Hindustan Media Ventures Limited (533217) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. This is Aaditya Mulani from the HT Media Group. I would like to welcome you all to our Quarter 4 and Full Financial Year 2024-'25 Earnings Webinar. [Operator Instructions] I now hand over to Ms. Anna Abraham, CFO, Hindustan Media Ventures Limited and Head Investor Relations, HT Media Group. Thank you, and over to you, Anna.

Thank you, Aaditya. Good afternoon, everyone. A warm welcome to all of you to the earnings webinar of HT Media Group for the fourth quarter and full financial year '24-'25. Joining me on today's call are Mr. Piyush Gupta, Group CFO; Mr. Pervez Bajan, Head Financial Controllership & Taxation and members of our Investor Relations team. We will be taking you through the highlights of the financial results of Hindustan Media Ventures Limited, which were announced yesterday and the results of HT Media Limited released earlier today afternoon. Please note that our comments during this webinar will be in line with 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. Please refer Slide 2, which is a cautionary statement. In line with our usual practice, we would not be sharing specific guidance on revenue or on earnings projections. The following slide present are our Chairperson's perform for the quarter and the full year "In the last financial year, your company saw consistent growth in terms of both revenue and profitability in most quarters, indicating a broad-based upswing, especially in the latter half of the year. The improvement can be attributed to conscious efforts aimed at growing the business, incrementally higher pricing, a dip in prices of key commodities and cost rationalization. The annual festive season saw increased spending by consumers, and this, along with elections in some states provided a conducive environment to growth in the second half of the year. In terms of annual consolidated performance, your company's total revenue as well as profitability saw a marked improvement. Our Print business revenue remained stable even as it saw a considerable rise in profitability. Our Radio business grew revenues on the back of a focus on on-ground events, although its margins remain under continued pressure. The Digital business, led by OTTplay, once again posted strong revenue traction, and also saw incremental improvement in margins on account of better cost control. Treating the just-ended financial year as a springboard, your company is looking to keep the momentum going in the Digital business, build on the gains made last year in the Print business, and streamline the Radio business. Your support and trust drive what we do. We're committed to delivering reliable news and meaningful entertainment that keeps multiple audiences informed and engaged." Today's agenda will cover the consolidated financial results for the fourth quarter and full financial year '24-'25. This will be followed by details of our print, radio and digital business segments. Following the presentation, we will open the floor for a Q&A session. With this, I hand over the call to Piyush.

Thanks, Aaditya. Thanks, Anna. We will be tracking the webinar on the screen. So, let's dive into it. So, the first slide is consolidated financial summary. As you can see, growth seen in the overall revenue and profitability for the concluded quarter as well as the fiscal year. On the left side is the quarterly financial, on the right side you can see the annual numbers. Robust improvement in net cash position as compared to the prior year. So, total revenue on the quarterly basis grew 12%, PAT grew 88% from INR 30 crores to INR 57 crores. On a full year basis the revenue growth was 7% and PAT came to a positive number at INR 20 crores, which is a substantial increase and EBITDA grew by 58%. If you see the net cash position, we have as of 31st March cash in excess of INR 1,000 crores on the books. Diving into the print performance, despite muted growth in advertising and circulation, segment profitability remains very strong led by softer newsprint prices. So, as you can see, the ad revenues are flat to marginally declining across the quarter and year. But if you look at the operating EBITDA margin, there is a strong growth and quarter ended with EBITDA of INR 61 crores and on a full year basis it is INR 121 crores which is a growth of 67%, with the margin expansion also 300 to 400 basis points. If you break down the print into Hindi and English, let us look at the English numbers. So, Y-o-Y, the revenue -- ad revenues are flat which is a minus 1% and on a full year basis it's a growth of 3%. Circulation revenue, there is a decline of 27% and on a full year basis it's a decline of 14%. Hindi, again we see the softness in revenue continuing with a decline of 5% on a quarterly basis and a 4% on an annual basis. On a circulation revenue, you see 7% decline on a quarterly basis and a 9% decline on an annual basis. Radio, now segment revenue improved driven by on-ground events during the year and margin however continues to remain soft. On the top line, you can see the quarterly numbers on top line grew 72% to INR 82 crores and on a full year basis INR 204 crores which is an increase of 30%. Digital, as you can see strong growth in segment revenue growth for the quarter and the fiscal year led by OTTplay and Shine business and segment losses reduced during the [indiscernible] of the year. On a quarterly basis, roughly grew 35% to INR 58 crores and on a full year basis to INR 212 crores which is a increase of 38%. Yes, with that we come to the Q&A.

[Operator Instructions] The first question is from the line of Mohit Kumra.

