Shemaroo Entertainment Limited ($SHEMAROO)

Ladies and gentlemen, good day, and welcome to the Q4 FY 2026 Conference Call of Shemaroo Entertainment Limited, hosted by Valorem Advisors. [Operator Instructions] I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Shemaroo Entertainment Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, a quick cautionary statement. Some of the statements made in today's con call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Hiren Gada, CEO; Mr. Arghya Chakravarty, COO; Mr. Amit Haria, outgoing CFO; and Mr. Ashish Gupta, incoming CFO. Without any delay, I request Mr. Hiren Gada to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi, and good afternoon, everyone, and welcome to our earnings call for the fourth quarter and financial year ended 2026. Let me begin with sharing some of the key financial highlights for the period under review, followed by the key operational highlights and also the strategic road map for FY '27. For the fourth quarter of the financial year 2026, the revenue from operations stood at around INR 140 crores. The company reported an EBITDA loss of about INR 87 crores for the quarter with a net loss stood at around INR 72 crores. For the financial year ended 2026, the revenue from operations stood at around INR 583 crores. The company reported an EBITDA loss of about INR 265 crores for the period, while the net loss stood at around INR 219 crores. With regards to the new initiatives, expenses in the fourth quarter for the financial year 2026 amounted to around INR 57 crores. Adjusting for these investments, the EBITDA loss from existing operations for the quarter would have been around INR 31 crores. The same expenses for the financial year 2026 amounted to INR 155 crores. Adjusting for these investments, EBITDA loss from existing operations for the financial year would have been around INR 110 crores. As you are aware, margins remained under pressure due to the ongoing accelerated inventory charge-off, a strategic initiative that we began 9 quarters ago. Over this period, inventory has reduced significantly by about INR 400 crores approximately from about INR 738 crores to INR 339 crores. So in H1 FY '24, which was September '23 half year, we were at INR 738 crores inventory, and that has now come down to INR 339 crores as of March 2026. While debt levels have also declined to around INR 300 crores. Importantly, Q4 marks the final quarter of the charge-off cycle in line with our earlier guidance. These charge-offs are purely accounting adjustments and do not impact the monetization potential of our current library or our ability to generate free cash flow. With the strategic inventory charge-off cycle now concluded, we believe the business is entering the next phase with a stronger balance sheet, lower debt levels and a healthier content inventory position, providing a solid foundation for long-term growth. Moving to the business segment performance. Digital Media revenues for the fourth quarter stood at approximately INR 67 crores, registering a year-on-year growth of 17%, while traditional media revenues for the quarter stood at around INR 73 crores, down by 51%. For the financial year 2026, Digital Media revenue grew by 9% on a year-on-year basis to INR 275 crores, while traditional Media segment saw a degrowth of 29% to INR 308 crores. The overall performance during the quarter continued to be impacted by weakness in the traditional business, even as the digital segment maintained healthy growth momentum. Digital revenue growth was led by strong momentum in the syndication business, and continued expansion of the ShemarooMe subscriber base, which increased by over 30% year-on-year during the quarter. On the traditional media side, revenues were impacted by a weak advertising environment and the moderation in syndication revenues. The decline in syndication was largely driven by the inherently lumpy nature of revenues along with the high base in the corresponding quarter last year. Advertising performance was further impacted by war-related uncertainties, much weighed on, sorry, which weighed on overall ad spend, while major sporting events attracted a larger share of advertising budgets. Given the ongoing macroeconomic pressures, geopolitical tensions and major sporting events like the IPL, the overall advertising outlook for traditional business is expected to remain subdued in the near term, particularly for non-sports category. In other updates, ShemarooMe Gujarati, we released about 6 new titles for the quarter, spanning movies, web series and plays. The platform also saw the world digital premiere movies such as Chaniya Toli, Naankhatai, Faati Ne, Goti Lo, and Subhchintak (Hindi Dubbed). ShemarooMe Hindi premiered its first original Hindi web series Dil Dhokha aur Desire under the Shemaroo Premiere banner, further strengthening our original content portfolio and premium digital offerings. On YouTube, the flagship channel, Shemaroo FilmiGaane surpassed 74 million subscribers during the quarter, while the Shemaroo Entertainment crossed 61 million milestone. Across its entire portfolio of channels, the company garnered more than 9 billion views during the quarter, reflecting sustained digital engagement. We also marked an important milestone in our international content strategy with the co-production of our first Turkish drama series, Aska Mahkum in partnership with Globalsphere Studios. As we enter FY '27, our focus remains on building a strong digital-first media business by expanding Shemaroo's presence across digital ecosystems in both domestic and international markets. With audience consumption continuing to shift towards the digital platforms, we are focused on scaling reach, improving monetization and enhancing content discoverability across platforms and formats. At the same time, we are leveraging technology and AI interventions to drive operational efficiencies and optimize revenues across business. We are also focused on strengthening our portfolio through curated and owned IPs, which we believe will play an important role in driving sustainable growth and long-term value creation for the company. With that, I now open the floor for the question-and-answer session.

