Why is Matrimony.com falling/rising?

Technical Rebound and Market Performance

The stock opened with a notable gap up of 7.05% and reached an intraday high of ₹543.75, marking a 14.13% increase from the previous close. Matrimony.com’s price now trades above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day marks, signalling a strong short- to medium-term bullish trend. This technical strength contrasts with the broader market, as the Sensex declined by 0.63% over the past week, while Matrimony.com gained 7.10% in the same period.

Despite the positive price action today, the stock’s weighted average price indicates that more volume was traded near the lower end of the day’s range, suggesting some cautious profit-taking or resistance at higher levels. Additionally, delivery volumes have dropped sharply by 60.76% compared to the five-day average, indicating reduced investor participation in recent sessions. Nevertheless, liquidity remains adequate for modest trade sizes, supporting continued market activity.

Promoter Confidence Bolsters Investor Sentiment

One of the key drivers behind the recent price surge is the rising confidence from the company’s promoters. Over the previous quarter, promoters increased their stake by 1%, now holding a majority 54.26% share in Matrimony.com. Such a move is often interpreted by the market as a strong endorsement of the company’s future prospects, encouraging other investors to follow suit.

Moreover, Matrimony.com boasts a high return on equity (ROE) of 17.40%, reflecting efficient management and profitability relative to shareholder equity. The company’s low debt-to-equity ratio, averaging zero, further underscores its conservative capital structure, which can be appealing in volatile market conditions.

However, these positives are tempered by the company’s longer-term financial challenges. Operating profit has declined at an annualised rate of 9.38% over the past five years, and the firm has reported negative results for five consecutive quarters. The latest six-month profit after tax (PAT) stands at ₹16.16 crores, down 40.43%, while profit before tax excluding other income has fallen 55.49% quarter-on-quarter. Operating cash flow for the year is also at a low ₹56.86 crores, signalling cash generation pressures.

Valuation metrics add another layer of caution. With a price-to-book value of 4.6 and an ROE of 13.9, Matrimony.com trades at a premium relative to peers, despite underperforming the benchmark indices consistently over the last three years. The stock’s one-year return of -18.74% contrasts sharply with the Sensex’s 4.15% gain, highlighting persistent challenges in delivering shareholder value.

Balancing Short-Term Gains with Long-Term Concerns

In summary, Matrimony.com’s recent price rise on 08-Dec is primarily driven by a technical rebound after a prolonged decline, coupled with increased promoter stake signalling confidence in the company’s outlook. The stock’s ability to trade above all major moving averages reinforces this positive momentum in the near term.

Nonetheless, investors should weigh these gains against the company’s ongoing operational challenges, including shrinking profits, negative quarterly results, and a valuation premium that may not be justified by current fundamentals. The stock’s consistent underperformance relative to the broader market over multiple years suggests that caution remains warranted for those considering a long-term position.

For traders and investors, the current rally offers an opportunity to capitalise on short-term momentum, but a thorough analysis of the company’s financial health and sector dynamics is essential before committing significant capital.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →