Music Broadcast Limited (RADIOCITY) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Music Broadcast Q4 FY '22 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashit Kukian, CEO, Music Broadcast Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining the Q4 FY '22 Earnings Call for Music Broadcast Limited. Joining me on the call is Mr. Rajiv Shah from our IR team and our Investor Relations strategic partners, Strategy Growth Advisers. Going by global trends to increase the revenue base, even in the Indian radio industries, players have started looking at the adjacent areas to augment their FCT based revenue. Digital engagement, content and newer distribution channels are some of the new areas of focus. Launching of -- focus on the launching of economic activities in Tier 2 and Tier 3 markets also attracted many local advertisers to radio. The opening up of the country and return of the advertising spend has provided just a shot in the arm that we needed to build up upon the work done in the previous few quarters towards becoming a more efficient, robust and resilient organization. Radio is also expected to accelerate its path to recovery. Last year, the festive season led to some recovery in radio added, and we expect this recovery to grow significantly in FY '23. The adoption of digitization in the audio space has opened up many opportunities for consumers and advertisers. Audiences today are looking for some great audio content on digital platforms, which is likely to attract more brands to leverage the convergence of digital radio and digital, a phenomena that I refer to as [ radigitalization ] is what is being observed worldwide and that changed the way industry has operated since its inception. Our dominant social media presence also helps artists connect better with their listeners, allowing them to create text, audio and visual content. Our guests have become a strong influencer too, which helps broadcasters in monetization. This is further proven by the rebound in volumes. Talking about client counts and market share. Radio City has continued to maintain the lion's share of 41% of the total clients. The overall growth in advertisers in the industry stood at 2% with 1,800 clients coming new in Q4 of FY '22. Out of the total 3,79,000 clients who advertise on the radio platform. Additionally, with a series of sporting events and product launches lined up, the scenario looks equally promising, and the company is well poised to service it and create tremendous value for all the shareholders. For yet another quarter, our market share had stood strong, standing at 20% market share in the industry with an exit share of 21%. Coming to the sectorial ad spend. We observed a drastic growth in some of the major sectors. Real estate, which contributes 14% to the industry, grew by 41% year-on-year, while finance, which contributes 13%, grew by 14% on a year-on-year basis. A staggering growth was observed in pharma and auto as well, with the 2 core categories growing by 10% and 34%, respectively, and contributing 9% volumes each to the industry. A negative trend was observed, however, in the food and soft drinks sector and in the government sector, which was characterized by a degrowth of 5% and 25%, respectively. The degrowth does have an impact as these sectors contribute 9% and 7% volume, respectively, to the industry. Talking about the financial performance for the quarter. The revenue stood at INR 46 crores, witnessing the rise of 8% year-on-year. The EBITDA for the quarter amounted to INR 6.1 crores as against the INR 5.1 crores for the same period in the previous year at an EBITDA margin of 13.3%. The loss of quarter has reduced substantially on a year-on basis from a INR 3.9 crores in Q4 of FY '21 to INR 2.1 crores Q4 FY '22. New revenue opportunities contributed roughly INR 14.75 crores to the top line and accounted for 32% of the sales. These revenues are expected to grow steadily going forward as well. Deliberate optimization efforts have resulted in some permanent cost reductions, yielding significant benefits which are expected to hold good going forward as well. On the collection front, the company has managed to collect INR 66.57 crores during the quarter, of which the collection of government stands at INR 11.46 crores. These efforts on the recovery of revenues has led to the NOD reducing from 216 days to 164 days. Coming to the financial performance for the year gone by. We registered a growth of 32% year-on-year, increasing our top line from INR 127.6 crores to INR 168.4 crores. Our EBITDA increased by 656% from INR 3.7 crores to INR 27.8 crores. Similarly to the quarterly results, the annual losses after tax have substantially reduced from INR 24.2 crores to INR 5.7 crores as a combined effect of [ rising ] ad spend, internal cost optimization measures and accrued benefits of operating leverage being realized. Our focus on having a strong balance sheet continues to show with ample results in our armory, something the company has always believed in. We have a strong liquidity position with cash reserves standing at INR 264 crores as on 31st March 2020 as compared to INR 233 crores as on 31st March 2021. These resources provide the ammunition to capitalize on the opportunities under deliberation and the ones that may arise in the future. Digital integrations have become our anchors, building upon multiple initiatives over the past few quarters. Our presence on social media is huge with a total reach of 198 million spread across multiple platforms. We have an array of digital solutions that provide our customers end-to-end omnichannel solutions for their products and services. All of this combined have led to a 151% increase in digital revenue for the quarter and 115% annually, which albeit going on a small base, are the way forward and will become a significant portion of our business. Lastly, with regards to the bonus issue of the nonconvertible, noncumulative redeemable preference shares as per the direction of the honorable NCLT, the meeting of the equity shareholders of the company is scheduled to be held on Thursday, June 23, 2022, to consider and if thought fit, with or without modification, approve the scheme. We will promptly keep you posted with the development in this regard. With this, I would request the moderator to open up the floor for Q&A. Thank you.