[Operator Instructions] The first question is from the line of Urmish Shah from Moneywisers.

Sir, my first question is on the traditional business. I do understand in your opening remarks, you did say that we faced a considerable decline. So what is the reason for that? And how do you see it shape up in FY '27 and FY '28? If you could just give some color on that?

Sure. So there are two overall challenges. So one is the media industry related, which is an ad slowdown, which is due to various questions, various challenges that the economy is facing. Frankly, media is a derivative of the economic situation of the country because as various products have to reach the consumer in a buoyant economic market, in a buoyant economy, the propensity to advertise increases. And in a subdued economy, it reduces. So that is an overall industry level -- this thing. The other is the steady shift from traditional to digital media, which in this financial year, definitely, we have seen acceleration of at least the advertising spend shifting far more towards digital media as compared to traditional media. So as a combination of both, the traditional media revenues have faced challenge. Now in terms of the outlook, we have -- the way we are seeing it, we don't anticipate any significant growth acceleration from the traditional media business. And in fact, as I also shared during my opening remarks that the whole focus of the company itself, we have shifted significantly to a digital-first kind of thought process and beingness. So in that sense, we have positioned and geared ourselves significantly towards increasing our investments, people, focus, many other things towards the whole digital media. But yes, traditional media continues to be a large business for the entire industry. And to that extent, we have to manage it through its declining phase or the declining contribution towards digital -- towards the entire pie.

So when you say declining contribution, so if I just talk in terms of the product mix, today, it is 53% to 47% from traditional to digital. So when you say that digital first is our strategy going forward, what is the shift in the product mix that you are anticipating? I mean, at 60-40 or what's your target?

I believe ultimately, over a 3- to 5-year period, we should be probably at more than 1/3, 2/3 or probably even 1/4, 3/4. Somewhere in between that in a 3- to 5-year period, we should be moving towards that. Now what will -- year-to-year, it is very difficult to give a color that what it will be in FY '27 or '28 because of various factors. But you know that in a 3- to 5-year point of view, that is the trend -- that is the direction in which it will trend.

Okay. Sir, next question is on the debt. I mean, any terms -- in terms of debt reduction plan going forward, if you could just give some color on that?

So as we have even -- as I shared even in the opening remarks that actually even during this period of charge-off, the cash flow has been in a good position, and we have been able to reduce debt although marginally and considering the fact that this last few months have been an extremely challenging period for the economy and for the industry. Notwithstanding that, we are committed to the debt reduction process and thought process. And to that extent, we have -- even in this quarter, the promoters have, in fact, infused capital through a preferential allotment. And we are -- as an organization, we are committed towards that. Obviously, there is an external world that we are dealing with. We are putting in all the necessary input metrics to reach where we want to reach in terms of profitability and cash flow and debt reduction.

