Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Digital media revenues increased by approximately 20% year-on-year, reaching around INR69 crores.
- ShemarooMe continues to gain traction, particularly with Gujarati content, releasing 10 new titles this quarter.
- FilmiGaane achieved a milestone of becoming the 23rd most subscribed channel globally with approximately 69 million subscribers.
- Shemaroo GEC channel secured a viewership share of approximately 7.8% in the overall GEC genre.
- The company launched AI-powered games on ShemarooVerse in partnership with GMetri, showcasing innovation and leveraging cutting-edge technology.
Negative Points
- Revenue from operations remained flat year-on-year at around INR154 crores.
- EBITDA loss for the quarter was around INR13 crores, and net loss was approximately INR17 crores.
- Traditional media revenues declined by around 11%, standing at approximately INR86 crores.
- The company's margins were under pressure due to deferred B2B deal closures and accelerated inventory charge-offs.
- Inventory write-offs and deferred deal closures significantly impacted profitability, with an additional charge-off of around INR30 crores to INR32 crores.
Q & A Highlights
Q: How much of the overall margin fall is attributed to the accelerated write-offs of inventory versus deal delays?
A: The additional accelerated charge-offs during this quarter were around INR30 crores to INR32 crores. The delay in deal closures also had an impact, but it is difficult to quantify precisely.
Q: What is the plan for spending on new initiatives like OTT in FY25?
A: The budget for new initiatives, including broadcasting, is around INR60 crores to INR65 crores for FY25.
Q: How are the debt levels and interest payments being managed, considering the cash position?
A: The company has targeted reducing debt by about INR100 crores over the next two years, from INR338 crores in March 2024 to INR324 crores in June 2024. This will be funded primarily from internal accruals.
Q: What is the current status of the new channel launch and the performance of existing channels?
A: The new channel launch is still under evaluation. Existing channels have shown good traction, with the GEC channel achieving a 7.8% viewership share. The newly launched kids and youth channel, Chumbak, is also stabilizing.
Q: Can you provide insights into the quantum and frequency of B2B transactions?
A: B2B transactions are lumpy and can vary significantly. The company is in advanced stages of discussions for some deals, which are expected to close in Q3 and Q4.
Q: What is the major contributor to operating expenses?
A: The major contributors are the amortization and charge-off of inventory, along with distribution expenses for broadcasting.
Q: How is the company ensuring that the charge-off of new content acquisitions aligns with their economic value?
A: The company typically looks at an 18% IRR at the time of acquisition and charges off inventory based on the estimated useful life of the asset, which varies depending on the type of content.
Q: What is the company's strategy for the gaming collaboration and its future potential?
A: The gaming collaboration is part of a broader strategy to be future-ready with Web 3.0 and metaverse technologies. The company does not expect immediate returns but aims to stay ahead in the evolving digital landscape.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
