Hindustan Media Ventures Limited (HMVL.BO) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. This is Aaditya Mulani from the HT Media Group. I would like to welcome you all to our quarter 2 financial year 2025-'26 financial results. [Operator Instructions] I now hand over Ms. Anna Abraham, HT Media Group's Deputy CFO, Chief Financial Officer HMVL and Head Investor Relations. Thank you, and over to you, Anna.

Thank you, Aaditya. Good evening, everyone. Welcoming you all to the earnings webinar for the second quarter results of financial year '25-'26. On the call today, we have Mr. Piyush Gupta, Group CFO. Mr. Pervez Bajan, Head Financial Controllership and Taxation, and members of our Investor Relations team. The financial results of Hindustan Media Ventures Limited were announced yesterday, and those of HT Media were released earlier this evening. We will be discussing these results during the course of the call. Our discussion today will follow the presentation slides which, along with the financial statements, are available on the stock exchanges and in the Investor Relations section of our respective websites. As we go through this call, kindly keep in mind the cautionary statement on the slide. As per our usual practice, we would not be providing any specific guidance on revenue or earnings today. This slide features the comments from our Chairperson on the company's performance on the concluded fiscal quarter and I quote, "Building on the performance of the first quarter of the financial year, we are happy to bring you another quarter of solid performance with growth in both operating revenue and profitability on an annual as well as a sequential basis. Overall revenue for the Print business grew both annually and sequentially. This growth, combined with our focus on costs, translated into a further expansion of operating margins. The Radio business saw a sequential improvement in revenue and segment profitability this quarter. This came even as a core radio proposition across industry remains under duress. We continue to deploy focused efforts to improve the business by enhancing our varied offerings within the segment. The Digital business, too, has posted another set of strong revenue numbers, demonstrating consistent growth on both an annual and sequential basis. As we continue to scale this business, margins remain suppressed in the near term, which is aligned with our growth-oriented strategy. As we navigate the emerging media landscape, we are strategically adapting across all business verticals. We are driving our Digital business through targeted content initiatives. Simultaneously, we are reinforcing the value of our core Print portfolio while sharpening the focus of our Radio business on integrated formats and immersive audience experiences. Your continued confidence in our vision is fundamental to our progress. We remain unwavering in our commitment to inform, educate and entertain our large and diverse audience." Slide 4 gives the agenda for the day. We will start with a discussion of the consolidated performance followed by business unit performance after which we will open the floor for question and answers. With this, I hand over the call to Mr. Piyush Gupta, Group CFO.

Thanks, Anna, and thank you, Aaditya. Good evening, ladies and gentlemen. Thank you very much for making the time to attend our Q2 FY '26 earnings call. Slightly later in the evening than usual, but I'd like to draw your attention to the screen where we have a consolidated financial summary. As you can see, there's an improvement in EBITDA margins and there's a robust cash position. I'll just quickly take you through the numbers. If we look at a Y-o-Y performance, you can see that the total revenue is up 4% at INR 499 crores, and EBITDA has a good improvement at 33% coming at INR 44 crores with the EBITDA margin expanding by 200 basis points at 9 percentage. PAT margin is about a breakeven or negative, and the net cash position remains healthy at INR 947 crores. If we look at sequentially, again, there's a growth of 11% with revenue at INR 451 crores in the previous quarter. And on a net cash basis, again, it was INR 976 crores in the previous quarter. Moving on to the business unit performance. Let's go into Print first. So if you look Print, our ad revenues have grown by 10%, which is at INR 278 crores versus INR 252 crores same quarter last year, with the total operating revenue coming at about 7% growth. Our operating EBITDA at INR 40 crores is nearly double of what it was the same period last year, with the margins expanding about 500 basis points. Sequentially, again, the growth is at 9% over the immediately preceding quarter. If you break out the Print business between English and Hindi, for the second quarter, we can see an 8% growth in the English revenues coming at INR 154 crores. And if you look at sequentially, it's a 10% growth. On a circulation revenue, there is a marginal decline of 15%, but sequentially, there is a growth of 20%. This is in sync with our circulation strategy, whereby we are tapping and making our copies more robust in various markets. And hence, some pricing actions have been taken, but this is all a part of our strategy. A quick look at the Hindi business. As we can see, there's a 13% growth on a Y-o-Y basis and 7% on a quarterly basis. on circulation revenue, again, the numbers are flat, both on Y-o-Y and Q-o-Q basis. Radio. Radio, as I've been speaking in various calls, remains a bit under stress. We are trying to do our level best. There are various strategies in play, but the revenue came in at INR 32 crores, which was marginally lower than the same period last year. However, versus the immediately preceding quarter, there is a growth of 4%. On our operating EBITDA, it was a negative INR 4 crores versus the immediately preceding quarter, there is a growth of 43%. A quick look at Digital. Just to remind, this is not the digital business. This is the OTTplay business. So as you can see, the revenues have grown 10%. Operating revenue has grown 10%, and operating EBITDA is at a negative INR 30 crores. On a sequential basis, the growth is at about 8%. And with that, we come to the end of the presentation. I'll pass it on to my colleague.

Thank you, Piyush. [Operator Instructions] The first question is from the line of Mr. Ranga Prasad. Please unmute yourself and ask your question.

Am I unmuted now?

Yes, you are, sir.

I have 2 questions. The first one relates to the stand-alone exceptional item loss of INR 37.76 crores for HT Media. Could you please elaborate as to why this loss has come about? The second one is pertaining to the high loss in our digital segment. For some time, it looked like the digital losses were coming down, but once again, the trend seems to have gone the other way with Digital losses increasing to INR 30 crores from INR 21.7 crores. Could you please throw some light on this as to why the Digital losses are increasing?

