HT Media Limited (HTMEDIA.NS) 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 1 Financial Year '25-'26 Earnings Webinar. [Operator Instructions] After we are through with the presentation, there will be an opportunity for you to ask questions. I now hand over to Ms. Anna Abraham, CFO, Hindustan Media Ventures Limited and Head of Investor Relations, HT Media Group. Thank you, and over to you, Anna.

Thank you, Aaditya. Good evening, everyone. On behalf of HT Media Group, I would like to extend a warm welcome to our earnings webinar for the first quarter of financial year '25-'26. Joining me on today's call are Mr. Piyush Gupta, Group CFO; Mr. Pervez Bajan, Head Financial Controllership and Taxation and members of the Investor Relations team. We hope you've had an opportunity to review the financial results of Hindustan Media Ventures Limited, it was announced yesterday as well as those of HT Media Limited released earlier this afternoon. Please note that our discussion today will follow the presentation slides. This presentation, along with the financial statements, are available on the stock exchanges and in the Investor Relations section of our respective websites. Coming on to Slide 2. As per our usual practice, we would not be providing any specific guidance on revenue or earnings projections. So kindly, keep in mind the disclaimer that is on the slide regarding forward-looking statements. This slide features comments from our Chairperson on the company's performance on the concluded fiscal quarter report. "Building up from a successfully concluded last fiscal year, the first quarter in the current fiscal has also begun on a strong note, with both operating revenue and profitability showing growth as compared to the previous year. The Print business has seen strong growth in advertising revenue, reflecting our leading market presence and the continued relevance of Print as an effective medium. Our targeted efforts to grow circulation have delivered steady, sequential gains, further enhancing our reach. Growth in our Radio business has been tepid, with the larger industry still facing challenges; however, we are pivoting the business with a renewed focus on growing non-free commercial time revenue. Meanwhile, our Digital businesses continue to show steady momentum, with our platforms, Mosaic, Shine and OTTplay driving growth through differentiated, future-ready offerings. We are working towards accelerating growth of our Digital business, while deepening the impact of our Print offerings and reimagining the Radio business with experiential and integrated formats. As always, your trust powers our journey. With a relentless focus on quality journalism and immersive entertainment, we are creating richer, more relevant experiences for our diverse and evolving audiences." This is the agenda, that will be covering here in the call today. We will first cover the consolidated financial results followed by a detail overview of our Print, Radio and Digital businesses. After the presentation, we will open the floor for a Q&A session. With that, I now hand over the call to the CFO.

Thank you, Anna. Good afternoon, everyone, and thank you for joining Q1 FY '26 Earnings Call. We will just track the presentation on the screens. So the first chart is for consolidated financial summary. As you can see, in the first quarter, FY '26, our total revenues have grown by 6% on a Y-o-Y basis at INR 451 crores, and PAT is a negative INR 11 crores, which is an improvement of 59%. On a sequential basis, the revenue is at minus 23%, with PAT at minus 120%. Net cash remains very healthy at close to INR 1,000 crores. Turning on to the business unit performance and deep diving right way into Print, we can see improvement in Print operating revenues as compared to the last year. This is led by a significant growth in advertising revenues. Circulation showing sequential improvements as well. So our ad revenues have come to INR 255 crores, which is a 17% improvement and a total operating revenue at INR 324 crores, which is a 8% improvement. Going to the English segmentation. And our advertisement revenue has -- which has come at INR 140 crores, is a 19% growth, so very healthy growth on a Y-o-Y basis. On a quarterly basis, however it's a decline of 12%. Circulation revenue, however has been little tepid because our impetus at recruiting more copies and more dealers is down by 22% on a quarterly basis, it's flat. Coming on to the Hindi business. Our growth is 14% with ad revenues coming at INR 116 crores on a quarterly basis, it's a decline of 9% at INR 116 crores. Circulation revenue on a Y-o-Y basis are at INR 39 crores, which is flat versus last year. Radio, as highlighted earlier, Radio has been under a bit of pressure, so segment revenues saw a dip, compare to the prior quarter due to high base effect from the big events which we conducted earlier this year, but on Y-o-Y basis, our revenue came at INR 31 crores, as against INR 36 crores last year, with a margin at negative 21%. Digital, you can see the segment revenues rose Y-o-Y as most digital properties, including OTTplay continued to gain traction. And profitability improvement owing to broad-based revenue expansion along with business investment rationalization. As a consequence, our operating revenues are at INR 56 crores which is a growth of 21% and operating margins are at a negative 38%. With that, we come to the end of our presentation, I hand it back to Anna.

