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

Good afternoon, ladies and gentlemen. This is Aaditya Mulani from HT Media Group. I would like to welcome you all to our quarter 3 financial year '25-'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, Investor Relations. Thank you, and over to you, Anna.

Thank you, Aaditya. Good afternoon, everyone. A warm welcome to our earnings webinar for the third quarter of the financial year '25-'26. Joining me on today's call is Head of Financial Controllership and Taxation, Mr. Pervez Bajan; and members of our Investor Relations team. We will start the call with a brief presentation on the results of HT Media and Hindustan Media Ventures Limited, following which we will take any questions that you might have. Before we start, just a quick reminder that we do not give -- provide specific guidance on projections, and there is a disclaimer on any forward-looking statements. Coming to our Chairperson's message on the results for the quarter, and I quote. "The third quarter of the financial year saw the company make consistent operational progress, characterized by stable top line performance and a steady growth in overall profitability. These results reinforce the effectiveness of our ongoing operational initiatives to strengthen our businesses. Our core Print segment continues to demonstrate resilience, posting growth on both an annual and sequential basis. This performance was largely driven by strong growth in advertising, particularly in our English language titles alongside steady circulation revenues. The combination of these gains and a disciplined approach to cost has translated into meaningful growth in profitability. The Radio business continues to navigate a challenging market environment where revenues and margins -- pressure. Performance has remained stable on a sequential basis. The year-on-year revenue contraction is primarily a reflection of the high base effect from the previous year's event-led business. We are proactively recalibrating our business operations within Radio to ensure the segment is better aligned with the current industry. Our Digital business delivered a strong performance during the quarter with revenues rising and margins improving. This trajectory validates our commitment to scaling our digital-first offerings while maintaining a clear path towards profitability. Looking ahead, we remain focused on sustaining the momentum seen this quarter across the business portfolio. By leveraging the enduring strength of our established Print mastheads, recalibrating our Radio offering and further scaling up our new-age digital platforms, we continue to reinforce our commitment to delivering trusted journalism and high-quality content to our diverse audience". This slide covers the agenda for the day. We'll start with a brief overview of the consolidated performance, followed by the business unit performance on Print, Radio and Digital. Coming to the consolidated performance. The revenue was stable on an annual basis and improved sequentially. There has been improvement in margins, and the cash position continues to remain robust. So we reported a total revenue of INR 532 crores, which was flat versus last year and 7% growth sequentially. EBITDA came in at INR 51 crores at a margin of 10%, which saw an EBITDA improvement of 9%. PAT before exceptional is at INR 17 crores with a margin of 3%, and net cash remains robust at INR 945 crores, similar number as was reported last quarter. Coming to business unit performance and starting with Print, and Print-English. Print overall saw positive momentum with sequential gains led by the uptick in ad revenue, coupled with resilient circulation base. There's also a healthy margin expansion seen for this segment. Ad revenue came in at INR 301 crores, which is an 8% growth versus last year, a marginal decline versus the previous year, basically because of festive shift. Otherwise, it's been a healthy revenue numbers for the quarter. Circulation numbers came in at INR 53 crores, which is holding steady. The overall operating revenue, INR 395 crores, which is about 2% growth. Operating EBITDA for the Print business came in at INR 60 crores, which is a 15% margin versus 11% margin it has been previous. Coming to Print-English, advertising revenue on a Y-o-Y basis was almost flat for English-Print. And as I mentioned, this is despite the change in festive days this year versus last year. Last year, all the festive was in quarter 3. This year, it got split between quarter 2 and quarter 3. Despite that, English came with a good advertising revenue number of about INR 179 crores, which is also a sequential growth of 16%. Circulation revenue remained steady on a sequential basis and showed an 8% growth on a Y-o-Y basis. Coming to Print-Hindi. Hindi saw a marginal decline of 4%. Again, this is basically base effect, as the base effects have been strong. And even on a sequential basis, it's kind of flat. Circulation revenue at INR 38 crores is holding steady. Coming to Radio. Radio is seeing a big drop in revenue to INR 34 crores, which is primarily driven by the high base effect from a big event that we had in the base. Sequentially, you can see it's a 5% revenue movement with operating EBITDA holding at about INR 5 crore loss. Digital, there is significant growth on a Y-o-Y basis with operating revenue coming at INR 67 crores and 30% growth. Sequentially also, there is a 9% growth. Losses are -- the segment is reporting losses at INR 23 crores, but margins have significantly improvement, both on a sequential and on a Y-o-Y basis. We are now -- we can now open the floor for questions. Over to you, Aaditya.

Thank you, Anna. We will now begin the Q&A session. [Operator Instructions] The first question is from the line of [ Yash R.]. Please introduce yourself and ask your question.

So I was just trying to make a sense of the numbers, particularly for the Print segment. Okay. So my first question is with regard to the revenue. Now, there seems on a consolidated basis for the Print segment, there has been an uptick in other operating income because circulation and your ad revenues are relatively flat. So what has happened over there for both for English and there seems to be an uptick in HMVL as well?

