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 2 financial year 2025-'26 earnings webinar. [Operator Instructions] I now hand over to Ms. Anna Abraham, HT Media Group's Deputy CFO, Chief Financial Officer, HMVL and Head of Investor Relations. Thank you, and over to you, Anna.

Thank you, Aaditya. Good evening, everyone. Welcome 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 was released earlier this evening. We would 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 sections 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. This slide features the comments from our Chairperson on the company's performance on the concluded fiscal quarter, "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 cost, translate 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 [ years ]. 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 experience. Your continued confidence in our vision is fundamental to our progress. We remain unwavering in our commitment to inform, educate and entertain a large and diverse audience." Slide 4 gives the agenda for the day. We will start with a discussion of the consolidated performance, followed by assessment advised performance, after which we will open the floor for question and answer. With this, I hand over the call to Mr. Piyush Gupta, CFO.

Thanks, Anna. 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 that 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. 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 at 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 by 500 basis points. Sequentially, again, the growth is at 9% over the immediately preceding quarter. If you break down the freight 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's a marginal decline of 15%. But sequentially, there's 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 you 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, 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's a growth of 4%. On an operating EBITDA, it was a negative INR 4 crores. And versus the immediately preceding quarter, there's a growth of 43%. A quick look at digital. Just to remind, this is not the digital business. This is the OTT play 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.

[Operator Instructions] The first question is from the line of Mr. Ranga Prasad. Mr. Prasad, you will have to unmute yourself, yes.

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 these losses 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 the digital losses increasing to INR 30 crores from INR 21.7 crores. Could you please throw some light as to -- 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 result of the impairment. This is linked to the investments that is held in 3 entities actually. The 2 are radio entities of NextRadio Limited and Next Mediaworks Limited. And the third is on account of our investment in Mosaic Digital business. So those are the 3 impairments which has happened. Linked to certain -- in the past, NextRadio Limited for the operational requirements of Next Mediaworks Limited had done some -- lend some money. Now in consequent to the operations being at what it is, there is -- it was evaluated that the money could not be returned. And therefore, there is an 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 the...

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 stand-alone 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, 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, that's it.

Yes, coming to the second part. Yes, there's 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 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 burn 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 loss.

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 very much for your good wishes. We are at it. What I can assure you of and this is primarily OTT play 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.

The next call is from the line of Mr. Yash R.

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 quite 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...

Okay.

So Yash, there is -- to add on to what Piyush said, there is growth in copies, both Y-o-Y and sequentially. However, there are certain pricing. 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 language as well.

That is correct.

And what will be the percentage particularly in English...

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

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

It is competitively sensitive.

Yash...

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, all -- mostly all commercial categories are fired. There has been -- 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.

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

Yes.

That would be on account of...

So we have a certain variable component to all salaries. Every -- and as the -- when subsequent to the variable component 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. So the quarter 1 had some reversals, and that's the reasons, right?

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, 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...

Okay. So there's a -- okay, reversal in quarter 2, not in quarter 1.

Yes.

Okay. And what are the rates...

Participants, may we request you to please back in queue for any follow-up. The next question is from the line of [ Mehul Parikh ].

Can you hear me?

We can hear you.

So I had 2 questions. One is that are we actually seeing a significant reduction in per subscriber acquisition for the digital business, OTT play specifically? Because are we seeing a substantial reduction compared to the past few quarters? Or is it like a similar?

Sorry, Mehul, can you repeat your question? The substantial reduction came through, but not clear what the reduction here.

The per subscriber acquisition cost that we are spending to acquire OTT play customer, are we seeing a significant reduction there? Or is it similar levels like the past quarters?

Yes, Mehul, so let me take that. I think month of September, we have seen a significant reduction in the acquisition cost, CAC as it is called. Now whether it is structural, time will tell. But the good news is that we are now having -- we are adding more subscribers and some of them are sticky subscribers. So the renewal rates are also good. So once you have a sizable base and you don't have to spend acquisition cost, then the economics absolutely work in your favor. So the simple answer is, yes, we saw a reduction in September on acquisition cost, and we got a lot of subscribers and the renewal rates are good. Now in the next quarter, we'll validate whether this is sustaining itself or there are some.

Okay. Great. And regarding the Hindi Print revenue, is this quarter's profitability up because of the festival and the Bihar elections? Or is it a structural trend?

Well, tough to say, but definitely, those 2 things are playing a role here. The Bihar elections will definitely play a role. And now that the Bihar elections, when you'll see the results of the next quarter when the code of conduct has come into being, it will play a negative role also. But I think some part of this is structural, but we will have to see as we go into the next quarter. Right now, I mean, our best estimate is half and half.

The next question is from the line of [ Mehul Pathak ].

Congratulations on a fairly good set of numbers for the last quarter.

Thank you, Mehul. Thank you. Appreciate it.