Okay. Sir, on new initiatives, our FY '26 cost was INR 155 crores, right? So in FY '27, have we kept aside some amount for that also? Or how is it?

We have and it will be significantly lower than what it was in FY '26. It will probably be less than less than half of it. I mean right now, I'm not in a position to give you an exact number. But from what we have overall budgeted for this year, it will be less than half of what we have spent in. Arghya, you want to add?

Yes. I think when we -- Urmish, when we're talking about new initiatives, basically, new initiatives for us has been broadcast and our OTT business. But the point is that broadcast is coming in the traditional part. And as you heard Hiren said that our focus going forward in terms of all our investments, people, any other focus will be on driving digital. So hence, the new initiatives as we see today, as Hiren said, while we cannot put a number, but it is likely to come down quite a bit, almost maybe even less than half of it. But we can't put a number, but our focus is clearly towards driving our digital business.

And just to add to that, within that also the investment will be largely skewed for ShemarooMe where we are seeing very good traction.

Alright. Sir, one final question. I know it's a bit too early considering the numbers right now, but till when can we expect to be EBITDA and PAT positive?

So I think it's a very relevant question. We are -- as I said earlier also that we are fully committed to -- we believe in the long term of this business, and we continue to invest and we feel that all the inputs are constantly there. We have been pushing all the inputs. So for example, whether it is the ShemarooMe whole, where we have reached a certain point overall in the journey, whether it's all other digital initiatives, YouTube, on licensing syndication, et cetera. So we have all the input metrics constantly being monitored and worked upon. Output, of course, depends on a few external factors. I think if they fall in line, I think we should have a very good period ahead.

[Operator Instructions] The next question is from the line of [ Shubhangi ] from RoboCapital.

Just wanted to know your outlook on top line growth and EBITDA margins for FY '25 and FY '26?

'25?

For '27and '28.

'27 and '28. So I just actually addressed this in the previous question that if given the current overall scenario, it is an extremely -- it's very difficult for us to give a guidance. But we are working constantly on all the input side metrics, whether it is on cost optimization on all our revenue levers that we can push and AI and digital focus. So there is a very large AI initiative on multiple fronts that we are working on. So all of those inputs are constantly being fine-tuned and worked upon. The output, which is growth of top line and bottom line positivity are beyond a point, not in our hand and as we know, for last almost 3 to 4 quarters, the media industry has been severely challenged in terms of overall ad spend. So as we see and as we speak, given the current economic scenario, this is likely to remain challenged for some more time. Till that time, it is very tough to give any outlook, any hard outlook.

The next question is from the line of Sanjiv Pandya from [ Lancers ]

Okay. Sir, I will look a little beyond. I represent terminal value investors. They are large investors, and they invest for terminal value. So I will not be focusing on your current results and even your short-term outlook. So my question relates to the business model volatility. How exactly when you conceptualize -- Sir, it's okay for you to stop me and then say that, no, this is too deep a question and maybe taken -- in fact, I'm looking for that, can be taken offline directly. So if you think I'm going too deep into the subject, please you can stop me, sir.

Sure, please continue.

So this is about business model volatility. In every -- valuation table in every discounted cash flow, one of the ways by which we price the cost of capital is when we look for lower volatility or some kind of risk management, where the downside is taken care of by the company. In your business, I mean, the outside perception is that media is by its very nature, very, very volatile. As you can see, you can't look beyond the next quarter, let alone into the far into the future. So unlike, let's say, a commodity company where we know that the industry is always going to be there, you cannot say the same thing of, let's say, a media company. So from a business model angle, have you given this some thought?

