HT Media Limited (HTMEDIA.NS) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Amit Madaan from Investor Relations team, HT Media Group. I would like to welcome you all to the quarter 1 2021 earnings webinar. [Operator Instructions] I now invite Ms. Anna Abraham, Head, Investor Relations, to take forward the webinar. Thank you, and over to you, Anna.

Thank you, Amit. Hello, everyone. A very good afternoon to all of you. Thank you for joining this Zoom webinar to discuss our financial results for the first quarter of fiscal year 2021. I trust all of you and your families are safe and healthy. Present with me in the webinar today is Mr. Sandeep Gulati, CFO of Hindustan Media Ventures Limited; and Mr. Pervez Bajan, our group Controller. Mr. Piyush Gupta, our group CFO, could not join the call on account of some personal exigencies. If circumstances permit, he will be joining us during the course of the call. We would be, during the course of this webinar, taking you through the details of our results for the quarter. As always, our remarks today will track the presentation on webinar. The presentation is also available on the Investor Relations section of our website. I would now move on to the presentation and draw your attention to the disclaimer regarding forward-looking statements, which is included in Slide 2 of the presentation. Kindly keep this in mind, as we have the discussions during the course of the webinar. Moving forward, the next slide gives the chairperson's comments on the results of quarter 1 for HT Media Group. She says, and I quote, "The quarter started amidst the nationwide lockdown imposed to combat spread of COVID-19 pandemic that severely impacted businesses across sectors. This went on to last till end of May, although many restrictions, especially for business activities, continue to remain in place. The result was a sharp decline in advertising spends, which impacted revenues across our Print and Radio businesses. The impact was higher in the initial period of the quarter, followed by a gradual recovery in May and June. We observed a similar trend in circulation revenue, even as we undertook awareness initiatives to educate customers about the safety and hygiene standards in the newspaper supply chain. Although we undertook immediate cost rationalization measures, these could not fully counter the sharp decline in revenues. Consequently, operating profitability for the quarter has been adversely affected, although it has been mitigated to some extent by income from treasury operations. It is difficult to estimate the extent and time line of recovery as this will depend on how the impact of COVID-19 on the economy is contained. However, the company still has more than adequate liquidity to be able to ensure the smooth functioning of operations. Our prime objective is to deliver a quality product to our customers and consumers. We expect financial performance to improve progressively, but gradually, in the coming quarters as the situation normalizes and demand revives. We remain committed to serving our readers, listeners and advertisers and will remain agile in managing operations in the appropriate manner, given the changing environment." Moving on to the next slide. We will now be starting the presentation on the financials. We will cover the consolidated performance, followed by business unit performance on both Print and Radio. And on Print, we will be further talking about English and Hindi separately. Moving on to Slide 6, which gives the consolidated financial summary. Total revenue for the quarter was INR 240 crores, which was a decline of 59% Y-o-Y on account -- which is witnessed across business and mainly led by volume drops. EBITDA from an INR 89 crore profit last year is a loss of INR 28 crores, which is INR 117 crore drop versus quarter of last year. While the revenue has dropped by about INR 348 crores, given all the cost corrections, we could limit the EBITDA loss to INR 117 crores. We continue to have -- the PAT is at INR 28 crores -- vis-à-vis a INR 28 crore profit last year, is at a INR 56 crore loss. But the net cash position remained strong at INR 1,011 crores, which is on account of strong actions that we did to kind of conserve cash in this highly uncertain environment. Moving on to the business unit performance and covering Print. Print ad revenue, quarter 1 '21, was INR 85 crores vis-à-vis INR 362 crores last year, which is a INR 277 crores drop and a 77% decline. Circulation revenue was at INR 41 crores, vis-à-vis INR 64 crores of last year, which was a 37% decline. So overall, operating revenue came in at a 68% decline, which was INR 300 crores short of what was the performance last year this quarter. But given the cost actions, we could limit the EBITDA erosion to INR 115 crores. Key drivers, as mentioned below: decline in both commercial and government ad revenue streams; the impact on newspaper distribution, given the lockdown affected circulation revenue, it got gradually better over May and June. Hindi was impacted lesser than English due to regions with lower impact [indiscernible] lockdown restrictions; and we did cost rationalization to the extent feasible across line items because the revenue decline was very sharp. Beyond a point, it's not possible to take cost actions with such immediate effect. Moving on to Print English. The ad revenue came in at 82% decline, while the circulation revenue reported an 85% decline. While there's been a significant drop in revenue vis-à-vis market share, we are holding good. So in fact, there's a significant improvement in the ad volume market share. The decline was more on local advertising, and -- rather than the national advertising. The ad revenue degrowth was obviously led by lower volumes on account of COVID-19. And across all categories, we witnessed softness, led by education, automobiles, real estate, entertainment and retail. Moving on to Print Hindi. The ad revenue decline was 70%, while the circulation revenue was a decline of 23%. There, again, in Hindi, we've seen our market share grow across key geographies. There was also improvement in the RPC despite a challenging environment. There is decline in ad volumes given the economic activity in disruption during the lockdown. And across categories, there was muted volumes, but higher decline was seen in education, automobiles and retail categories. Moving on to Radio. Radio operating revenue was only INR 8 crores vis-à-vis INR 64 crores last year. So that's a INR 56 crore change and an 88% decline. EBITDA was a INR 31 crore loss vis-à-vis INR 16 crore profit. So there is weak operating revenue even for Radio, led by the sector-wide volume decline post COVID-19. The decline was led by real estate, FMCG and automobile categories. The decline in revenue was offset to some extent by cost. Having said that, we had to create some provisions on receivables, et cetera, given the environment. So some of that benefit could not fully fall to the EBITDA. And a lot of the cost actions, the benefit will be seen more in the future quarters. With regard to Radio operations, there is, of course, limitation on cost savings on account of the extent of statutory costs. This brings us to the end of the presentation on the financial results. We now open the floor for Q&A. [Operator Instructions]

