MRSS India is a listed market research company.
Market Research (MR)
The MR industry has been around for years. The reason that most don’t take this as a serious industry is owing to the output quality. A lot of us would have experienced a paper pen questionnaire/interviews. Frankly such questionnaires/interviews can’t capture the real bias that customers hold. Hence the data output from such studies doesn’t hold great weight. Also there are cases of proxies who merely fill in anything
How Majestic MRSS began
Source: Concall Transcript
So Sandeep & Raj started this asset light company with minimal investment. Simply put - Labour arbitrage for MR. Clever stuff. However they did this for the large MR companies like Nielson, Ipsos and the likes.
Source: Concall Transcript
Problem area identified: As discussed above the biggest challenge that marketing heads would face with MR was validation and authenticity of the data.
Solution: Add technology to the old school MR. The fact that a senior industry veteran also became a part only lends further credibility to the original promoters.
By adding digital technology to the old school MR process, they are not only able to produce output faster but the quality of the output is far more reliable.
What does digital technology added to the old school MR mean?
MRSS has a strategic tie up with several tech partners:
Source: Annual report 15-16
Example of the above technology in action:
Assume you are a shirt company and want to test the impact of your TV advertisement. You will spend money on the ad campaign and more money on getting it on TV. Is there any way to measure the effectiveness of how customers liked your ad?
Old school MR: Take a pen paper and ask questions to the audience.
What doesnt get captured through this method: bias the customers may have or the fact that the customer hasn't yet figured it out or that depending upon his mood he/she may respond favourably or not. Many such things. Im sure you get the idea
Digital tech + old school MR: MRSS will make you wear spectacles while watching the TV ad. They wont ask you whether you liked the ad or not blah blah. Through IRIS tracking they will see how your pupil responded. Did it dilate, was it dry, where did it move, etc etc. - Hence they use technology to give an output.
Source: Concall transcript
Technology partners are paid part licensee, part pay as you go, part % of revenue or a combination of all. Hardly doubt that this is exclusive with any of the technology partners though. I would certainly trust such data better over the old method.
1. Receivable cycle will continue to be stretched until the company becomes a formidable player in the industry where it can start to command.
2. Educating the market may take long. Currently they are creating a market
3. Will large customers really provide a large wallet share of their spends in these activities is yet to be seen
4. MRSS wants to acquire companies. Yet to see how they will pay for these acquisitions
5. Will they seize the first mover advantage?
6. Managing working capital prudently
7. How do they prevent data leakage/fraud?
8. Low experience in capital markets
9. Model still being tested
10. Min lot size 1200 shares
What i like about this business:
1. Promoter team: Like the team composition. The way i see it - good combination of ambition, hustle and experience.
2. Sector agnostic
3. Asset light business model
4. Operating leverage
6. Profitable even at this size
7. Has a sticky nature of services
8. Industry hasnt changed in many years; these guys are trying to do something about it
Tracking position; recently invested