 16.72% margin achieved in Jun'24, highlighting a sustained downward trajectory over the past year. PAT margin at 7.33% similarly reflects compression, down from 8.95% a year ago despite sequential gains.
Employee costs at ₹37.43 crores represented 33.05% of revenue in Q3 FY26, down from ₹39.11 crores in the prior quarter. This reduction provided some breathing room for margins, though the company continues to operate with significantly higher cost structures compared to historical norms. Operating profit before depreciation, interest, tax, and other income stood at just ₹12.42 crores, marginally ahead of Q2's ₹12.10 crores but substantially below the ₹13.70 crores generated in Q3 FY25.
Operational Challenges: Exceptional ROCE Masks Deteriorating Fundamentals
Whilst Matrimony.com boasts an exceptional average return on capital employed (ROCE) of 135.92% over the long term, the current operational reality tells a different story. The company's latest half-yearly ROCE of 15.79% marks the lowest level in recent periods, signalling deteriorating capital efficiency. Return on equity (ROE) at 17.40% remains respectable and above industry averages, demonstrating reasonable capital efficiency relative to shareholder funds. However, this metric too has shown signs of pressure, with the latest ROE at 13.89%.
The balance sheet remains fundamentally sound with zero long-term debt and a net cash position reflected in the negative net debt-to-equity ratio of -0.53. Shareholder funds stood at ₹241.59 crores as of March 2025, down from ₹291.50 crores a year earlier, primarily due to dividend distributions and share buybacks. Current assets of ₹298.41 crores provide adequate liquidity coverage against current liabilities of ₹182.77 crores, yielding a comfortable current ratio of approximately 1.63.
A critical concern emerges from the company's dependence on other income. In Q3 FY26, other income of ₹6.12 crores constituted 57.41% of profit before tax, raising questions about the sustainability and quality of earnings. This heavy reliance on non-operating income suggests the core matchmaking business is generating limited profitability on its own. Cash and cash equivalents at ₹40.25 crores on a half-yearly basis represent the lowest level in recent periods, indicating potential working capital pressures.
Key Concern: Non-Operating Income Dependency
Other income at ₹6.12 crores represents 57.41% of Q3 FY26 profit before tax, highlighting the core business's struggle to generate robust operating profits. This structural weakness limits the company's ability to scale profitability even as revenues remain stable. Investors should monitor whether management can reduce this dependency through improved operational efficiency and pricing power in the core matchmaking platform.
The E-Commerce Struggle: Sector Headwinds and Competitive Pressures
Matrimony.com operates in India's highly competitive e-retail and e-commerce sector, where customer acquisition costs remain elevated and monetisation challenges persist. The company's modest 4.31% five-year sales growth rate underscores the difficulty in expanding the addressable market for premium matchmaking services. More troubling is the negative 9.38% five-year EBIT growth, indicating that profitability has contracted even as the business maintained revenue stability.
The broader e-commerce sector has faced significant headwinds over the past year, with the E-Retail/E-Commerce segment declining 22.75% on average. Against this backdrop, Matrimony.com's relative outperformance with just a 0.75% decline over the past year demonstrates defensive characteristics, though it offers little comfort for growth-oriented investors. The company's business model, focused on subscription-based matchmaking services, provides some revenue visibility but limits upside potential compared to transaction-based e-commerce models.
Competition from both established players and emerging social media-based matchmaking alternatives continues to intensify. The company's ability to maintain pricing power whilst defending market share will prove critical to reversing the margin compression trend. With operating margins hovering around 11% compared to historical peaks above 19%, there's substantial ground to recover before Matrimony.com can demonstrate sustainable operational leverage.