[Operator Instructions] The first question is from [ Mehul Pathak ].

Yes. May I request you to give some idea about any plans to restructure loss-making subsidiaries. I think year after year, there are many subsidiaries that are just not showing any positive contribution to the bottom line.

We have actually, over the last -- course of last 1 to 2 years, significantly rationalized all our loss-making subsidiaries. Now the only one which is kind of loss making is what we have acquired as part of the Radio One acquisition. Given the drop in Radio revenues, that's also now become a loss-making entity. Otherwise, over the last 1, 2 years, we've kind of significantly already rationalized all the loss-making entities.

The next question is from [ C. Daga ].

Yes. How do you see the future of the Print industry, and especially nowadays newspapers getting on -- hello?

Yes.

Yes. And nowadays we are getting the newspaper on various social media also, such as Whatsapp, Telegram. So question one is, how do you see the future of the newspapers? And the second question is, are we planning to tie-up with any other social media platform for distribution?

Sorry, I missed your name.

My name is Chandrasekar Daga.

Yes. Mr. Daga, see, we -- difficult to predict the future as such. But what gives us hope is that consequent to the lockdown that happened in March and which extended all the way up to May, every week, every month, we've been seeing significant improvement in the advertising revenue as well as circulation of copies in our markets. And in the Hindi markets, because they were non-metro and were less affected in the initial couple of months, we actually didn't see that level of a drop in the copies in the first place. So therefore, every month and every week, like I said, there's a significant improvement, which needs us to believe that it's really a function of the issues that's being faced in the market. And as and when the overall environment improves, a lot of the business will come back. We, of course, ourselves have kind of did take action because in the initial days of the lockdown, our first and foremost priority was to try and be able to service our customers, which are the newspaper readers. And we, ourselves, made the newspaper available, in e-paper form, by tying up with various distribution channels, including banking channels, et cetera. So that at least we -- our customers could access the paper. And as and when the locations have opened up, we've been constantly being able to build back the copies also. So we remain hopeful, and I think it's a larger question, and to some extent, when some people -- we anecdotally picked up that people are actually reading newspapers a lot more these days and it's largely work from home and the demand for newspaper still seems to be there. But difficult to predict the overall future at this point of time given that nobody knows how long this situation is going to remain and what will be the intensity.

Okay. But if I can just follow-up with the same question. Do you think people would be willing to pay for a hard copy if they are getting a soft copy online? And if you can share some more trends that you all are observing?

