Release Date: August 05, 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 robust domestic revenue growth of 19.3% year-on-year, reaching INR109.4 crores.
- The company's EBITDA, excluding digital, increased to INR20.5 crores from INR19.2 crores in Q1 FY24, with EBITDA margins at 21.8%.
- The digital segment saw significant growth, with digital revenue reaching INR17.8 crores, constituting almost 25% of radio revenues, up from 11.8% in Q1 FY24.
- The international market remained EBITDA positive, contributing INR1.5 crores for Q1 FY25.
- The company's balance sheet remains strong with a cash balance of INR355 crores as of June 30, 2024.
Negative Points
- The Gaana business, while showing potential, requires significant investment, with INR15 crores spent this quarter, impacting overall profitability.
- The traditional radio business volume growth was modest at 3%, indicating limited expansion in this segment.
- Despite the overall revenue growth, the effective rate for radio is still below pre-COVID levels.
- The multimedia solution business experienced a marginal drop due to the postponement of certain activities, impacting overall segment performance.
- The company faces challenges in transitioning Gaana to a profitable subscription model, requiring further investments and time to achieve breakeven.
Q & A Highlights
Highlights of Entertainment Network (India) Ltd (BOM:532700) Q1 FY25 Earnings Call
Q: What is the Gaana revenue and profitability for Q1 FY25?
A: We don't provide forward-looking statements. However, we are investing in Gaana with the aim to make it profitable as soon as possible. For further details, you can contact Yogesh separately. - Yatish Mehrishi, CEO
Q: Can you tell me about the inventory utilization for this quarter?
A: The inventory utilization for this quarter has been about 72%. - Yatish Mehrishi, CEO
Q: What are the revenues, expenses, and investment levels for Gaana? When will it break even?
A: Gaana operates on a pure subscription model. We recently increased the subscription price from INR299 to INR599. We are investing in the product and expect it to become profitable in a couple of years. - Yatish Mehrishi, CEO
Q: What has been the volume growth for radio this quarter?
A: The volume growth for radio this quarter has been about 3% YoY, driven by political business which led to higher value growth. - Yatish Mehrishi, CEO
Q: How has the effective rate for radio grown YoY and how does it compare to pre-COVID levels?
A: Compared to pre-COVID levels, we are still down. However, YoY, there has been about a 6% increase in price. - Yatish Mehrishi, CEO
Q: Can you provide a breakdown of the solutions part of the business which has de-grown by around 1%?
A: The multimedia solution business has grown well except for the original content business, which has been pushed to this quarter for better margins. Other segments like activations have grown by about 42%. - Yatish Mehrishi, CEO
Q: What was the cash balance as of June 30, 2024?
A: The cash balance as of June 30, 2024, was INR355 crores. - Yatish Mehrishi, CEO
Q: What is the contribution of government and political business to the overall volume growth?
A: The political and government business contributed about 10% to 11% of the overall volume growth this quarter. - Yatish Mehrishi, CEO
Q: What are the future projections for pricing and volumes in the traditional radio business?
A: We expect some price increases starting September as the business picks up in H2. The pricing has remained stable and we don't foresee any drop. - Yatish Mehrishi, CEO
Q: How has the Gaana business performed in terms of revenue run rate and investments?
A: The revenue run rate is expected to show robust growth in subsequent quarters. We have increased the subscription price and are seeing healthy growth in subscriptions. - Yatish Mehrishi, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