Yes. We have other operating revenue as there has seen some uptick while the ad revenues and circulation revenues remained flat. This is -- I mean, of course, there's quite a few components of that [indiscernible] and all that, which comes in there. Additionally, there's also a forfeiture that we get from our AFP benefits as well.

Okay. So which has contributed more? Is it the outside work? Or is it the forfeiture, which might be a onetime thing?

Forfeiture tends to be a little bit consistent. Of course, quarter-to-quarter, there could be very -- this thing, but it's a standard -- part of our standard operating arrangement with regard to that particular business. So it tends to be consistent. We've seen marginal upside across lines there.

So -- I'm sorry, I mean, it's still not clear. So what has led to this uptick? Is it more of outside printing? Because I mean, since you're saying that the forfeiture is more or less consistent?

Both outside printing and forfeiture has seen uptick. You have seen that I was reacting to your comments saying that forfeiture has worn back. I said some level tends to happen every -- sometimes it could be a little plus or minus, but it's a consistent...

Okay. Now, coming to the HT-English part, the revenue, I believe, has gone up by around INR 7 crores, but the operating profit has gone up by around INR 17-odd crores. And -- I mean, the savings in DBC, I think, are around hardly any INR 2 crores or INR 3 crores. So what has led to the reduction in cost, which has driven up the profitability of HT-English?

For English, there's pricing growth, and therefore, that automatically improves margins. Newsprint continues to be lower than last year. That also helps in margins. And we've been very tight on our discretionary spends as well.

Overheads is what you're talking about and -- sorry, discretionary spend. So that would be like promotion and all that.

Yes...

Okay. And -- yes, just one last question. The HMVL staff cost, I believe salaries -- salary costs have gone lower as compared to previous year by around INR 3-odd crores. What is the reason behind it, though it is in line with what we are in Q2?

There is -- you are seeing Q3 versus Q3, right? Just give me a minute.

Yes.

There are some incidental -- there is some reversal, which was there with regard to variable payout, that is partially the reason, and some savings in certain other lines of business apart from print, which has come.

Apart from print. Okay. Okay.

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

Can you hear me?

Yes.

Anna, I don't know if Piyush is there or not.

He's not there on the call today.

Okay. Okay. No problem. I have a couple of questions. The first is how are we using AI in all our businesses today? And what is the future impact of AI that we assess in our business? Is it going to be positive? Is it going to be negative? And financially, what will be the impact, if you can share some perspective?

So, Mehul, I might not be the right person to share perspective, but there's -- I will touch on a couple of points as we share because this is a very wide subject and this...

Your voice -- Anna, your voice is jarring a bit. I don't know whether it's my problem or problem at your end.

I believe there is no problem that others are facing. Yes. So it could be at your end, Mehul, because we just got confirmation. Yes.

Okay. Fine.

I said I'll try and touch upon it briefly because it's a very large conversation, and I may not be the most competent person to address it completely, but multiple aspects. Of course, there is a standard element of efficiency, productivity that is applicable to all industries. We are -- on the content side, it can be a tool for our editorial setup, which we are utilizing very strongly. From an impact perspective, we've seen there's a lot of AI being used and that could -- one view is that could also put a high importance on credibility and trustworthiness of the content, which puts us in a good position, and that is the case because in that we are a trusted source of news and content. So that's one perspective that's emerging. There's also a certain regulatory framework that's been proposed by the government, which suggests that partners using AI will have to remunerate the original content providers in some manner, which also seems to be on the positive side. Yes. So from a core newsprint -- I mean, newsprint business, we are seeing it as an enabler, which should help us expand into doing better offerings. Our credibility and trust factor puts us in a good position. And as regulatory environment evolve, we should see a lot more structure around this as well.

Will it lead to massive productivity improvements and cost savings for us?

See, there is an element which every industry will see it, but I think the smarter ones are seeing about how do you kind of make it a revenue opportunity and not just a cost efficiency as with any automation, and there will be some element which comes through as we have seen in past cycles of any major technological change as well. But I think the larger opportunity is to see what can be done on the business and revenue part.

Okay. No, as an investor, I expect that at least the editorial part barely can be done by AI, and massively, the people cost should come down. Anyhow -- but that's not my question. It's just a judgment call that I have.

Yes. That is subjective. It is [indiscernible]. So you have to stand on a differentiated proposition; otherwise, there is nothing. It's like -- we have seen many waves of it. There was a time when aggregation of content was also positioned as a new wave. And post-COVID, we have seen that also go through it's own cycles. So those are very subjective terms.

My second question is -- I think you have -- is my understanding right that entire INR 39.9 crores of gratuity, you have booked in the P&L for quarter 3?

There's an exceptional item of about INR 41.4 crores, which has been booked, and there is a note given in the results also to that extent, which is an impact of the new labor code.