[Operator Instructions] The first question is from the line of Sidhant Mattha from B&K Securities.

Sir, 2 questions from my side. So can you give us the monthly revenue of Radio City? Because I assume that there was COVID in the fourth, like there was Omicron impact in January. Just wanted to know what was the exit rate in March? And what monthly revenues can you expect in April, May, June when the markets have opened up?

Yes. So March revenues, it's a tune of about approximately INR 18-odd crores that we are talking about. And usually, the Q1 revenues are slightly lower than the Q4 revenues. But given the point that the utilization levels are still yet to be fully utilized, we believe that the April, May, June numbers should be more or less in tune with what the Q4 revenues are.

Okay. And sir, do you see, sir, like, I remember in 2019, the FY '19 was a very good year, then there was a slowdown, then COVID came. Sir, what percentage of that sales have been lost by, like, basically advertisers leaving? And also, like, what -- so what -- like, what is your target of reaching by this end of '23? Sir, do you expect to reach the INR 20 crore revenue mark monthly or do you expect it to be around INR 18 crores to INR 19 crores. Sir, just wanted to know.

Roughly around what you're saying, anywhere between INR 18 crores to INR 20 crores because it all depends from the way the adoption happens. But if I go by the understanding of inventory utilization over the Q4 and whatever indications we have in the months of April and whatever now, we believe that the utilization level should be back at the 90% level from an overall perspective. The next thing that will be in discussion is the yield, which we believe there is a huge room for growth because we still actually speak about 60%, 65% of the pre-COVID level yields. So to answer your question, I think you are more or less in line with the thought process about the revenues as we go forward from here.

Okay. And sir, my second question is regarding costs. So we saved around 3 -- INR 520 crores cost in FY '21. And then in FY '22, we could do a tremendous job by saving around INR 330 crores or INR 335 crores. So what percentage of that INR 520 crores saving we could save more than 50% of the cost in FY '22? But now what I can see is there was an uptick in the employee cost and other expenses also in the fourth quarter. So do you expect the trend to continue? And what would be the percentage of savings that will be permanent in nature?

Pre-COVID to COVID, we clearly said there is a 50% savings, which was that. And that is one of a similar business options that we're looking at. But as we go forward, as we empower ourselves more digitally, there will be some amount of cost that will happen from an overall perspective. So we believe we will be still stating about out of the additional 50% -- about 25% to 30% savings will come in. And the balance will come at increased costs, clearly keeping into the future business prospects that we are looking at.

Okay. So sir, and there was any one-offs in this employee cost? Or do you expect the employee cost to -- or some other expenses? Because there was a major uptick. We were around INR 12 crores to INR 13. And now this time, we were around INR 14 crores, INR 15 crores. So just wanted to know whether employee costs -- so whether we will see a similar trend or there were some one-offs.

No, no. I think you will be seeing a similar trend, because there is no one-offs there. Because even when I'm talking about investment in people, we -- it's a gradual process, and it's not that one-stop will kind of get everybody onboard. As the business increases and as we go forward in this call, I'm sure a lot of things will come out in terms of how are we looking at our business as we go forward from year, now and the next few years as we look at our own business.

Okay. Okay. And sir, just my final question is regarding this. So what percentage of local to national advertisers were during the quarter, if you can give the number or just a trend that make -- or just if possible, like...