Thank you Piyush. [Operator Instructions] The next question is from the line of Gaurav Agarwal.

Piyush, Anna. I'm a private investor. So basically, my question is regarding your one of the group companies, Digicontent. I believe there you have -- you all have diluted a large part of the equity as a RSUs. So just wanted to know what's the impact on the P&L because it's almost like 9.5% equity dilution. So I believe even in the financial, you all should have separately adjusted or shown some details, what's the impact on the P&L is.

We have no separate -- it is part of our employee cost in the P&L.

Yes. so in the last quarterly numbers, what's the impact? Can you tell me...

Last quarterly number, there's hardly can make that, whereas the RSUs were issued only in the last month.

Also Gaurav, this is Piyush this side. So Gaurav, all the costs have been charged in the salary and business account, and it's not a 9% dilution, I don't know how you calculated that. But the accounting has been conducted as per Ind AS and it's not 9% dilution, it's all employees on RSUs, which have been given to the employees.

And which will be disclosed in the annual report as and when it comes up.

But Piyush, it's 9.5%. Earlier, you all had 29 lakh shares, RSUs, which you guys increased it to 56 lakhs, so it's like 10% of the Digicontent equity.

I think we showed it yet there's a right for this thing and it is a benchmark to certain milestones also, so apparently that [indiscernible]

I couldn't get you. Can you come again, please?

Right at this point in time, the shares have not been issued as yet. So when the shares get issued, then we will have some level of guidance. But at this point of time, there is not.

But if you find out the list of the entire BSE 500 list of companies, there would be very few who would have done such large. These all things happen in the private equity unlisted stocks, founder allotments happened. So how come all of a sudden right from 2% then 5% now, it's 9.5%. That's a very...

Gaurav, exactly the point that I'm trying to make, first of all, it's not 9.5%, it's much less that has been given us the right for the trust to buy and hand over the ESOP to the employees. It's not a 9.5%. That's the approval which has been taken for future handing out, but it will not be 9%. If you want, we can separately engage, and you can drop a mail to the Investor Relations section, and we will give you exact...

And just closing on that conversation we, also -- the Digital business is a new age business from that perspective. We are investing more and more in that digital business. So therefore it is listed, but there is a growth potential similar to [indiscernible]

So are there any specific employees like I believe you guys have been...

I tell you what because we don't -- this call is for the HT Media Group and DCL really doesn't fall into that. Why don't you sell your specific queries on the Investor Relations and we will answer your query there?

Nobody bothers to respond on e-mails neither calls, Manu is not available, the number which is there. That number is -- seems to be out of -- working. It's not working. So how do we guys can contact.

Gaurav, we receive a lot of emails on a very regular basis, just drop an email...

But somebody should pick up the call. Nobody is picking up the call also.

Gaurav would you be kind enough to put in an email.

I will do that Piyush, if you give me your e-mail idea. I'll put directly to you.

My email id is very simple, it's [email protected]. Why don't you write the mail to me.

Yes, I'll do that.

[Operator Instructions] The next question is from the line of [ Yash R ].

Could you please let us know the verticals that have helped to achieve the growth in the Print segment, particularly the English part, HT. I know I can read in the comments that there has been a higher government revenue versus last year. So first of all, I mean, we must have been having a good amount of revenue this year. Is it normalized? Or is there any exceptional revenue that you received? And what are the other...

Yes. If I may take it up see last year same quarter, if you remember, we had the national elections, so there was a Code of Conduct, which was in play because of which government revenue was substantially lower. So therefore, this year, there is no such restrictions, so government spending has been neutral and therefore that will -- of course, last year, therefore in quarter 1, the results this year is getting the upside, But apart the government revenue, commercial revenue will also has fired for us.

So which sectors have contributed the most to apart from...

It's a big segment for quarter 1. So that would be one of the segments, which is fired. So as -- I mean across English and Hindi, it would be education -- among the top 5 segments, 2, 3 of them have been firing.

Sorry, I didn't get any of the verticals or the segments...