So this is Mohit. My questions are specifically directed to HMVL and to OTTplay to get even more specific. So now we -- in this quarter, we have done about INR 20 crores of revenue and we are losing INR 1.50 for every INR 1 of sale approximately. So do you -- what is the rate at which you expect growth in the coming year in revenue? And at what point do we at least get to a 1:1 breakeven what is your estimate in this matter?

So, we don't give specific guidance on it, but broadly as you can see, we have been growing on a quarter-on-quarter basis and the losses have also reduced from what we had reported last year. We expect to keep up the momentum on the growth side given that it's still a very nascent business from that perspective and hopefully by end of this year, we should be in a breakeven situation. But it depends on if we scale fast enough, we may invest more on the business as well. So difficult to predict, but we would be looking for -- to continue the growth momentum.

Okay. In the last call, when I spoke to you, we broadly agreed that 1% of the paying subscribers in India is your baseline assumption, which is around INR 200 crores, INR 250 crores of revenue. When do we expect to reach this? You sound very confident, by the way, in your traction of the business, I must say. So am I reading this correctly that you are very confident in…

Mohit, this is Piyush this side. So look, Mohit, I think broadly, because we don't give any guidance and we are investing behind the business in which we are seeing some traction on the top line, which, of course, is coming for a reasonable amount of cost. But if you are looking at one unit of revenue to a unit of cost, this year is definitely much more efficient than the year prior. And I can absolutely bet that next year will be efficient. Now looking -- doing a crystal ball gazing and saying when will we reach a 1: 1 unit, I can't say, but I can tell you the plans that we have put forward drives efficiency much more aggressively, and that's because of the last 2, 2.5 years experience that we have built into this thing and various efficiencies and productivity measures that we are driving. But can we tell you with some amount of confidence that it's going to happen in 3 months, 6 months or a year, we can't.

But traction is definitely there. You are not disappointed.

If you see the fourth quarter growth versus the same quarter last year versus the first quarter, both in absolute number and the gradient of growth, you can see a difference. I mean, just look at the first quarter's call versus this quarter's call on OTTplay.

Yes. And do we expect similar growth going forward?

Well, that's the plan.

Okay. Can I ask one more question, please?

Go for it.

On your latest balance sheet, how much -- and I'm only speaking of HMVL right now stand-alone?

Substantial part of it is sitting on HMVL balance sheet.

No, no that I understand. My question is absolutely different. What is the amount of that ad for equity property, which is sitting on your balance sheet right now?

Well, we don't give that number separately, but I can tell you for quite some time now, a substantial part of our ad for equity deals are happening on the HMVL balance sheet. So a substantial part of the properties and the risk and reward and the economics of that is sitting in HMVL's financial.

But you give me that number every year. I ask you every year and every year you give me a number of how much...

Overall number, but...

Broadly, I will give you that number this year also. So look, what I give you every year is on a fully diluted basis, our investment position will be north of INR 1,000 crores. Now those numbers are very, very high numbers. We will not be able to give you a diluted say what's equity, what's convertible instruments, what's real estate, what's profit, what's the revenue and so on and so forth. But a substantial part of that is sitting in HMVL for sure.

So last year, you confirmed that it was approximately INR 250 crores. Are we still around there only? I am talking on of HMVL.

I can't either confirm or deny that.

The next question is from the line of Yash R.

I am Yash. I have a couple of questions. First to begin with, I was trying to analyze the numbers from a print perspective. I can see that the operating revenue is almost flat for HMVL, but I think HT English has done well. So where have we done well because in the presentation, I couldn't see that in the revenue itself.

So if you see in the presentation we have actually called out in the respective areas also. So the Hindi has not done well because of a large revenue from government in the base. Last year prior to the national election there was a fair bit of spend happening from the government end. So most vernacular players especially Hindi players you would see have had a substantial revenue coming from the government, because of which has -- which is of course not maintainable this year because the first quarter had the COC also coming in and therefore most Hindi players have declined on the back of decline in government revenue. Commercial revenue has grown even in Hindi and in English, we have seen growth because growth government was not such a substantial component and we've called out the critical segments in our deck as to which are the segments which also contributed to the higher revenue.

Okay, thanks for the information. But my question was slightly different. What I'm trying to say is that the revenues have declined, right. It is at INR 158 crores versus INR 159 crores, yes, definitely for English and even the circulation revenue has taken a beating of around 27%, but there seems to be an uptick in the operating profit. So what has worked well, which is there cost side which seems to be?

Yes, cost has substantially improved because if you remember, last year was a year of heightened newsprint pricing. And therefore, most of the margin expansion is attributed to the savings in newsprint that's come through. Having said that, the advertising revenue also saw basis a mix of categories and absolute price increases, there has been an overall yield improvement in the advertising revenue despite growth not being that strong. And therefore, that has also contributed to the margins.