We'll be -- we always had a 35:65 kind of a ratio from a national to local. And that keeps continuing to us. Last year, we added a lot -- a little more of local coming around 68%, because as you know, the Tier 2 and the Tier 3 cities were the ones which came up faster than the metro cities. But yes, going forward, 35:65 is the ratio, which we see will not change with -- fundamentally, nothing has changed from radio perspective.

No, no. So my basic which -- why I asked this question was that because we are seeing FMCG advertisement, because inflation is going up. So we are seeing rising raw materials. So and FMCG and other companies -- like, FMCG is not a very big contributor, but generally, real estate, FMCG, all are facing input pressures on raw materials. So just wanted to know whether local players will be advertising more or something like that, because national players...

Yes. Local players have been always advertising more for us, because that's how the ratio is around 65%, coming to an extent. Last, last year, it was about 68%. And I think -- which is all around the same ratio as we go forward.

[Operator Instructions] The next question is from the line of Bajrang Bafna from Sunidhi Securities.

Sir, the first question pertains to the digital ballpark, because we are seeing that the digital base is gaining traction and the growth is almost more than 100% that we are achieving during the quarter as well as during the entire year. So if you could just highlight what is the base of this digital revenue? And what is the strategy that we are adopting to grow this space more faster going ahead? And what is the broad purposes over the next 3, 4 years, how this is going to go in terms of numbers?

So for us, when I'm talking about digital play for radio -- for us, the radio digital play is completely rooted onto to radio. When I'm saying rooted onto to radio is we're clearly talking about using our RJ influencers as social media influencers. And brands are riding on their influencing the ability from their own communities and doing an integrated solution between radio and social media presence of these RJs. And just to give you a gist about this whole business, if you have to take a look at the digital business or the digital revenues that is that. It's approximately about INR 36,000-odd crores, of which 50% is your display, search. So if you take INR 18,000 crores away, INR 18,000 crores is the area that you have social media influencers, videos, content creation, brand integrations and so on. If I have to put the play that I am looking at currently, I'm -- and if I could just put -- interject the influencer and the videos, that space is approximately close to INR 5,000-odd crores out of the INR 18,000 crores that we are talking about. So that is the kind of pace that we, at Radio City, currently are operating, which is using influencers. When I'm talking about influencers, I'm also building up an ecosystem, which will not only have our own RJ influencers, but also social media influencers from across media platforms will be wanting to be part of our brand recon, because they believe we make great advertising solutions and brands want that kind of appeal as well as giving them solutions and concern. At the heart of it, we're trying to give you -- I believe that we are a large advertising services company which will give my brands or advertisers or clients what they want. If they want content in a particular platform, I will give them content in that particular platform. If the client wants an engagement in a particular platform, so for me, at Radio City, I'm present on ads, I am also present on ground, I'm also percent on social media in terms of with my RJ. And if there are needs from advertisers outside of my RJs, which is celebrity influencers and all, we will be able to kind of provide it to them, because that's the ecosystem I'm working on. So to give you an answer, out of the so-called 36,000 play influencer radio and video marketing of content creation is approximately INR 5,000 crores.

Okay. So can we expect, let's say, 4% to 5% kind of market share of this INR 5,000 crores over the next 5 years? Is it a fair assumption?

Absolutely. Absolutely, without a doubt. Absolutely, without a doubt. Because it's a fairly sharp focused approach that we are talking about. And I have no doubt it should be of that kind of a ratio.

Okay. My second question pertains to this preference shares, redeemable preference shares. I think the NCLT order has been passed as per the announcement that is there on the BSE from your side and the meetings of shareholders and creditors are going to be convened, I think, on 22nd or 23rd of June. So can you give us some...

23rd.

Yes. So can you give us some time line that after these meetings, and I suppose it is going to be approved only because it is a win-win situation for all the minority shareholders. So what timeframe, we can expect this to be listed on the exchanges?

See, only after the meeting is done, we will be able to give you.

Tentative, sir. I am not exactly, but as per your thought process, what is a tentative time line?

If you ask me to ask for a number, it could be anywhere between 6 to 7 months because after that meeting, we have to again go back to the NCLT. So -- and that is not in our hands, because you know how long we waited for this also. When we started out, we felt it's a 6-month exercise and it's got prolonged to more than that. So yes, if all things goes well, ideally situation is 6 to 7 months, but everything depends on how we get the response from the NCLT and the situation and the way the whole thing is taken forward. But yes.