The segment is education.

Education is one that has performed well, right?

Yes.

And?

And real estate, and BFSI, and a few others.

BFSI. Okay. And what percentage of contribution is by education to the overall...

We wouldn't be able to disclose it. Education is a pretty sizable advertiser in the quarter 1 [indiscernible]

Okay. And growth percentage if you can just let us know, government and education.

We don't get split by segment.

Well, Yash, let me try to give you a context. I mean the education, the first quarter is a big segment, which is in the top 5 to 7 segments that we have, published the advertising comes in the English newspaper because the portion is specifically to English. The growth has been reasonably good on the commercial side, but we wouldn't like to give a exact number because it's a competitive number, we don't want to share but that's one that sector which has fired.

Okay. And what about on the circulation front? What are the copies? Are we stagnant? Are we growing? Or as those -- have those numbers gone down? Because in the investor presentation, I can see that the discounting is still continuing, right?

Hold on before Anna comments. Well, discounting as I have highlighted earlier, we are currently recruiting a lot new readers on the Hindustan side, right? So all the discounting, which has happened is primarily happening there, which is a short-term trend, but Anna can give the exact specific. Anna, would you like to add.

Yes. So in the English segment, whatever the declines have you seen is largely on account of pricing only copies, as you can see sequentially also we are flat. So there's no change in copies. In the Hindi business, we are actually growing in copies via-a-vis last year. Sequential numbers remain pretty much the same.

Sorry, on the English front, I can see a drop of 22% in the revenue. That is on account of?

As I also mentioned in the Investor Day.

No. I mean, so it's lower realization per copy. I'm not able to make a sense of it as to what it means.

That means the pricing to the customer is discounted as you were alluding to and therefore, it is the decline in revenue is linked by the pricing and not by copies.

Okay. So copies are the same, but then we are continuing with giving discounts, right, on the cover price. Hello? Hello?

Can you hear us? Hello?

Sorry. Yes.

Can you hear us?

I can now.

So we said, yes, you are absolutely right. We are giving those discounts. And hence, it is staying on the circulation revenue. The copies are pretty positive, but we are -- our endeavor is to recruit more copies and increase the number of copies as we go forward from here on.

So I mean, what is the plan...

[Operator Instructions] The next question is from the line of Deepak Sharma.

This is Deepak. My question is that we have signed a couple of AFE agreements in the last 6 months. And we see an uptick in the revenue. So would you be able to give a segregation between the AFE revenue growth vis-a-vis the normal revenue growth and revenue.

We don't exactly give that number, but suffice to say that AFE revenue is -- has been healthy a substantial part of the overall Print revenue and remains to be seen, but it doesn't have much bearing on the new agreements that we would have signed because all the existing agreements that we have, also have a life of 3 to 5 years. So those agreements are also into play, but AFE revenue is a substantial part of the overall revenue.

The next question is from the line of [ Meera Ruparel ].

Meera Ruparel is not available. She hasn't asked a question.

Sorry, we couldn't hear you.

I'm [ Sharath Ruparel ], her father. Meera Ruparel is not available. She hasn't asked a question neither I have asked a question.

The follow-up question is from the line of Deepak Sharma.

Yes. So follow-up question again. So in my earlier discussion with Aaditya, one on one discussions. We did mention that the AFE declaration happens when we do the conversion of the warrants into equity. So there are standing agreements, which happened prior to that as well. So do we have a split of those, saying that, okay, these are in the pipeline and out of these X number of them, we want to convert the warrants into equity. Do we have some ratios on to that?

Can you just repeat the question? I think I missed the point there, there you're saying, when we convert the warrant into equity, what happens?

So we -- under the LODR declarations we published on the [indiscernible] that these are the AFE agreements which have been converted into equity, the bonds are getting converted to equity. But my decision with Aaditya earlier mentioned that there are -- we keep on scouting for potential partnership opportunities. And keep on shortlisting them? And then out of those, if we find a long-term strategic value, then only we convert into that. So what is the split of those businesses where we said we form a partnership with 100 people and only 30% qualified to go to the next round?