So we will -- like we mentioned in the presentation, we actually saw that we are able to keep the pricing and realize the money we needed from the copies. It was more of our copies being able to reach given the lockdown situation, which had a problem. And a lot of the news websites, et cetera, offered a large amount of free data during that environment, but that will not continue when the environment retains. So there will be a market for online and physical. But all online information will not be as free as it was during the lockdown days.

The next question is from [ Mohit Kumra ].

Yes. So I am an HMVL shareholder, only for Hindustan, like the Hindi paper, HMVL. So I would be very -- if you could just give me a response in that context of HMVL only. So firstly, congrats, you only have a 23% decline in circulation, which is very impressive. But I want to ask you, you have told us that there's an ad revenue decline of 70%. But this is obviously an average over the quarter, right?

That's right.

If I ask you right here, right now in July vis-à-vis July last year, what is the ad revenue decline right now, like?

I wouldn't want to give future situation, but I can tell you that, like, for example, June was already at around 50%, 55% decline for Hindi, and July is a far better number.

So progressively, as you said a while back, week-by-week and month-by-month, it's coming back.

That's right.

But do you expect it to come back to full at any point? Or do you see a structural change in the ad industry or the -- Print ad industry, so to say?

No. We are not expecting a structural change, in fact. We believe that if the situation had come to normal sooner than it had, probably the extent of the impact would be lower. But having said that, this year, even when you were looking at it, we had all hoped that normalcy would have come in by July/August. And right now, it looks as if there are areas, pockets which are getting better than there are pockets, which are getting worse and then the situation seems very unpredictable. And therefore, there's going to be a lot of categories, which will get impacted. But slowly, surely, because it's not just about us, every category that advertises with us also has a need to survive, and they will have to reach their customers. And I think as and when they kind of figure out how to operate in this new environment and the -- in new environment, we'll also be sharing a benefit of that.

Okay. Can I ask you something, which is a little more subjective and a little forward looking, obviously? Is management confident of having operating profits in the coming quarters? This time, we did not, in HMVL.

And Q2 will also be challenging because the situation is a little difficult, even continues to be difficult. But like I said, progressively, we've seen things to be better. And we are actually trying to plan out cost actions, which are a little -- looking at a conservative revenue pickup. But a lot of those actions, of course, from initiating it to or realizing in the P&L, well there is a lag to it. So we will -- so quarter 2 will be a challenge. Going forward, we hope to kind of look at profitable.

Okay. My second question is...

Mohit, could we please request you to return to the queue, please? There are other participants waiting. The next question is from Rushabh Seth.

Just a quick question, and I just want to fact check one thing. The online newspapers, basically your Livemint, et cetera, are a part of Digicontent, right? They are not a part of HT Media anymore?

The website is a part of the digital content. And therefore, the e-paper gets offered on the -- on that portal, you're right.

So all the websites, not just Livemint, but HT, Hindustan Times, et cetera, everything?

That's right.

And second thing is there's a structural thing on the cost. If you look at the P&L, not just for first quarter, but for FY '20, on a consolidated basis, almost 45% of the cost is other expense and half of it, about 20% to 23% is employee. I mean in a structurally-challenged industry, how quickly can you realign the cost structure to, kind of, be profitable in a -- clearly, ad volumes are not going to go back to the previous levels. So do you think, just a follow-up to the last speaker's question, that the newspaper industry can become profitable at some point of time? Forget the next quarter, I'm not asking for the next quarter.

So Rushabh, I think Hindi, yes, English will still face a little bit of challenge. So there will be sharper cost corrections on the English side than on the Hindi side. While I hear your point on the salaries and other expenses, we are also uniquely positioned as a industry, as -- because not too many people can correct their cost, direct cost, in such a manner that, at least, a lot of these revenue footfall could. So there is pluses and minuses across industries, and I think one, kind of, offsets the other. But yes, Hindi, definitely, we expect to, kind of, turn profitable in sooner. English, also, once the -- like I said, we are looking at much sharper cost corrections there. And the -- it also enjoys richer pricing. So if things come back to normal, we should look okay. Otherwise, there'll be even more actions on costs. That's what we are...