The process is that once this meeting is convened and whatever is the outcome of these meetings, we need to communicate this to NCLT. Then NCLT will again hear the case, and will finally approve it. Will it go that way?

Yes. Yes, you're right.

And once it is finally approved, then only we will issue those shares, and it'll be listed again?

Absolutely. Absolutely, [ about one ].

Okay. Got it. And on the -- my last question pertains to -- it is a combined on the tourism and the yield. The one segment which was not working fine in the COVID time is the tourism, the hospitality. And we are all the way hearing that now, whether it is hotels or it is restaurants or it is tourist destinations. There is a humongous demand that is there in the market right now. What kind of response or what kind of market share that we are having in that space? Because that's the area which was not working during the COVID time, which has opened up. And the second part is on the yield side. Still, we are at 60%, 65%. Though most of the segments of the industry are getting stabilized or getting back to the pre-COVID levels. Why are we taking so much of time to go back to the earlier rails, which we were enjoying before pandemic? So what is your sense that when this is doable and what is the bottleneck that still needs to be conquered by us to get back to those levels? If you could highlight, that will be really helpful, sir.

So 2 responses. As you rightly said, since the current volumes of the tourism industry, I think, is not really that encouraging in the COVID period. Any amount of share is just a misleading quantity. I'm looking at it from a perspective of what are we doing to create more opportunities for tourism as a category. And that, I can assure you. In the coming months, you will see most local tourism, whether it is Madhya Pradesh tourism, Rajasthan tourism, Maharashtra tourism, Odisha tourism, most of them will be active on radio. And a lot of ideations, both digital plus radios already share to them. Post that, when the market matures with huge contributions coming from this tourism, I would be rather be happy to then share what is the chart that we are looking at. Then your next question is on the basis of the ER. Now please, I think you must understand that till about the end of last quarter when I'm saying we are still at a 70%, 75% utilization level, the elasticity of 25% is still available. In a market which has already been drilling for the last 22 months, the easier option is to first realize the volume-led revenues to begin with. And as that gets saturated, you increase your ER. That's the first point. The second point is the increase of the ER, as in any other competitive business, is a function of how market operates. Unfortunately, while we are in a strong position of volume utilization, there were a lot of players still who are not at the levels of utilization who believe that they can still carry the volume route for another couple of quarters. And that is where the challenge comes in. I don't know if you really closely looked at my Q4 numbers. Unlike my previous 3 quarters, my Q4 volume increases lesser than the radio industry, which is not the previous 3 quarters. That is because I'm precisely trying to do what you want me to do is that strategically increase my yield by reducing lower ER volumes. So the first then that you have seen is that 1% drop that I saw from '21 to '20, which I'm not worried about, honestly, Bajrang, because I think there is a need for ER, that to do. Because over a period of 2 quarters, I believe my yield increase will substitute the volume loss that I have done, and that's a clear strategy from my side. Unfortunately, competitors who are still believing that they would want to expose the volume route first, both though the results have not shown it that way, but I think to each their own strategy. I'm completely aligned to the fact that yield has to go up and with the assurance that the market has come back, a 90%, 95% utilization level will only encourage me to kind of get the yields increase and hence, the revenue increase will be largely yield increase in the top markets where the elasticity is already filled. and in the other set of markets where the volumes are still available, we will play the volume game. So it's a mix of yield and volume as we go forward. I hope that answers your question.

[Operator Instructions] The next question is from the line of Jinesh Joshi from Prabhudas Lilladher Private Limited.

Sir, I just have 1 question on the new revenue opportunity, which contributed approximately INR 15 crores in this quarter. And in the opening remarks, you also mentioned that these opportunities, along with the digital pie, has a very strong growth potential. So can you just highlight, I mean, what kind of growth are we looking at with respect to these opportunities? And over a period of 2 to 3 years, what kind of revenue contribution are we foreseeing?

See, these new revenue growth opportunity is what radio in itself drives on. If you see historically, 35% of radio business year-on-year with new clients coming on board. Within that new clients, we are creating new opportunities like during the COVID period, we created Radio City Bazaar. Now with the digital players, we are creating integrated IP-led ideation with the digital and on radio. So yes, to give you an answer, it will have a substantial play as we go forward because it is a creation of idea-led business opportunities for brands. And with India being the -- at the cusp of being a highly dominant start-up culture, you'll have a lot of these people would who want to kind of do marketing communications, which these opportunities are what we want to give to the new startup culture. And that's why we believe, as we go forward, this will be a continuing business, and it's not a one-off for us or for the industry for that matter.