| Company | P/E (TTM) | P/BV | ROE % | Div Yield | Debt/Equity |
|---|---|---|---|---|---|
| Matrimony.com | 32.80x | 4.55x | 17.40% | 1.92% | -0.53 |
| Brainbees Solutions | NA (Loss Making) | 2.93x | 0.0% | — | 0.13 |
| Indiamart Intermesh | 21.87x | 6.19x | 19.90% | 2.27% | -1.28 |
| Cartrade Tech | 49.75x | 4.38x | 4.97% | — | -0.30 |
| Just Dial | 15.72x | 1.42x | 10.72% | — | -1.13 |
| RattanIndia Enterprises | NA (Loss Making) | 4.99x | 30.53% | — | -0.21 |
Amongst its e-commerce peers, Matrimony.com commands a premium valuation at 32.80x trailing earnings, significantly above Just Dial's 15.72x and Indiamart's 21.87x but below Cartrade Tech's stretched 49.75x multiple. The company's ROE of 17.40% positions it competitively, trailing only Indiamart's 19.90% amongst profitable peers. The debt-free balance sheet provides a safety cushion, though this advantage is shared by most peers in the sector. At 4.55x price-to-book, Matrimony.com trades at a premium to the peer average, suggesting the market continues to value its established brand and market position despite operational challenges.
Valuation Analysis: Premium Multiples Demand Growth Acceleration
Trading at ₹521.85 with a market capitalisation of ₹1,119 crores, Matrimony.com's valuation metrics reflect a market willing to pay for quality and brand strength but increasingly questioning growth prospects. The current P/E ratio of 32.80x represents a 31% premium to the broader e-commerce sector average of 25x, justified primarily by the company's superior ROE and debt-free balance sheet. However, this premium appears increasingly difficult to defend given the negative earnings trajectory and margin compression.
The price-to-book ratio of 4.55x suggests the market values the company's intangible assets—primarily brand equity and customer database—at a substantial premium to tangible book value. With book value per share at ₹112.05, the stock trades at more than four times this baseline, implying expectations for sustained profitability and returns on equity. The EV-to-EBITDA multiple of 21.88x and EV-to-sales ratio of 2.21x indicate moderate valuation levels for a profitable, asset-light digital business, though these multiples have expanded as earnings growth has stalled.
The company's dividend yield of 1.92% provides some income support, with the latest dividend of ₹5 per share representing a payout ratio of 47.61%. This balanced approach to capital allocation—returning cash to shareholders whilst maintaining financial flexibility—appeals to income-focused investors. However, the stock's 12.87% distance from its 52-week high of ₹598.95 suggests momentum has turned negative, with technical resistance likely around the ₹545-560 zone.
Shareholding: Promoter Accumulation Signals Confidence
The shareholding pattern reveals interesting dynamics that merit investor attention. Promoter holding increased to 54.61% in Q3 FY26 from 54.26% in the previous quarter, marking the second consecutive quarter of promoter stake expansion. This follows a more substantial 1.00% increase in Q2 FY26, bringing total promoter accumulation to 1.35% over the past two quarters. Such accumulation typically signals management confidence in the business's long-term prospects, particularly noteworthy given the company's operational challenges.
Foreign institutional investor (FII) holdings remained relatively stable at 22.09%, down marginally by 0.14% during Q3 FY26. This stability suggests FIIs are maintaining their positions rather than aggressively exiting despite the margin pressures. Mutual fund holdings at 3.02% showed no change during the quarter, following a 1.01% reduction in Q2 FY26. The decline from 4.03% to current levels indicates some domestic institutional caution, though the remaining exposure suggests funds haven't completely lost faith in the story.
| Category | Dec'25 | Sep'25 | Jun'25 | QoQ Change |
|---|---|---|---|---|
| Promoter | 54.61% | 54.26% | 53.26% | +0.35% |
| FII | 22.09% | 22.23% | 22.33% | -0.14% |
| Mutual Funds | 3.02% | 3.02% | 4.03% | 0.00% |
| Other DII | 4.33% | 4.48% | 4.68% | -0.15% |
| Non-Institutional | 15.96% | 16.01% | 15.69% | -0.05% |
Total institutional holdings at 29.44% provide a reasonable base of sophisticated investors, though this level is moderate rather than exceptional for a listed company. The presence of 36 FII investors suggests reasonable international interest in the story, whilst just one mutual fund holding indicates limited domestic institutional enthusiasm. Notably, insurance companies have zero exposure to the stock, reflecting either the company's micro-cap status or concerns about growth visibility.