So what has been the improvement in yield in terms of percentage or if it is…

We won't be able to quantify that for you but there is a real improvement out there.

And what about on the volume front?

One will give you the other, right, so we won't be able to give you the split.

Okay. And also what about the employee cost, those have gone down in this quarter again?

You are now referring to the quarter-on-quarter number.

Correct, correct. Yes. It is at around INR 43 odd crores versus INR 46 crores in the previous quarter.

This is consol, right? that you are looking at.

Yes, I am talking about consol that's correct, yes.

This is quarter INR 114 crores and INR 108 crores those are the numbers you are looking at.

No, I am talking about INR 43 crore, which is sitting in your HT consol. I am sorry I am talking about…

You are looking at standalone number that's the confusion. Consol number is the confusion.

Okay, okay.

That's kind of I mean flat marginal…

Okay. And what about the increase in your other income, which seems to be from HMVL primarily?

That's largely treasury. We had a substantial gain in treasury given that there has been favorable yield movement in line of rate actions as well as anticipated actions in the market.

So it's mainly yield is what you are talking about right? The return.

Yield income, we were positioned to take advantage of the yield movements in the market.

Okay, all right. So…

Dear participant. Sorry to interrupt, but may we request you to fall back in queue for… The next question is from the line of Mehul Parikh.

So I had a question on the accounting side primarily that is say we are -- we get around annual subscription of say INR 2,400 from a OTT subscriber and we are say offering a coupon of 40% or 50%. What do we take as a top line? Meaning, in segment revenue, do we take INR 2,400 and put INR 1,200 as expenses in the result or do we take net of INR 1,200 as the segment revenue?

Net.

Net, we take net as a segment revenue, right?

Yes.

And for MSOs also it works the same way?

For what?

The wholesale buyers like MSOs and the tie-ups that we do.

Yes, yes.

It works the same way. Okay. And one more question. Hindustan Ad Ventures is an initiative of HMVL or is it under some other company?

It is under HMVL.

The next question is from the line of [ Jay Datani ].

This is Jay Datani, I'm an individual investor. So my question is specific to the radio segment. As you can see, there's a significant improvement in the top line in the radio segment. But at the same time, the losses have gone up quite significant. So if you can give us an explanation on that? What is the reason there?

We have actually called it out on the investor deck also to say that the increase has been largely on the account of on-ground events that we have done in this year. Unlike the core FCT revenue, which every increase in revenue falls to the bottom line because of the fixed nature of the business where the cost is mostly on the statutory fee side, when we go into the non-FCT streams of revenue, there is bound to be a related cost also associated with it. This year we went -- we kind of experimented with certain scaled events and therefore the cost structures were little higher than our usual events that we do. Doing events is nothing new, just that this year we went for couple of big initiatives, which is why you are not seeing the commensurate improvement in the profitability.

All right. And going forward if you can give us kind of a guidance on that segment?

The FCT revenues still remain a challenge largely for the industry. So, while we are at it and we will see some level of growth, we believe the larger growth will come in line of non-FCT initiatives. That doesn't mean that it is only events. There are many initiatives that we do including on-air properties, which we are focusing more on from a segment perspective.

The next question is from the line of Mehul Pathak.

Congratulations on a positive set of numbers. I think after a long time, we are seeing such good numbers. Two questions. My first question is related to the segment results. Now, if you could just throw a little more granularity on the quarterly INR 47 crore number for printing and publishing compared to INR 26.33 crores last March? So, the delta INR 21 crores that is coming, from where is it coming? Second question, not second question, the other question related to segment results is that on radio and digital, the assets deployed are INR 278 crores and INR 37 crores and the losses are INR 37 crores and INR 102 crores. In fact, the digital on INR 37 crores, we are showing a loss of INR 102 crores. How do we interpret these numbers and what do we make of that? Second question is, Hindustan Media, I was, little taken aback yesterday that we have decided to invest in a company that is electric mobility related. We are not paying dividend there, but investing in an electric mobility company. Now, if you could explain the logic of doing that, being a media company?