Okay. And sir, you also highlighted in the opening remarks that yields are at about 60% to 65% of the pre-COVID level. But if you consider the metro market, where are we, say, for example, Mumbai, Delhi, Bangalore, I mean what's the current situation vis-a-vis the pre-COVID number?

That's a marginal increase that we will be talking about from a -- you are talking about the utilization level or you're talking about the yield?

Yields, sir.

Yes. Yields has been around 5% to 6% more than the rest of the players because that's the market that we believe which has the highest potential to add revenues to, not just us, but the overall industry. But yes, that's just a 5% difference between the overall 65% that we are talking about. Because that's the area where we believe there is a 30%, 35% growth charter from an existing yield to the exit of the next coming year that we talked about.

Sure, sir. And can I -- just one last bookkeeping question. Can I have the breakdown between the 28 stations and the 11 stations for FY '22? Can you give me a breakdown?

It's hard to put an average over the last -- while COVID may not be the right year, it's -- 80%, 85% will come from your large 28 stations and 10%, 15% will come from the managed stations, which keeps fluctuating from year to year.

[Operator Instructions] The next question is from the line of [ Riya Varma ] from JR Securities.

So I have 2 questions. Firstly, it seems that the company is having majority towards the digital shares in the total pie as revenue. So will the prominence of radio in our operations die down? Or will there be more of a hybrid mode?

It's a hybrid mode. I don't know. Right now, if you look at my overall numbers, only 6% of my revenue is coming through digital. So we're still 95% radio. As we go forward, while digital growth will be part of that, the pie can become a 9 or a 10 and so on and so forth. It's going to be a hybrid model for sure. The reasons why I believe is -- our faith radio is going to continue and if there is any indications from matured markets where digital has really played its role, I think people are turning back to traditional advertising. And there is enough and more stories that is coming about why people would want to also do traditional advertising to break the digital clutter. Because if you look at now as we go forward with the cookie-less world and so on and so forth, the consumer will have the power to accept an ad or not to accept an ad and any kind of display advertising and all may not work. Yes, the opportunity of influencer-led categories where there's an engagement between the consumer and the influencers into the digital space, which is what I'm talking about will continue to thrive, because that's where the return on investment is. So it's going to be a hybrid model, we are for sure. And I'm talking about not just 1 or 2 years for the next 5 to 6 years for sure. It will be a hybrid model. And for us, our entire digital play is rooted with our radio strength. And when I'm talking radio, the biggest -- and one of the reasons why digital is doing far more is -- as you all know, whether it is Google or any other digital companies, the regionalization of digital, that has happened. And even if you're talking about OTT players or apps, that is that. It is a regionalization of digital, which is growing big and that is where my strengths are. Today, when I talk about radio, nobody can give you the rest of Maharashtra reach that I'm giving. Nobody can read to the outskirts of Gujarat or Madurai and so on and so forth. So the combination of regionalization and the effort that we have on radio is where we believe the future is. And for that, I believe it's going to be hybrid. And fortunately, I keep telling my team, "I don't support format myopia." So it's not an either/or, it's an and for media. So radio and digital is the way forward.

Right. And lastly, what are the internal views of the company regarding the prospects of medium in general? Is it headed the way as -- so I'm talking of the internal views in the company regarding the prospects of the medium in general. Is it headed the way as printed, which has died down? Or are there ways to rejuvenate the same?