And just one last thing. I think one of the earlier speakers has alluded to it. Why don't you look at -- I mean, we have such a wealth of news flow coming, why don't you look at kind of -- some kind of a tie-up with some kind of either social media or electronic platform, to be able to leverage the news content that we generate? I mean content is your extremely strong forte. Why don't you kind of leverage that by tying up with some of these electronic platforms to kind of get some more money out of it because, maybe, newspapers might not really make you that much money anyway going forward?

So we are exploring all options, Rushabh. But a lot of those people who provide content free, it's all free. They are not making any money actually. So actually, the only category which is making money out of selling news is newspaper. So yes, so there is -- so we did what we -- like, for us, the first focus in this environment was to ensure that we retain our primary customer, which are the readers because that was critical because if we have the readers, the advertisers will follow. And we did all kinds of arrangements to make sure that we continue to remain relevant to the readers. But those options that you mentioned, things which we could do and which we will explore, for sure, yes.

The next question is from [ Dharmesh Sangoi ].

I basically have 2 questions. One is on the cost front. On the staff cost and other expenses, how much of this cost is going to be -- the reduction is going to be sustainable? And number two, on HMVL, we are seeing there is an increase in staff cost. Can you throw some light on that?

So actually, most of the action that we have done on staff cost, which is pursuant to COVID, will all actually start reflecting only from quarter 2. Because given the fact that lockdown extended, a lot of those actions happened towards the end of quarter 1 only. So the cost rationalization measures, pretty much most of it on this -- on the employee side, most -- none of it is showing up in Q1, it will all be showing up from Q2 only. So that's the first reason. And just on that, on HMVL actually, we are gearing up for a lot of organic initiatives in HMVL on Print as well as on non-print side, because of which we had, kind of, in quarter 4, before COVID hit us, kind of, amped the manning and the capability skills in HMVL. And all that you are seeing in Q1 is actually the normalization of it because those -- that happened over the period of quarter 4, and Q1 has a full impact. So if you see sequentially, there's hardly any change. And last year, in quarter 1 of HMVL, there were some onetime reversals also. So that cost itself was not a normal range for HMVL. So those are the results. So for all the cost rationalization, the benefits will start kicking in from quarter 2 on the employee cost side.

Okay. And one more question. On Hindi, you said your circulation is roughly around 80% range. What is the English level currently?

We mentioned that English also is -- English is down 85%, but that has got a little bit of pricing impact. Also the copy situation is not so down.

The next question is from Sidhant Mattha.

Yes. So first of all, I wanted to know your other income. What are the constituents -- like, what are the things which come in other income? Because your other income has -- like has grown in Y-o-Y terms and Q-on-Q terms, in both HMV and HTML. So wanted to know what are the constituents or what...

It's mainly treasury income. That's the largest component sitting there. And we've had fantastic returns this quarter on treasury income, which is what, in the opening remarks as well as in the Chairperson message also, we alluded to that.

So is this sustainable? So like how do we...

It is not fully sustainable. This is a function of a lot of costs because we don't do short-term calls on treasury. We are -- these are a function of the costs that were taken 1 year, 1.5 years basis where we, kind of, believe the yield curve, et cetera, would be. But consequent to the COVID situation, some of those assumptions came -- happened on a little accelerated pace. So yes, it is not sustainable to that extent. There will be some level of evening out. But the whole of last year, also, treasury did fairly handsome returns on a full year basis as well and we hope to continue that for this year. But this level won't be sustainable.

And second question, I wanted to know was regarding the previous answer that you gave was that 85% decline in English circulation. Is that currently -- it's the current one or it was for the...

It's the average for the quarter, and that's the revenue decline.

I want to know the -- currently what's the status because as Mumbai and Delhi and other, your markets are opening up, what is the current situation in English? Any number...

It is significantly better. We are now...

Any number you can give us?

I mean it's similar to the -- we are closer to a 40%, 45% kind of range.

For both?

Sorry, English, put together. I don't want to go get you -- give you by markets now.

The next question is from [ Puneet Jain ].

Hello?

Yes. You're audible to me.

Yes. So my question is on real estate portfolio. So what is the current book value of that portfolio? And if there is any [indiscernible] of value of that portfolio? And which is the entity that is holding that portfolio? And what are our future plans regarding that portfolio?