Okay. So let me try to kind of answer your question in a very high level. So we have no specific number here. First of all, you have to understand the reason that we invest through the warrant structure rather than pay equity, is the risk mitigation strategy. So of course, there are a lot of instruments that we are using and not just the warrant but warrant also is a risk-mitigation strategy. We do pay the equity. We do convertible debentures into optionally convertible debentures, we do warrants and so on and so forth. Now the reason that we would convert a warrant into equity if we basically see that, that equity can give us a substantial upside. Now that will happen because this is all the information rights that we have in our invested companies, if we see that a certain company is on a certain track where we believe that there can be a lot of upside, and that is the time that we convert our warrant into equity. As per the contractual document, there's a time period in many years that we have up till which we can exercise this right. And within that time period, we keep on looking at the financial performance of the company and basis that we take. So there is no straight answer as to what percentage of warrants will be converted into equity. But the simple answer is, depending on the conviction that we have on the company's performance and therefore the go-forward perspective of the company, we would exercise that option. Otherwise, we will not.

Sure. Understood. Historically, what would have been the ratio in the past?

Look, historically quite a few of our companies which have gone to the public markets, and we were sitting in warrants. So before the public markets, we did exercise that option. There are quite a few companies which have shown a lot of pressure on both the top line and the bottom line. In that case, we would have done this thing. But I don't have a readymade number for you, but those other decision aid spaces which we look at the information and the information is giving us a green signal, we'll go ahead and explain the option. Otherwise, we will not.

No, absolutely. I was talking to Aaditya earlier and said that MobiKwik was a quick win for us last December itself. So it boosted our numbers as well. My question was more on the misses. What happens if most of the companies don't qualify, what happens? Is there a loss...

Let me flip the question. If MobiKwik was a win, as per our operating thesis at this point in time, whilst we are tracking our investment companies in the next 2 to 3 years, we think there will be many -- where many such opportunities in the invested companies where we will get this opportunity. Now whether the market will reward them very nicely or not, only time will tell. But at this point in time, we see a lot of opportunity over the next 2 or 3 years.

[Operator Instructions] Follow-on question from Yash R.

So the question that I wanted to ask earlier was that how long are we looking to see to continue the discounts on the circulation front?

So at this point in time, I'll just do a long form answer. So as you are aware, post-COVID, most of the copies for most of the publishers came down and now very selectively, depending on which market is showing a promise that there is competitive activity, we are addressing market by market. There's a full impetus we are in Hindi market and also in the English market, Delhi, Bombay and Chandigarh, we are selectively increasing our copies. Now I don't think that this is a [indiscernible] that we are doing across all our Print locations in all our markets, but this is a selective markets where we see that we have to shore up the copies. Now there are 2 routes that we take: one is, as you said price-off; second, is the gifts that we give to our readers. So we keep on checking them on a monthly basis. But at this point in time, the strategy is paying fruits of course, it is a little costly for the RPCs tend to depress in the short term, whereas the benefit comes over the long term. So at this point in time, we are continuing. But suffice to say that we keep on looking at the performance on a monthly basis and take a real-time call on that.

Yash to add, there is a competitive environment on this as well. So there's generally, it also depends on the competitive environment and as to what is the kind of offers [indiscernible]

So we will continue with it for foreseeable future?

I'm saying at least for the next month, we are and we will take a call at the end of next month. And if we think that we should continue. So we are taking 1 month at a time at this point in time. But looks like currently, we are continuing because this will give us fruits in the long term.

Okay. And what about the newsprint prices now?

Newsprint prices are flat for at least the last 2 quarters, and we don't see any reason for them to spike up. I understand there's a lot of anxiety around the geopolitical events. But we believe that the newsprint prices will remain in a very tight band, which is currently give or take $500 a metric ton, and we are currently tracking those prices.

With this, we come to the end of the Q&A session...

Thank you, Aaditya. As you can see, we have clocked a pretty decent growth on the top line. But from a long-term business viability we keep on investing behind our copies, in our Print Businesses, and our other various businesses like OTTplay, we are setting up our target, and we have seen 100% growth on a Y-o-Y basis and we hope to repeat the performance going forward. Our Radio business is undergoing a bit of a tough environment right now, where the pricing is under pressure, but we are doing all the efforts in our hand, during the current situation. Our cash position remains very firm, and our AFE book is only growing, and we hope to get some more footprint in the next 2 or 3 days. With that, we appreciate your time and we look forward to see you in the next quarter. Thank you.