No, it will not die down. I think I answered the question that radio will continue to have his role. And as we go forward, there is enough reports, which is coming from large mature digital markets that people are slowly coming back to traditional advertising along with the digital play to break the digital clutter. After a while, too much of anything will not really -- we know your share of voice gets drowned when too many players are there. So you would want to kind of break the clutter. So I'm not -- that again, I'm saying is just adding a little flavor to your advertising efforts that you're doing. So if that is the case, and in any case -- that's not of INR 1 lakh crores, we are talking about INR 2,500 crores, INR 3,000 crores, that's not only pinch much that people have to really substitute that to the balance of the businesses is that is that. The only part is that those INR 2,500 crores, there are only 3 or 4 large players and hence, the volume and value looks bigger from an individual player perspective. But when we look at an advertising per se, I don't think there is a drastic need for even advertisers to look at that because the investments in any business has been prudent and that will continue to the next 5, 6 years for sure. So I'm vehemently telling our faith in radio continues. And we'll leverage radio to kind of put our digital play, because whether it is content, whether it is storytelling, everything, for us, stems from the fact that we have great storytellers. We have great opportunities, and we have great reach, which is what radio works on. And fortunately, for us, most categories, which is -- affinity to digital has also happened to radio. So that's the first point for us. So it's a clear media multiplier play for us. And I have no doubts about it.

[Operator Instructions] The next question is from the line of Vishal Bagadia from ROHA Asset Managers.

So my first question is, what is the benchmark volume for ads per hour?

See, top markets, if you look at the top metro markets, it should be, in a good growing year, anywhere between 95% to 97% utilization level. The balance set up market, depending on the elasticity of the market currently, historic strengths from the time it started is still about 60%, 65%. But that is that the opportunity, I believe, when the whole market gets reconstructed, which is all digital play, shift of medium, consumption and so on. Then it's a play of 30%, 35% of volumes in the set of markets that we are talking about, rather 65% utilization level is there. So yes, it's a large market. If I have to put my set of markets, 10 markets will be around 95%, 97%. I mean, if one wants to get -- one can go to 110% also, but that's where the rate play comes in. And the balance set of market is around 60%, 65%, better. Volume play is still existing, depending on how elasticity the market has in terms of more volumes to be consumed.

Okay. And on the digital side, I wanted to know what is our content cost? Like how much is that -- what would be -- how much is our in-house content productions and the content which we are acquiring from outside? So what would be that percentage and how much of a cost...

Right now, there is no -- we have not got into scales where we are talking about content from outside. Whatever content we are using in the digital part of the world is completely created by ourselves. We have kept ourselves with creators, editors, video. Having said that, as we go forward, if we believe there's an opportunity to create content to an outsider, and we see great value, we'll not shun away from that. But as of today, in the plans that we have got completely, and on the contrary, you'll be happy to know that we create content and due to streaming platforms like Spotify and so on and so forth. So it's the other way around. But yes, as the product -- I mean, market evolves, there may be a day when I would not hesitate to buy content from content creators if there is a market for brands to adopt that and take advantage of it.

[Operator Instructions] The next question is from the line of Rajesh Toshniwal from Siva Metal Industries.

My query was with regard to December '21 quarter and March '22 quarter, there was a revenue fall of around INR 14 crores. Sir, could you please highlight the reasons for this revenue fall? And the way we slipped from a turnaround position of our profit in December quarter to a loss of around INR 9 crores in the March quarter. So was it only because of the fall in revenue? Or is there something else which is to be understood?

I'm sorry, which period are you talking about?

Q3, Q4?

Okay. So typically, if you know -- if you look at radio or any medium for that matter, there is a 16% to 17% drop that you will see from Q4 to Q3. So that's the first part of the story. The balance gap that you're seeing is purely the Jan Omicron effect that happened. And if that Omicron effect wouldn't have happened, we would have been doing almost INR 50 crores plus or a little more than that, I would say. Because that's what the Jan effect was, which populated between Jan and maybe the first week of Feb. And otherwise, there is no difference in the numbers that we are looking at. So yes, you're right. Typically, we -- and that's a historic thing that Q3 being the [ stew ] you'll have always a greater share of advertising revenues, I think, during that period. The fall is usually that in Q4, this time it is more pronounced because of the Omicron effects that we're talking about.

The next question is from the line of [ Ankit Agarwal ] from [ Arc Capital ].

Sir, I have a question. Do you have any plans to sort of expand into other geographies, which are like, untapped as of now?

No. As of now, I think we believe that the growth for us is -- if you know our phase 2, phase 3 strategy, we were always clear. We have only attempted those geographies where we believe it is an advertising attractive market. So we have possibly, in our mix of stations, we have almost, unlike others have more number of stations, we are addressing the 90% attractive advertising market through the geographies that are present. So honestly speaking, as we speak, though they say never say never. As of here, I don't see any real need for us to expand to any other geographies, because we have enough of play to do and expand and go for ourselves in the place that we are talking about, which is radio plus digital.