So I missed the second question, so -- but I can answer the ones I got and then you can come back to me on what is the question that we had. We, at a consol level, hold about INR 480 crore, kind of, property and of which about INR 50 crores, INR 60 crores is with HMVL at this point of time. We are constantly doing exits. And even in this situation, actually, we've -- so some portion we may use for captive consumption, if at all there is an economic benefit on that. But we are also exiting as and when we can. So this number is -- there's always an addition every year, and then there are exits during the year. And even in this quarter, we've done some exits. In terms of, at least, entering into the arrangement, the finalization is still pending.

We'll move on to the next question. The next question is from Rukun Tarachandani.

Anna, you mentioned that June was about 50%, 55%, lower on [ ad ] revenues and on what [Technical Difficulty]. So can you just give some color on that as to what is driving this improvement? I -- what [Technical Difficulty] that are coming back and how different is the pricing currently versus where it was, let's say, pre-COVID? Give us some sense on that.

So there was a lot of disturbance. What I -- but I will -- what I understood is you're asking me what is giving rise to the improvement on the month-on-month basis is what, one, and second question was on the pricing. Am I correct?

Yes.

Okay. So it's just a function of new advertisers coming into the market. So if you've been looking at the papers, you can see that there's a lot of a auto categories who've kind of now come in, who has now started advertising, so that has come in as a category. So various categories earlier -- for a long -- for earlier months, it was only education, and BFSI were advertising. Now more categories have started advertising. And it's really a function of the fact that everybody now needs to make up for the lost time and slowly each of those categories are coming back. So that's the reason for the improvement. So we are seeing more advertisers coming into the market. And therefore, that is there. To be -- on pricing, we are obviously not in a situation to comment on the vested pricing. Having said that, English will see some improvement in pricing because there's a lot of -- there's a mixed change from supplements to the main book, so that itself has kind of improved the pricing a little bit. But overall, on an overall basis, pricing will be down a little bit.

The next question is from Vaibhav Badjatya.

Just wanted to understand this increase in employee cost, I understand that going forward, there will be reduction. But the increase in employee cost that we have seen in last 2 quarters, particularly in HMVL. I was under the impression that when we did restructuring and hived off Digicontent, under our contract with Digicontent, it must -- we have actually shifted employees there, and we had a percentage revenue sharing with Digicontent. So in that context, I'm not able to understand why the employee costs should go up sharply in HMVL, if you can give...

So the Digicontent happened about a year, 2 year back. So therefore, it's not a comparable number that you're looking at. That cost is already in the -- saving is already in the base. That's first. Second thing, as I've mentioned, that in terms of -- in Print itself, HMVL is where we have been building capabilities because that is where we are seeing growth opportunities to continue to be there in the -- largely there in the Print business. And therefore, we've been investing behind HMVL on organic expansion on the Print side itself. That apart, we are also planning certain initiatives in over and above Print also, through HMVL, for which we had built up capabilities over the last 2 quarters, pre-COVID. Obviously, nobody anticipated COVID or the resultant issues, thereafter. And what you now see is just a -- because those hirings happened at various points of time, a normalized impact of that. But in quarter 1, we've taken a lot of actions to kind of rationalize and look at productivity in a lot of areas. And the benefit of that, you will start seeing from Q2.

[Operator Instructions] The next question is from Pavneet Singh Keer.

Yes. Am I audible now?

Yes.

Yes. My question is regarding the Radio segment as well as the Digital segment. Specifically, regarding the Radio segment, there were talks that the industry associations have represented their case for waiver or discounting of the license fee for the ensuing period. Is there any promise being made on that front by the MoIB? Or like are they contemplating anything on that front? And secondly, is regarding the outlook on the digital as well as the radio sector per se, how do you see it coming back on track, since now, like vehicular traffic is back on roads, and you can see as many cars pre-COVID, especially in the metropolitan region? So what's your outlook on that?