Mehul, I am going to take your questions in the reverse order. So, the first on the investment, it is not a cash investment, it is an AFE investment itself. So, there is no cash being deployed for that investment, it is just that it triggered disclosure, that's that. So, there is no cash being deployed in that investment. On the Digital business, on a full year basis, we have actually reported INR 212 crores of revenue with the loss and you can see that it's a substantial improvement versus last year because as we have been articulating and you have also seen in HMVL, there is a huge investment which is going in OTT to kind of build the business, this is second full year of operations. And we have, therefore, seeing it as an investment and that is contributing to it. So, this HMVL also adds up to the -- OTT also adds up to HTML, so it is both in HMVL and HTML, that's a big component which is coming. Both -- but OTT has significantly scaled in terms of revenue, which was the initial query from one of the participants as well. We have also seen good healthy growth in Shine businesses and we have seen it improve on the profitability as well. There is a smaller business also that we are investing on, which is our Mosaic business, where on the core product proposition, et cetera also, we have in this year done some level of investment for scaling up, that's for the revenue going forward. That is also forming part of this segment, but that is -- though that investment is nowhere compared to the kind of investment we are doing in OTT. So, from INR 154 crores of revenue last year, digital revenues have grown to INR 212 crores, while the losses we have reduced from INR 114 crores to INR 102 crores. So, we are scaling revenue, but it is also at a lower loss position. Coming to the radio, radio we spoke about that it is a mix of revenue which is impacted and that's a very different scenario from the Digital business, which we are being about and radio will see, unless the regulatory changes come in, there will be some level of pressure on margins from that perspective, because the FCT, that platform has not seen revenues come back post-COVID to the extent say, print has or digital has, et cetera.

On the Printing and Publishing segment, this entire uptick that you are seeing coming is as Anna was explaining earlier to another participant earlier, there's been a lot of work which has been done on yield, which has given a lot of operating leverage and which is falling to the bottom line. So it's all print which is driving that uptick in profitability.

When you say yield, I do not exactly understand what it means.

There is newsprint savings on one hand and there is advertising price. When we mean yield, we are actually talking about pricing of advertising, it is not termed as yield in the industry. And these are the categories that we have seen contributing this year as well as conscious price correction that we have been on, which Piyush talked about last year -- has been talking about since last year. We managed to make inroads there and therefore, we are -- the revenue growth, revenue that you are seeing in print is despite volumes being negative in the market. So, that means that we have been able to improve the pricing on our end.

Just a follow-up question is that on digital and radio at this rate, we will wipe out 6% of net worth almost every year. So, is there any thought on the run rate of the losses the next few years, how much it will come down?

Yes, we will need to -- if we need to build businesses, businesses are difficult to set up within 2 years. So, therefore, there will be some level of investment that we have to do, if we have to get inroads, make inroads into a new business segment, which is what OTTplay is and to establish it. What we have been able to demonstrate is that we are scaling up by reducing losses and we hope to be on that journey, but the intent is to build businesses and therefore, we will see some more investment before the returns come through in that. Radio, while there is this loss, it is not a significant number at this point of time and we did see breakeven, basis mix, we did see when we scaled up, we saw some negative and hope is that we will bring it back to breakeven to positive sooner in the near term itself and that is a different story. Digital, of course, we are building businesses. So, we will have to invest a bit before we can achieve that.

But please take a look at ENIL numbers. ENIL has reported a fantastic set of numbers on radio.

Actually, yes, we have seen those numbers. No, no, profit growth is not there for them. Maybe it is -- profit growth has declined actually, while they both of them have the advantage of being in non-metro, which is actually growing faster than metro, while we are a metro player. But anyway, we should move on.

The next question is from the line of Yash R.

Yes, Anna. So, I was just asking about this question about your employee costs, which have actually gone down versus previous quarter. So, it was INR 114 crore in Q3, which ended on December '24 versus INR 108 crore. So, why is there a reversal in this quarter, because normally that happens in the first quarter, right?

In some businesses, we have had some rationalization. So, therefore, that accounts for part of the difference and the part is, yes, there could be some reversals in the quarter. And then, there's also sometimes the quarter 3 is a festive quarter. So, there is some level of incentive, et cetera, which gets paid off, which is not a run rate number.

Okay, got it. And again, in terms of HMVL, now I know I spoke about, I asked this question earlier as well, but does other income of HMVL include some profit on sale of AFE investments as well?

Yes, it does.

But the larger gain is on account of yield is what you said, right?

This year, there is a substantial profit on sale of AFE also, but yet the larger component is the credit.

Thank you all. With this, we come to the end of the Q&A session. If you have any further queries, please reach out to the Investor Relations team. Our contact details are given in the investor presentation and are also mentioned on our websites. I now hand over to Piyush for closing remarks.

Thank you, Aaditya. Thank you, ladies and gentlemen, for joining our Q4 FY '25 and full year FY '25 call. We are pleased that some of you like the set of numbers that we published. We hope that this trajectory will continue. We have already drawn our annual plan, which is a growth plan, basis which we will strive and do our best to get greater performances and our investment in future looking businesses, which will create long term sustainable value for all shareholders is something that we are at it and we will strive to do our best. With that, thank you so much and we look forward to seeing you in the next quarter's call.