Release Date: May 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Entertainment Network (India) Ltd (BOM:532700, Financial) reported a strong top-line growth of 42.4% year-on-year for Q4 FY24, reaching INR149.3 crores.
- EBITDA for the quarter, excluding digital and Gaana business, increased to INR36 crores from INR23 crores in the previous year, translating to an EBITDA margin of 27%, an improvement of 400 basis points year-on-year.
- The non-FCT segment observed a commendable 48.1% growth in the quarter, marked by the return of marquee properties like SBI Green Marathon and Spell Bee.
- The company achieved a consolidated revenue of almost INR500 crores for FY24, with domestic operations excluding digital and Gaana contributing INR453.7 crores.
- The Board of Directors proposed a dividend of INR1.5 per share, reflecting the company's commitment to shareholder value.
Negative Points
- The digital segment, particularly the Gaana business, is still in the investment phase and is expected to break even in two to three years, indicating ongoing costs.
- Government advertising, which contributed significantly to revenues, is expected to decline post-elections, potentially impacting future growth.
- The company faces challenges in improving radio yield, which has stabilized but not significantly increased, indicating potential pricing pressures.
- The increase in other expenses by INR10 crores in Q4 FY24 was primarily due to Gaana's music content costs, impacting overall profitability.
- The company did not provide specific revenue and margin guidance for FY25 and FY26, creating some uncertainty about future financial performance.
Q & A Highlights
Q: Could you share how much was the revenue for Gaana in Q4 FY24 and in FY24 overall? And where is the revenue being reported and in which segment is the Gaana right now?
A: We acquired Gaana in December, so it's a four-month revenue. Our four-month revenue clocks about INR12.83 crores and is reported as part of the digital segment. - Yatish Mehrishi, CEO
Q: Could you elaborate about the Saudi's plan in more detail? And what's the company's policy going forward for the digital revenue?
A: We are setting up radio stations in Saudi Arabia in partnership with a local partner. Saudi Arabia is a growing economy, and we are excited about opportunities in radio, events, and digital business there. For digital revenue, we aim to transform ENIL into a multimedia company, focusing on profitable growth with Gaana as a subscription service and leveraging our content and influencer marketing. - Yatish Mehrishi, CEO
Q: What would be the future growth drivers for the industry, especially considering potential declines in government advertising?
A: While government spending may decrease post-elections, state government spending and sectors like real estate and BFSI are expected to drive growth. The radio industry is shifting towards more retail clients, which now contribute 65% of our business. We anticipate volume-led growth and remain optimistic about the radio industry's future. - Yatish Mehrishi, CEO
Q: How were the radio yields this quarter, and when do we expect them to recover? Also, can you provide revenue and margin guidance for FY25 and FY26?
A: Yields improved this quarter, driven by political and government ads. We expect yields to stabilize over the next two quarters with potential price hikes during the festival period. We focus on profitable growth and improving margins, but we generally do not provide specific guidance. - Yatish Mehrishi, CEO
Q: How do you see your capacity utilization from radio stations currently?
A: We have enough radio inventory available, averaging 10 minutes of inventory even in peak seasons. This provides ample room for volume growth compared to competitors who may have maxed out their inventory. - Yatish Mehrishi, CEO
Q: What kind of growth are we looking for in FY25 for the traditional radio business in terms of volume and price?
A: While we don't provide specific guidance, we remain optimistic about growth in both FCT and non-FCT businesses. Traditional media, including radio, will continue to grow, and we expect to maintain our market leadership. - Yatish Mehrishi, CEO
Q: How do you see the digital business growth over the next two to three years, including Gaana and other digital components?
A: We aim to make ENIL a full multimedia entertainment company, reducing reliance on radio to about 50%. Gaana is expected to break even in two to three years, and we anticipate significant growth in digital revenues, driven by subscription services and leveraging our content and influencer marketing. - Yatish Mehrishi, CEO
Q: Can you clarify the published numbers, specifically the FY24 PAT at INR50 crores, and the increase in other expenses in Q4?
A: The INR50 crores PAT is after restating numbers due to the acquisition of Gaana, as detailed in note number 6. The increase in other expenses by INR10 crores is primarily due to Gaana's music content costs. - Sanjay Ballabh, CFO
Q: Did the subscriber numbers for Gaana increase in the last quarter?
A: Subscriber numbers have remained stable since the acquisition in December. Our focus has been on improving the product and content, and we have not yet started marketing efforts. - Yatish Mehrishi, CEO
Q: What was the Gaana revenue in FY24 and in Q4 FY24?
A: Gaana's revenue for FY24 was about INR12.5 crores, with INR9.5 crores in Q4 FY24. - Yatish Mehrishi, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