So I'll address your second question first. Actually, there was a hypothesis towards the initial part of the quarter that the lack of traffic on the roads would have impacted listenership. But I think there's various industry publication that came out, including from independent authorities as well as from various participants, including our competitors, et cetera, which actually shows that listenership in radio has not dropped. It's just people are consuming radio. The challenge really that the Radio segment is having is on account of the fact that their customers have been -- are a lot more Retail as opposed to the Corporate segment vis-à-vis Print and a lot of them are more in the MSME space. And that's a space which had got significantly impacted more than the bigger players in the market during these times. And that's the real challenge that Radio is having from a customer point of view and not so much linked to listenership because that's not been a problem. On your first point, yes, there are representations which are made to the ministry to look at because as, we alluded to during our presentation also, Radio does have a significant component, which is statutory in nature. And therefore, the industry has approached the ministry to, kind of, consider some concession on that. But we are yet to hear back from the ministry on this.

Is there any likelihood, like, how promising does it seem to you, whether they will be giving you an answer on that or like giving you some concession on that front? And regarding the very second question, which I -- which you answered first, my main contention is like despite having high listenership, is the advertising seemingly back on track? Or will it take time? Or what kind of activities are you doing so that the advertisers, they are like back again in the stream, which they were out just because of COVID?

So like I said, we believe it will be impacted because the customers are impacted, but we are seeing various -- like I said, it's not just about us doing, it's a lot about what each of those segments are doing to bring back their business and -- back on track, et cetera. So like -- so there are a lot of things which are coming back, which we are also working with our customers to see what's the best. But stuff like IPL now having been fixed and being scheduled and there being time line for it will definitely help. It is one of -- it is a major event on Radio. And those things will help. So yes, Radio will be a little slower given the fact that -- but we are looking at a lot of initiatives on radio to try and compact that, including arrangements with larger clients and agencies and all of those. Now on your government question, it's never done till it's done. So we will continue to be hopeful till such time we are told otherwise.

Any budget commitments from the clients? You've been telling that you're doing a lot of activity for generating the business. But any budgets have been discussed with you? Any outlay had been shared with you?

Of course, we have all of those discussions. And I'm assuming you are alluding to arrangements. So we've also have our share of arrangements and discussions that are happening.

So we should start seeing that flowing in a couple of months or, maybe, ensuing period, right?

We should. But like I said, it is slow. So we -- and Radio will take a little more time and it's a -- than Print, and that is what we have seen in the initial quarter also.

I wish you all the best that perhaps a doomsday scenario has been created now. So everything will probably look much, much higher than in the expected period, no?

That is the hope that we've seen, the worst is behind us.

The next question is from [ Swaminathan Ramani ].

Given that -- I'm an, my -- I'm an investor in HMVL. So this question is only from the point of view of HMVL. Given that HMVL has something like INR 1,000 crores cash, and -- which is more than 2x its market capitalization, are there any plans for buyback or other way of returning cash to the investors?

At this point of time, no. We don't have any change in our plans with regard to that. We are looking at more organic expansion at this point of time, into new areas of business.

Okay. One follow-on question is, as of the end of June, what was the run rate for Hindi in terms of advertising and maybe -- I'm not asking about current quarter.

Yes, I know. But the earlier gentleman was also asking specifically for Hindi. So the number I mentioned for June was for Hindi only.

The next question is from Ayaz Motiwala.

I'd like to draw the attention back on Digicontent. A question was already asked on it. And you said this was a couple of years back, which was where the 2 companies separated this into a separate structure, where all the employees and news reporters and media creation was going to be housed there, right? And you said this was earlier and then the costs have caught on, et cetera. Can you please articulate in the last 2 years, what had been the benefits that have happened? Because as I see the numbers, I can't reconcile that.

No. So it's -- there's a slight difference. That answer was specific to employee cost because the gentleman alluded to savings in employee costs that have happened on account of that, which is true. And therefore, I was saying that the base was not comparable to that event. But we have significantly saved in other expenses also because we've also...

Can you call out some of those, please? Can you call out what was the base then? And what is it now? Because I don't see the -- I mean I have different numbers.

So I won't be able to because it pertains to '18, '19. So we'll take it offline on the numbers per se, but I was explaining to you that the other expenses line has seen a significant drop in the current quarter, which you can see from the results. And a significant portion of that is also linked to the drop in content sourcing fees, which, of course, is on account of the arrangement.