Correct. So now, is it reasonable to expect that this will get adjusted in CTC next year for all the employees? Because at the end of it, the money has to come out from the business only. So is that a reasonable expectation?

So there is -- I think, Mehul, this labor code is a whole subject on its own so difficult to kind of address it over this call. But as you may know, the labor law, what has been done as of now is a true-up of the -- having liability basis the new laws, which is what is the regulation requires us to do. Going forward, whatever is missing is something which we will see how to absorb in the overall cost of the business given -- keeping all perspectives of employees and stakeholders and the company into perspective. So this is an evolving regulation, and all companies are currently grappling with it.

Okay. But our request to the Board is that it should get adjusted next year, so -- otherwise, business is in no position to absorb additionally costs like these.

This is an annual cost. This is an aggregated cost across the years for this thing, so this is nowhere indicative of the future cost increase for any business. That's a very nominal number. These exceptional items have been reported by all the companies out of historical...

Yes, but my expectation is that we...

Sorry to interrupt, but may we request you to please fall back in queue for any follow-up questions.

Yes. Okay.

[Operator Instructions] The next question is from the line of [ Kirit Shah ]. Okay. We'll move on to the next caller. The next question is from the line of [ Yash R. ].

Yes. So my question is with regards to are we seeing an uptick in the pricing compared to previous year? And how has it fared sequentially?

You are talking about ad pricing.

Ad pricing, yes. Yes. Sorry, I wasn't specific.

Yes, both Y-o-Y and sequentially, yes we have.

In the pricing. Okay. And what about the copies? I mean, I see that the revenue -- circulation revenue has gone down versus previous year for Hindi, and I believe that's the same -- that there has been a slight uptick in the English part. So what is the drivers behind it?

It's very marginal that you have seen. In the last year time, there was competitive pressure, and there was, therefore, a lot in certain markets, and therefore, according to publications, there were a few more probably publications, but it did have its impact on pricing. This time, it's now at a more reasonable level. So if you see sequentially, it's holding flat as well. And there is marginal shift. These keep happening as in market to market, there are some attempts to increase copies, et cetera. But overall, no issues, pricing is holding, copies are holding and circulation revenue has been steady.

All right. And what about the newsprint rates? Do we have any update on that? Because there has been news in the market saying that prices are going to increase in the coming quarters, especially given the current geopolitical scenario.

Yes. So we are -- the market is indicating that there could be a potential shift in the newsprint. There's a gradual increase and in that this commodity does -- moves in cycles, and we've been at the bottom of the cycle for some time. Currently, we are still below last year on -- for the quarter as well as on a YTD basis. And I think pretty much next quarter also, we are not expecting any major shift. And we have reasonable cover till the first quarter of next year. Thereafter, we might see some upward move.

So I mean, do we have any plans to mitigate or shift this impact, be it increase in cover prices or probably mitigated by increasing our ad pricing?

So, Yash, as you've been -- like I said, we have many cycles. So everything that happens on that particular cycle, we will attempt to do consistently, including optimizing buying, optimizing mix of newsprint, controlling consumption, et cetera, et cetera. Pricing is -- will be a tougher part when priced in the markets for sure. And ad pricing doesn't -- probably never moved in that part. But everything else that's possible will be done because this industry does see these cycles in a certain periodicity.

We will try Mr. Kirit again, he has raised his hand, and then, move on to the next participant. Mr. Kirit, please unmute yourself and ask your question. We are trying it one more time, Mr. Kirit. You can unmute yourself and ask your question. Okay. Moving on to the next participant. The next question is from the line of [ Shubham Jajodia ]. Please unmute yourself and ask your question.

Am I audible?

Yes, you are.

So last year, in December, there was this deal that Meta did with some news publishers in the U.S. And are we expecting such kind of deals happen here as well? Are you guys have been approached by Meta, any kind of AI companies? Or are you guys seeing it as a viable and material potential revenue source for future? And if that kind of opportunity do arise, do you guys see to negotiate as we're seeing kind of a change in our -- the way traditional platform is evolving in this AI landscape?

Yes. So I did kind of mention in my response to an earlier participant's question that government itself has today floated a proposal, which requires platforms to compensate the original content creator for data used by them and which includes the AI participants.

Yes. But are you guys actively pursuing such kind of deals yourself? See, we are not seeing much uptick in our revenue growth where the stock performance has been very dismal. I mean, post-COVID, if you would see, there's not much growth that is coming. So AI looks like a very good way to boost our revenues. So what are you guys actively doing to boost some bottom line there?

So we -- I mean, I -- we have conversations, but it is not a product to really to share anything on this call.

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 Anna for closing remarks.

Thank you, everyone. Thank you for participating in our earnings webinar. It's been a good 9 months from an overall HT Media Group perspective, and we hope to continue this momentum and come back to you with a good set of numbers for the next quarter as well. Thank you once again. Have a good day.