So -- I mean I asked this because we had tried for that [ Trends ] in Kolkata a couple of years ago, which had sustained and go through. So I'm asking if, like, you had any other such...

No, Trends have been [ re-conceived ]. There is no lost opportunity for us because we are still representing [ Trends FM ] and advertisers are getting that exposure in Kolkata market. Yes. Like -- that's why I said, any other geographies, we are not looking. Kolkata, in future, if it is available, depending on the viability and the financial returns, one may consider it. I'm not saying never, but not in a large scale, one-off here and there is, I think, in the scheme of things is just -- it's an opportunity-led decision that we will take rather than a strategic need to expand ourselves geographically.

The next question is from the line of Depesh from Equirus.

Sir, you mentioned that the 1Q revenues will be similar to the 4Q revenues, right? So I just want to understand, why is that? Because you explained that 4Q was impacted by Omicron in the month of January and February. So how should 1Q be similar to 4Q?

So if you really look at the business of media, usually we have the largest quarter happening in Q3, followed by Q4 and followed by Q1 and Q2 is the way it goes across historically. So if you see, there's a marginal drop that will always happen from Q4, and I'm talking about a normalized year. I'm not talking about a COVID year. Because for 2 reasons. A lot of advertising decisions for brands, when they start the new year, takes the first 45 days because brand managers, brand ads, custodians are relooking at their strategies and so on and so forth. And unless there is a great sporting event that comes in, which is really upswing the spend. So typically, this is the way it is. Your Q3 followed by Q4 followed Q1 followed by Q2 is the large trend. So it's the same route that we're following in a normal year. Yes, having said that, to answer the question that, INR 4 crores, INR 5 crores, whatever that gap of Jan is. Even if you include that, what numbers we will be looking at is marginally lesser than that at a normalized level. So it will continue to be that way. So there is nothing wrong. It's not that we are showing any lesser revenue dip because there is any strategic problem that we're having in the way forward for the business.

And the seasonality that you already pointed out, but we are still like operating like around 50% below the normal revenues that we used to do. So are you saying that it is still going to continue in FY '23? There's not going to be a problem...

So said 2 things. Yes. So that 50% will be offset by 20%, 24% of growth of volume that I had showed. Because if you look at the first 2 quarters of the year, we were at 24% and then 47%, then 75% and then again 68%, 70%. So if I have to average of what we believe is 90%, that volume will be the additional revenue that we are talking about. Myself admitted that we are at 65% -- 60%, 65% of the yield levels, which are -- we should at least reach to 80%, 85%, which is, again, that's the only place where there is a hit because it has a market relatability to it. But having said that, there will be definitely an increase that, that coupled together will give you the increase, which will be closer to what the pre-COVID levels are. And that is at the top line revenue levels. But I can assure you, as far as your company is concerned, our attempt is that even if we fall short by a few crores here and then on the top line level, we are trying to match the bottom line figures of the pre-COVID levels as far as the coming year is concerned.

Got it, sir. And secondly, sir, on the other expenses, are there any one-offs in this quarter, which you want to highlight?

Sorry, sorry?

In the other expenses of INR 25 crores this quarter, are there any one-offs?

No, there is no one-off, unless you are hinting at something which I'm not seeing.

No, the INR 25 crore number, like previously, I find that number came in Q4 FY '20, in which there are a lot of provisions also out there.

So yes, the difference is there is -- as you know, in the last 2, 2.5 years, because of the COVID-related FX and the financial ability of a few maybe agencies and clients, the -- we took a prudent view of receivables very engagingly with, not only ourselves, but with our auditors to kind of safeguard our investors' interest and we have made extra provision this year of doubtful debt. So that INR 6 crores, approximately, has been added. In fact, that has been added in the last quarter. And hence, that figure of INR 25 crores is looking a little pronounced, number one. Number two, honestly, I didn't want to use it because that's not my side saying that if you take it away, we actually would have ended up at marginal profit for the year. But yes, I mean, we believe to show what it is. So that is the only change. That is that, which is purely safeguarding the interest saying that if there is anything which you believe is doubtful at the levels because of the growing uncertainty that people had for the last 24 months, from a deep ability concern, whether it is an agency or our clients, we have provided for it.