Stock Performance: Underperformance Reflects Fundamental Concerns
Matrimony.com's stock performance over various timeframes reveals a consistent pattern of underperformance against both the broader market and sector benchmarks. Over the past year, the stock declined 0.75%, significantly lagging the Sensex's 9.85% gain and generating negative alpha of 10.60%. This underperformance accelerates over longer periods, with the stock down 3.15% over two years against the Sensex's 17.73% advance, and down 5.68% over three years versus the benchmark's 37.89% surge.
The longer-term picture proves even more challenging. Over four years, Matrimony.com has declined 34.45% whilst the Sensex rallied 43.89%, representing a staggering 78.34% underperformance. The five-year return of negative 42.44% against the Sensex's 62.34% gain underscores the structural challenges facing the business model. However, it's worth noting that the stock has outperformed its immediate sector, which declined 22.75% over the past year, demonstrating relative defensive characteristics within a struggling industry.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -0.93% | 0.43% | -1.36% |
| 1 Month | -4.08% | -0.24% | -3.84% |
| 3 Months | 0.95% | -0.94% | +1.89% |
| 6 Months | 2.61% | 4.29% | -1.68% |
| YTD | -1.97% | -1.81% | -0.16% |
| 1 Year | -0.75% | 9.85% | -10.60% |
| 2 Years | -3.15% | 17.73% | -20.88% |
| 3 Years | -5.68% | 37.89% | -43.57% |
| 5 Years | -42.44% | 62.34% | -104.78% |
From a technical perspective, the stock exhibits a "mildly bullish" trend as of late January 2026, though it trades below all key moving averages—the 5-day (₹530.04), 20-day (₹544.25), 50-day (₹534.32), 100-day (₹522.55), and 200-day (₹519.45) averages. This positioning below moving averages typically signals technical weakness, with the 20-day moving average around ₹544 representing immediate overhead resistance. The stock's high beta of 1.50 indicates significantly greater volatility than the broader market, amplifying both gains and losses.
Investment Thesis: Quality Company Facing Growth Headwinds
Matrimony.com presents a nuanced investment case characterised by solid quality fundamentals offset by concerning growth trends and valuation challenges. The company maintains a "Good" quality grade based on its debt-free balance sheet, healthy institutional participation of 29.44%, and respectable average ROE of 17.40%. The exceptional long-term ROCE of 135.92% demonstrates historical capital efficiency, though recent deterioration to 15.79% on a half-yearly basis raises questions about sustainability.
The financial trend classification of "Negative" reflects the key challenge facing investors. Profit after tax for the latest six months of ₹16.06 crores declined 30.57% compared to the prior period, whilst cash and cash equivalents reached their lowest level at ₹40.25 crores. The heavy dependence on non-operating income—constituting 57.41% of profit before tax in Q3 FY26—undermines earnings quality and raises sustainability concerns. These factors have contributed to the stock's proprietary Mojo Score of 54 out of 100, placing it firmly in "HOLD" territory.