I have 2 questions. The first is Digicontent reported a higher other expenses by 40%, HMVL by about 15%, 16%. Now when I look at all the numbers, these 2 are the numbers that hit your eye in terms of what has impacted the performance of those businesses. Now the notes that are given at the end of the results are not showing what are these other expenses and why they are higher. While from a regulatory perspective, you need not perhaps put it as part of the notes of account. I would suggest that in terms of transparency and fairness, businesses should proactively give some statement on why these numbers are higher.

Yes. So Mehul, let me try to take that. So first of all, I won't be answering the question on Digicontent because this is the HT Media Group and Digicontent is not consolidated into HT Media financials. Now coming on to the HMVL and other expenses, as we've been discussing on the prior calls, and I think with one of the earlier callers, I discussed the OTT play, most of the expenses, which are coming slightly higher are consequent to our investment in OTT play. As I was just saying, the readings on OTT play subscription base, the renewal rates and the CACs, et cetera, for September have been very good, exceptionally good, I would say. So some of these expenses are getting consolidated into those lines. But generally, these are OTT play expenses, which are getting consolidated. And though we are not required by law to put it into the notes to accounts, but you would appreciate that we've been religiously doing the earnings call and giving all the clarity and hence, we are here. So whatever other questions, we'll be absolutely happy to foot the same.

So OTT is getting expensed in both HT Media as well as HMVL?

Yes. Yes, Mehul. OTT is a division of Hindustan Media Ventures Limited. And since Hindustan Media Ventures Limited is 75% owned by HT Media, it will get consolidated in HT Media as well.

So it is entirely therefore, in HMVL only?

Well, I wouldn't say entirely, of course, the bulk of the part is coming from OTT play. There will be other reasons. I gave you the bulk of the reason.

Ask is for the increase in cost in Hindustan Media Ventures Limited. That's the INR 15 crore increase.

Yes. But Hindustan Media Ventures is consolidated into HT Media.

My Second question is that when I look at all the 3 companies, though you specifically say Digicontent is not part of this discussion, but all 3 companies, there is no mutual fund holding at all for many years now. Now do you get approached by mutual fund investors or AUMs? And what do they seek from us? And is there any intent on the part of the management to be part of mutual fund portfolios? You see AUMs are growing, SIPs are growing, but our company is not part of that party at all. Some thoughts from you on this?

Well, I can only conjecture because I wouldn't like to comment on the investment thesis of various investment platforms, including mutual funds and AIFs and various other investors. But 2 or 3 things which I know for a fact One, as far as a traditional media is concerned, I don't think it's finding the same place that it was, let's say, about 5, 7 years ago. So that might be one of the reasons. We are not talking about any sectoral funds here, which are dedicated to legacy media and stuff like that. But on the market, why are investors not investing, I'd not like to hazard a guess. I can tell you for a fact, we are happy to engage with any investors. We actually have been engaging with a lot of investors on a periodic basis. And we'll absolutely love to have some of these fund houses through their various schemes, invest in our stocks. But why they are not investing, I can't with credibility, answer that. Would we love...

In that case, Piyush, why are we not approaching them as to what do they want from us?

We approach them. See, what did I just say? We do engage with them on a periodic basis, and we approach them. Now what are their options? What is their investment thesis, I'd not hazard a guess. I mean we can conjecture, but I would like to hazard a guess on that part.

We ask them and what they want from us so that we get listed with them.

What makes you believe we don't? I mean, we engaged with them last quarter. We will...

Then I'm interested in knowing what are they telling you? And what are you doing? And how are you working on their feedback?

Mehul, I don't think this call...

Yes. So I think we can take that offline. This is about discussing the earnings and the stock price performance, Mehul, I won't be able to comment too much here.

So it has to do with earnings only, Piyush. Anyway, it's okay.

Maybe it is. But what I'm only saying is if it's earning, we are already speaking to them about the earnings. Now it's up to them whether they like that or not.

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

So I had this question, which I couldn't ask the last time. What about the newsprint prices? What do we anticipate to be in the coming quarters?

Well, Yash, though we don't give a forward guidance, but let me tell you this, at this point in time, on the commodity cycle of newsprint prices, I think we are in the lowest quartile, what we have seen because this is a cyclical commodity, as you know, which is not traded on any commodity exchange. But the prices that we are seeing, and I'm talking about the dollar prices, which effectively are the base for the rupee prices for domestic inventory are on their lower side. What I know for a fact is RISI's estimate, RISI, which publishes the forward-looking estimate is saying -- is talking about slightly rising prices, but not sharply, but very gradually. But at this point in time, we are discussing with various suppliers in terms of the forward buying that we have to do. But right now, we have sufficient inventory, but the trend is that we have bottomed out on the low end of the prices, but we'll see as we go forward.

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 website. I now hand over to Piyush for closing remarks.

Thank you, friends, for making the time to join our earnings call. I really appreciate that. As you can see, we've got a good set of numbers. We will always strive to bring in the best performance and the best numbers. At this point in time, what looks like that we will be able to repeat the performance and look forward to seeing you in the next quarter's call. With that, thank you so much, and have a great day.