Right. And as again, this is a question, which is beyond this quarter, so you will have the discretion to probably not, sort of, answer that. But the original idea was to do this and then you had kept a stake in the company. Then the stake was sold, as we note, right? In the case of Digicontent, it was below 50%, 49% or something of that sort for HMVL, and so -- in the case of HT Media. And how do we, as shareholders, sort of, be confident that the terms of the agreement are not being altered for content costs going up? Because the costs of media or the employee costs going up in these 2 quarters, in the COVID times, when companies are cutting costs, does raise this question.

Mr. Motiwala, let me, first and foremost, again, mention that employee cost has nothing to do with digital content [ rupees ]. Everything sits in the other expenses line. So that's the first -- there's nothing...

Actually, I'm sorry, I'm interrupting here. But I would say, if we -- if I were to recall from memory, the key rationale of a document file, one of the key highlights of the Digicontent deal was the leverage on employee cost.

And therefore, the new -- the Digicontent content sourcing fee costs do not sit in employee cost. That's the point I was speaking. The content sourcing fee costs sits only in other expenses, is the point I was making. And of course there had been...

No, sorry. So this is well explained by you. I'm sorry, I'm interrupting. But then if you look at it in conjunction, I take your point. It's a great point, that now the cost is in the form of content sourcing, as you rightly point out. And earlier, all the employee costs were sitting in HMVL, which went out, is what we are saying, right? So then why do the costs continue to remain high, is, I think, the simple question?

Because we are not scaling up for content production. That is the only content production cost, which went out. And the employee costs that you're seeing increasing is not only on content production. It has various capability skills, including the fact that we are looking at organic expansion into new streams of business in HMVL, which is beyond the Print business as well including tech capabilities, including sales capabilities, et cetera. What went out is only content creation capabilities.

The next question is from [ Suman Jain ].

Hello?

Hi. Hi, Suman.

Yes. You're audible.

Am I audible?

Yes, you are. Please go ahead.

Hello?

Yes. Suman, you're audible. You can ask your question. As there is no response, we'll move to the next question. The next question is from [ Mehul Pathak ].

At today's share price, the company's market cap is below INR 300 crores. Enterprise value is between INR 900 crores to INR 1,000 crores. Now if you look at the cash in your books, the value of HMVL, the market is undervaluing the company to such a large extent. Now this question keeps coming up almost in every quarterly call, that what is the management doing to change this perception of the company in the market? You are having fixed assets and property, you said, about INR 500 crores. When I look at the options in front of you, there is such immense possibility of changing the perception. There is simply no trigger from the management side to change the perception. On the other hand, many of your competitors have announced buybacks in the last quarter, while I know you are at 69%, and there could be some scope of announcing a buyback. Is the management, I'm not -- unlike the past, I'm not asking what steps are you planning. But I would like to know at a principal level, or at a philosophical level, are you all keen on changing the perception the company has in the market? And if yes, then by when can we hear something positive from the management, so that the market knows that the management means action.

Sorry, I missed your name? Can I...

[ Mehul Pathak ].

Yes. Mr. Mehul, yes, I -- is the -- the management is doing its best to take actions as they think is appropriate for the company, and we are also doing our best to ensure that there is no miscommunication, and all our plans and intentions are articulated, honestly, to the community, at large. Beyond a point, I cannot control perceptions, but what we will -- what we can commit to is to ensure that we do not give false hopes. We do -- we give information as we are seeing, and we convey our plans and our initiatives to the audience, at large.

No. But now you are sitting on so much of cash, the entire media sector is beaten down to dust. From the company's side, there's nothing, no acquisition plan, no plan to buy somebody out, if other businesses are available so cheap.

So we've demonstrated that we are willing to put money and buy companies, et cetera. And we have done it, and we did a pretty expensive acquisition also, this thing, but circumstances changed on that. And therefore, we are in -- for last 2, 3 years, it's not been an easy environment and circumstances changed on that for us also. So therefore, we have seen that we will, if we feel confident about a particular company or, this thing, that we can put the money. But after that, there have been events which are completely unprecedented in this history, which is -- therefore, we're waiting to see, but we will continue to bet on things, which we feel committed to and confident about.

We'll move on to the next participant. The next question is from Pavneet Singh Keer.