Key Strengths & Risk Factors
KEY STRENGTHS
- Zero Debt Position: Complete absence of long-term debt provides financial flexibility and eliminates solvency concerns
- High Management Efficiency: Average ROE of 17.40% demonstrates superior capital allocation relative to peers
- Exceptional Historical ROCE: Long-term ROCE of 135.92% reflects outstanding capital efficiency over time
- Institutional Confidence: 29.44% institutional holdings with 36 FII investors signals sophisticated investor interest
- Promoter Accumulation: 1.35% stake increase over two quarters demonstrates management confidence
- Consistent Dividend Payer: 1.92% yield with 47.61% payout ratio provides income support
- Sector Outperformance: 22% outperformance versus e-commerce sector over past year shows relative defensive strength
KEY CONCERNS
- Negative Financial Trend: Half-yearly PAT declined 30.57% to ₹16.06 crores, signalling deteriorating profitability
- Margin Compression: Operating margin fell from 16.72% (Jun'24) to 10.97% (Dec'25), a 575 basis point contraction
- Revenue Stagnation: Sales growth of just 1.62% YoY indicates limited pricing power and market expansion challenges
- Poor Long-Term Growth: Five-year EBIT growth of negative 9.38% reveals structural profitability challenges
- Excessive Non-Operating Income: Other income at 57.41% of PBT undermines core business profitability
- Consistent Market Underperformance: Negative alpha of 104.78% over five years reflects sustained value destruction
- Technical Weakness: Trading below all key moving averages with high beta of 1.50 amplifies downside risk
Outlook: What to Watch
POSITIVE CATALYSTS
- Margin Recovery: Sequential improvement in operating margins from 10.56% to 10.97% if sustained could signal turnaround
- Cost Optimisation: Employee cost reduction from ₹39.11 crores to ₹37.43 crores demonstrates management focus on efficiency
- Promoter Buying: Continued stake accumulation would reinforce management confidence in business prospects
- Technical Reversal: Breakthrough above ₹544 (20-day MA) could trigger momentum-driven buying
- Sector Recovery: Broader e-commerce revival could lift all boats including Matrimony.com
RED FLAGS
- Further Margin Erosion: Operating margins below 10% would indicate loss of pricing power and competitive position
- Revenue Decline: Negative QoQ growth becoming a trend would signal market share loss
- Institutional Exit: Significant reduction in FII or mutual fund holdings would indicate waning confidence
- Rising Other Income Dependency: Non-operating income exceeding 60% of PBT would further compromise earnings quality
- Technical Breakdown: Breach below ₹500 could trigger accelerated selling and test 52-week low of ₹402
What Lies Ahead
The path forward for Matrimony.com hinges on management's ability to stabilise and expand operating margins whilst reigniting revenue growth. The modest sequential improvements in Q3 FY26 provide a glimmer of hope, but the year-on-year comparisons remain decidedly negative. Investors should monitor whether the company can reduce its dependence on other income, improve core business profitability, and demonstrate sustainable margin expansion.
The competitive dynamics in India's online matchmaking space continue to evolve, with social media platforms and new-age applications posing increasing threats to traditional players. Matrimony.com's established brand and customer database provide defensive moats, but these advantages must translate into pricing power and market share gains to justify the current valuation premium. The debt-free balance sheet offers strategic flexibility, potentially enabling inorganic growth through acquisitions or aggressive marketing investments to defend market position.
From a technical standpoint, the stock needs to reclaim the ₹544 level (20-day moving average) to signal any meaningful reversal of the current downtrend. Until then, the path of least resistance appears sideways to lower, with support around the ₹500 psychological level. The high beta of 1.50 means volatility will remain elevated, creating both risks and opportunities for nimble traders whilst testing the patience of long-term investors.
The Verdict: Quality Business Awaiting Growth Catalyst
Score: 54/100
For Fresh Investors: Wait for clearer signs of margin stabilisation and revenue acceleration before initiating positions. The current risk-reward does not favour fresh deployment given negative financial trends and technical weakness. Consider accumulation only on significant corrections below ₹480 or upon demonstration of sustained margin improvement over multiple quarters.
For Existing Holders: Maintain positions given the debt-free balance sheet, promoter confidence, and reasonable quality fundamentals. However, reduce exposure on any rally towards ₹560-580 to rebalance portfolio risk. Set a mental stop-loss around ₹470 (below which fundamental deterioration would be confirmed). Monitor quarterly results closely for signs of margin recovery and revenue growth acceleration.
Fair Value Estimate: ₹480-520 range (current levels to 8% downside), implying limited upside until growth visibility improves. A re-rating towards ₹600+ requires sustained margin expansion above 13% and revenue growth acceleration above 8-10% annually.
Rationale: Matrimony.com's HOLD rating reflects the tension between solid quality fundamentals (debt-free, good ROE, institutional backing) and concerning growth trends (negative financial momentum, margin compression, revenue stagnation). Whilst the 32.80x P/E appears reasonable for a quality business, it demands growth that currently remains elusive. The promoter accumulation provides confidence, but operational execution must improve to justify higher valuations. Until management demonstrates sustained margin recovery and revenue acceleration, the stock merits a cautious stance with selective accumulation opportunities on weakness.
Note- ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The author and publisher are not responsible for any investment decisions made based on the information provided in this article.