Ranga Prasad, I'll just ask my colleague, Anna, to take the question. Anna, please?

Yes. Are we audible.

Yes.

Okay. So taking the first question on the stand-alone results of the impairment, this is linked to the investment that is held in three entities actually. The two are Radio entities, Next Radio Limited and Next Mediaworks Limited. And the third is on account of an investment in Mosaic Digital business. So those are the 3 impairments which has happened. Linked to certain -- in the past, Next Radio Limited for the operational requirements of Next Mediaworks Limited had done some -- lent some money. Now in consequent to the operations being at what it is, it was evaluated that the money could not be returned and therefore, there is the impairment taken on the debt position in this thing. And since NRL is also a subsidiary of HT Media Limited, there is a charge which is being taken in HTML books. On account of Mosaic, there's a certain valuation of the business, which was established vis-a-vis the extent of funding that has today happened and therefore, there is a minor impairment that had to be taken on that. But the larger impairment is on account of Radio linked to this.

Thank you, Anna. Ranga Prasad, if I may just expand on this thing. I think 90% of this impairment that you're seeing in the standalone results of HT Media are consequent to the performance in our Radio business because that investment is tested for impairment at every balance sheet date, and September is the balance sheet time. You know, 90% of this amount is being driven by that, and this is consequent to our Radio performance, which obviously we've been at it, but right now, we are facing a challenge. I hope that clarifies the question.

Yes, coming to the second part, yes, there has been -- as we are scaling up revenue, the losses have also been reducing. However, in light with a certain unexpected scale-up that happened in OTT, which is the good news for the business, there is some cost which has come in, in the quarter where the benefits will actually start showing up in the next quarter. So there's a bit of a timing difference in terms of the revenue gone vis-a-vis the cost incurred, and that is why the losses are showing a little increase as of now. Otherwise, going forward, we should continue to see a drop in losses.

I can only hope that in the coming years to come, our Digital business will turn profitable and will contribute to the bottom line for our company. Thank you.

Thank you very much for your good wishes. We are at it. What I can assure you all, and this is primarily our OTTplay proposition, I think from a business point of view, the kind of subscription that we received in this quarter, consequent to various things, including cricket, et cetera, is very good from a business perspective. Of course, it's given rise to a slightly enhanced level of losses. But I think from a long-term perspective, this will augur well. And thank you very much for your well wishes.

Thank you. The next call is from the line of Mr. Yash R. Please unmute yourself and ask your question.

So my first question is with regards to the circulation revenue. I can see that there has been a sequential growth in English, particularly. But year-on-year, it has been down, right? And that's by a huge number like 15%. And if I remember correctly, that was around 22% in Q1, in the previous quarter. so what are we doing about that? And what about the copies? Now you've mentioned that we've increased the cover price in a few regions, right, in a few markets. But what about the circulation per se?

See, I'll request my team to fill you on this, but let me just give you a slightly high-level perspective here. So we are in the midst of recruiting more readers and hence, optimizing our circulation. And when I say optimizing, I mean, scaling up our circulation. But this, we are not doing carte blanche. This, we are doing market by market, looking at the market potential and the competition activity there, right? When you have to ramp up circulation, somewhere you have to let go of pricing in the short term to get those circulations sticky for the long term, and that's what really it is. I would request my team to kind of just fill you on the details on this front.

So Yash, to add on to what Piyush said, there is growth in copies, both Y-o-Y and sequentially. However, there are certain pricings now. When you look at in English specifically, unlike in Hindi, the circulation revenue is a much smaller number in proportion. So therefore, a INR 1 crores, INR 2 crores change also translates to a 15% to 22% in percentage terms. But in absolute rupee terms, you will see that it's only about a INR 2 crore variation on an English business portfolio that you are seeing. And that is linked to -- when copies move, there is a combination of mix also. When copies move from line to -- line is where you pay by cover price versus subscription copies, that mix also impacts pricing. And then there are, if any kind of pricing discounts is adopted or a gifting is adopted by the industry, that also impacts. Otherwise, copies have grown both sequentially and on a Y-o-Y basis.

And that's for both English and languages, ma'am?

That is correct.

And what will be percentage particularly in English?

We would not be able to share that number because -- but both have grown.

But approximately, is it double digit or is it single digit?

It is competitively sensitive, so we will not...

Yes, Yash, we would like to not give...

Okay. And which are the verticals that have contributed to this ad growth, which is around 8%, right?

As was mentioned in our deck as well, mostly all commercial categories are fired. Festive has come in early, and that has kind of helped in ensuring that all commercial categories are fired. This is true for both English and Hindi. In Hindi, there is growth in the government segment also.

And has the growth come in from the volume? Or has there been some play of pricing as well?

Both. There is volume growth and pricing growth for us.

One thing that I noted in the results is that staff costs or the employee expenses have reduced sequentially in HMVL and in HT consol as well versus previous quarter sequentially.

Yes.

That would be on account of?

So we have certain variable component to all salaries. And as with the -- when subsequent to the variable component would be because it's benchmarked to certain parameters, there would be a provision which is carried in the year. Subsequent to payout, there will be a reversal if there is any change. The quarter 1 had some reversals and that's the reasons why.

Quarter 1 had a reversal, but what about quarter 2?

Yes, quarter 1 had a reversal in salary and therefore, quarter 2 is not comparable.

No. So in fact, quarter 1 should be lesser, right?

There is a reversal in quarter 2, which is impacting the comparison as a point we have made.

Okay. Reversal in quarter 2, not in quarter 1. And what about the rates...