Yes. I missed out on the early part of your discussion. What is the prevailing raw material cost currently? And what are the current -- for the current period circulation numbers in terms of proportion vis-à-vis last year?

So we are -- on raw material, we are at about INR 35,000 per metric ton at a consol level.

And do we expect it to, like, soften a bit more for the next period, next quarter?

Marginally, it will be -- you can expect it to be more or less flat.

Okay. And what about the circulation numbers? Could you please come again with them?

As I mentioned, there's a significant improvement. So we are only about 30 -- overall base is about only 30% down.

30% down vis-à-vis last year?

Yes.

And that is in terms of volume?

Yes.

On pricing, we have seen improvement just because everybody is down. And so everybody is planning to capitalize on the revenue, which is coming in their pockets?

Hindi, we have seen because -- not really because we've taken any price action, but there has been -- because we took price actions over different periods of time last year. The benefit of that is happening in this quarter, the full benefits or some improvement in that. English, there is a little bit of mix issue because there is -- because of which, overall, pricing will look a little lower because subscription copies are more vis-à-vis line comps.

How much is -- the flooding has caused the volume to go down, particularly in the Bihar and Eastern UP region?

So on 1 or 2 days, we've had a problem, but that's not been -- I mean it's been okay. It's not been such a big issue.

So we'll be holding our volumes in the...

Pavneet, may we request you to return to the queue, please. There are other participants waiting.

It's pertaining to the previous question itself, about the volume itself.

Yes. We should see improvement in volume as things improve. Of course, some of those regions are facing some COVID-related issues at this point. Assuming that doesn't get out of control, we should continue to see.

The next question is from [ Suman Jain ].

Yes. Just to do rather than buying back of shares, you are looking for more organic expansions in HMVL, right? So can you please...

That's right.

Provide more details on organic expansion?

Some of those initiatives are under work. So we'll come back to you when there's a little -- when we are a little more comfortable sharing that input at this point of time. That's the precise plans. Yes?

The next question is from Ayaz Motiwala.

Yes. Going back on sort of compensation, in terms of senior management incentives and including Director linkage as a percentage of profits, is there a linkage to sort of overall income, which -- because you have a very fat treasury now, INR 1,100 crores, INR 1,200 crores, and you've done a very good job this quarter, is there sort of a double charging by directors because this income has been already charged by Director incentives in the past?

So see, we have a remuneration committee, which takes into consideration all factors in remunerating all operating managers, including directors, et cetera. And yes, there is a due regard given to operating profits vis-à-vis nonoperating profits and those considerations.

Yes. So you clarified that, right? I mean there is a consideration of that.

Yes. There is a -- it's not like a percentage that is there, but there are -- the operating profit and the delivery of operating profit is seen separately vis-à-vis delivery of treasury in all considerations.

Okay. Excellent. And the second question is, again, a more sort of philosophical sort of question on HMVL, in particular, because it's owned 75% or nearly thereabouts by HT Media, which is that you did a demerger and listing in around 2010. It's been 10 long years, it's collected a lot of cash, and its core content creation is out as of now. It does the marketing and the delivery of the papers. So is this purpose of existing itself now in question? I mean various means, all these buyback, et cetera, has been discussed, gestating businesses have been discussed. Had this been in other parts of the world, it would not be this kind of long sort of posturing on the part of the parent company. I mean if they want to -- they have INR 800 crores, INR 900 crores of debt on the balance sheet. So what is the rational of this company now being listed?

So the company, it's a lot of these cash that the HMVL has, kind of, accumulated, has been over the last 3, 4 years, given the fact that we used the listing and the funds raised in the right manner to kind of build the vernacular business that didn't exist. And that is really on overall portfolio and for the -- in the business, we are doing well in that. We are, as I mentioned, it's been -- it's -- Hindi itself had offered enough opportunities to kind of organically expand there. And we are now further looking at other areas for HMVL as well. And therefore, as with any company, we will run it as efficiently as is possible. And yes, so that's the plan for HMVL.

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

Thank you, everybody, for attending our conference call. It has been a challenging environment for the business and for all people and for all of you as well, I'm sure. And the hope is that we will soon see a much better environment and everybody continues to remain safe and healthy. So all the very best, and we look forward to interacting with you in quarter to come. Thank you.