So INR 6 crore is the number, right, which is the provisions in this one.

Full year, full year.

Full year, okay.

INR 4.5 crores for the last year quarter -- full year, full year.

And particularly for this quarter, sir, how much, if you can give that number?

Sorry?

Sir, particularly for this quarter, how much is the...

For this quarter, we have done INR 4.5 crores. That is why I said, no? The whole effort we did to -- before closing the year, so that the book reflects the real picture as far as results are concerned. So in the fourth quarter itself, we have done INR 4.5 crores. We have been providing for this variability first from a quarter-on-quarter basis. But when they did a detailed exercise and when we evaluated the last 3 years of our debtors, we felt it prudent to add this additional amount so that we are safeguarding from our -- the way we show our P&L and that's why in the last quarter, we have added INR 4.5 crores.

Okay. So that explains the margin drop. Other thing which I wanted to understand was, sir, like obviously, your Jagran, the parent company Jagran also does a lot of solution business. So why are we also getting into this? And how are we doing different things than what Jagran is already doing?

So there's a difference to what Jagran. Jagran is an event execution company, while we are a solutions providing company. So the difference is that I am doing an integrated solution of radio plus, digital plus on-ground presence. So if a brand wants to have experiential marketing, execution is still not done by me. Execution is done by -- in the large cases, Jagran. But if we believe -- there is competitive pricing happening, we also work with the other agencies. So that is the need of the advertisers. So like I said, I'm an advertising solution provider through the various platforms that I have, all the opportunities that I create. So I'm not getting into the business with Jagran is. I'm using Jagran solutions to kind of give advertising solutions to my brands.

Got it. Sir, as I understand, like, whatever revenue you book in the Radio City, right, you have to pay a license fee of 7%, 8% to the government on that. So why not to divert this entire business to Jagran and stay away from the license fee that you have to pay extra?

I think radio business is radio business, and it's clearly seen whatever is booked on air. It's completely -- it's monitor-able, and I don't think we also believe in doing those things. What business is legitimate is radio will be shown as radio and we'll be paying the royalties and the license as required. So that's something which has never occurred to us, and I don't think as an organization, we'll ever do that.

Got it. But my understanding is right, right? Whatever revenues you book, you have to pay a license fee, right, on that?

Yes. Yes, you're right.

[Operator Instructions] The next question is from the line of [ Sabthi Kothari ] from [ Kothari ] Securities.

I might have a one, sir. My question was that the top line fall from Q3 to Q4 was expected owing to the seasonality. However, the fall is steeper than expected. So what are the reasons for the same? And how much was the Omicron impact on the business?

Yes. I told you, it's about INR 4 crores to INR 5 crores of business effect of Omicron. And if you add that, that will be the marked drop that's normally seen from Q3 to Q4. So that is something which I addressed in the question before -- the last question. If that INR 4 crores to INR 5 crores has come, that is the marginal drop that you see from a 60% to 50%, which is conventional in nature.

Okay. And my next question was that what are the factors that are contributing to the revival in the ad spend and which are showing a negative trend in your experience?

The government is showing a negative trend. The ones that is showing as real estate has grown or food and soft drinks and even consumer products have shown some increase from whatever base they are represented.

Okay. And do we see the same trend continuing? Or do we see a new trend with the rise in e-commerce players and startups entering...

See, e-commerce is also -- finance, e-commerce will continue to use radio across the year that we have been using. I believe there'd be -- some political advertising will come in to government possibly will increase. I also believe care governments will increase with tourism ads coming in and so on. So yes, that category will be an added from a stagnant growth that we saw from these categories. That categories will grow and that will add up to the revenues.

Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for joining us in this earnings call. We are confident that the company will continue building upon the progress made over the last 1 year. The lessons learned and the resilience will further solidify its strong position in the industry, optimize its operations further, deliver greater quality content with amassing talent pool and leverage our extensive network. The presentations and earnings release are already uploaded on the website and stock exchanges. Should you have any further queries, please do feel free to get in touch with anyone of us or with SGA. I wish you the best of luck and more importantly, stay safe and take care. Goodbye.

Thank you. On behalf of Music Broadcast Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.