Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Advertising revenue grew by 8.4% YoY, reaching INR4,277 million, reflecting strong brand trust.
- Newsprint costs reduced by 17.2% YoY, significantly boosting profitability.
- EBITDA grew 40.4% YoY to INR1,909 million, with margins expanding by 700 basis points to 31%.
- Profit after tax increased by 49.7% YoY to INR1,179 million.
- Digital business saw substantial growth with over 18 million monthly active users as of May 2024.
Negative Points
- Potential increase in newsprint costs due to rising freight costs, which may impact future margins.
- Circulation revenue remained flat despite efforts to boost distribution.
- The radio segment's growth is limited without the opening of news and current affairs by the government.
- Competition in the market remains strong, potentially affecting market share and profitability.
- The digital segment's financial performance is not yet substantial enough to be reported separately.
Q & A Highlights
Q: What was the government revenue percentage this term and its growth for both state and center?
A: The government revenue grew by almost 20% over last year and contributed around 20% overall. This includes both state and center.
Q: Are we seeing similar traction in the auto sector as two years back?
A: Yes, this quarter we have shown a growth of almost 35% in the auto category, and auto now contributes almost 8% to the overall revenue.
Q: Are there any availability challenges with the increase in freight rates for imported newspaper?
A: There are no availability challenges. The newsprint rate last year was INR56,600, which has gone down to INR47,000 this year. However, due to rising freight costs, we may see a slight increase in newsprint prices next quarter.
Q: Are we looking to publish digital business numbers separately soon?
A: We might publish the digital business numbers separately in a few more quarters.
Q: What are the efforts being made to increase circulation given the lower newsprint prices?
A: We have started various schemes for distribution agents and readership schemes to encourage more purchases. The real impact of these efforts will be seen post-September.
Q: What is the outlook for the radio segment?
A: The radio segment has a margin of 34% this quarter. Growth will largely remain the same unless the Government of India opens up news and current affairs for radio, which could significantly increase listener engagement.
Q: How are we planning to protect margins if newsprint costs revert to higher levels?
A: Newsprint currently accounts for 37% of our overall cost. We hope to maintain this level or see only minor fluctuations. Increasing ad revenue will be crucial to sustaining overall profitability.
Q: Are there any plans for investment opportunities or buybacks given the significant cash reserves?
A: The Board will consider all options, including investment opportunities or buybacks, and will communicate any decisions accordingly.
Q: What is the advertiser mix for Q1 compared to last year?
A: The advertiser mix remains largely the same, with education contributing over 20%, real estate around 7-8%, automobile 8%, FMCG 4%, and jewelry 4%. The government category was slightly higher due to elections.
Q: What is the outlook for the digital business?
A: Our digital business is growing, with over 18 million monthly active users as of June. We are experimenting with paywalls and limited advertising to gauge response and improve the reading experience.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