Okay. Sir, I think it's an extremely good question. I have two ways to answer it. One is I will talk about a very brief aspect over here, but I will definitely don't mind having a longer discussion offline. But I think for now, we can have a very small brief answer to it. So actually, contrary to what you are saying, media industry has probably one of the most stable and best long-term value predictability, okay? And particularly, that is exactly how we have built our business. And to give you just a few examples I want to talk of. So we believe in the -- and not just we believe, we have demonstrably seen through empirical evidence in the long-term value of content IP, okay? And to give you an example, I mean, we have a movie perpetually owned a movie called Amar Akbar Anthony. This movie -- when video cassettes were being sold, so technology has been evolving and actually expanding the consumption and scaling the business over many decades. But content has been the only constant rather. So whether Amar Akbar Anthony got sold on video cassettes, on VCD or DVD, consumed on television, on YouTube or on digital media. I think it has worked at the conceptual -- at a fundamental level that content has worked and it has kind of been consumed across whether it is -- whichever media that the audience -- whichever media has been at that time consumed by audiences. On a similar note, you can think of movies like Welcome, Jab We Met, Phir Hera Pheri, et cetera, which we own perpetual rights to and which you can easily identify or relate to in terms of their long-term value and monetizability. We have, in fact, experienced the growing monetization trend. Yes, what we have seen, in fact, contrary to what you said, the short-term prediction is unlikely, it's very difficult because there will be too many variables in any given quarter. But what we have, in fact, experienced is that in the short term, we end up over -- we end up being more pessimistic or underestimating and in the long term, sorry, overestimating in the short term and in the long term, we actually end up underestimating. I clearly remember when we did our IPO, we were -- the contribution of digital business at that time was in single digit. And today, as we saw and we just shared and spoke earlier, we are at roughly 50%, 50%. And the outlook, we can say with far more certainty over the next 3 to 5 years is going to be between 2/3 and 3/4 thereabouts of digital contribution. So actually, the very solid predictability of this business, the cash flow generation ability of this business is phenomenally high. What we do with that cash flow, how we are investing that cash flow into future avenues, et cetera, et cetera, is a different matter. But if you see the core underlying cash-generating ability of this business and predictability, in fact, it is extremely solid.

Right. Sir, that opens up to further questions. I mean to say, I...

Yes, but -- for which I would like to take this offline because this...

Yes, okay. So I'll just stay with the small ones. Am I permitted that?

Yes, you can, I mean, please.

So this is exactly why terminal value investors, people who look at long-term sustainable cash flows would value your company more highly than the next quarter watches. How exactly you manage this volatility through your business mix, which would be a strategic mix of the business and any tactical measures that you might take in -- you go through a particular cycle, like you said, there is a digital cycle to your ratio of your old content inventory. Those also have shifting patterns depending on the age of the population, et cetera. I mean Amar Akbar Anthony may be interesting to a 60-year-old, but may not be interesting to a 20-year-old. So there would be some kind of a decade. So do you have information on how your portfolio would pan out over a period of time?

Absolutely, we have. And we do -- finally, we also understand the fact that content -- there is a content -- certain amount of content decay that happens. And that is what we have to manage the life cycle of that content. We understand certain content has higher shelf life, certain has lower shelf life. So all that is part of our DNA. I mean we have been -- we deal in thousands of movies, we've been doing this for decades now. So we have a certain understanding of this business. And this is exactly what we manage across our portfolio, across our own acquisition models that we built. We have a proprietary valuation model where this life cycle shelf life is actually an important part of the whole consideration whether we want to pay a premium or not. And all that is -- I mean, rest assured, all that is mapped and this thing. I would -- only thing I would like to say here is that there is -- so anyway, this is a deeper question. I mean it's not pertaining to a particular quarter or a particular year. So I think I would like to take this offline. We have -- I mean, there are many, many more examples I can give about content which -- content of 2024 and '25, which doesn't perform at all and content of 1972, which actually delivers like 10x in terms of revenue. So...

[indiscernible] my questions for [indiscernible] I'm hoping you'll give me some [indiscernible] personal thing.

So I would suggest you can reach out to Valorem Advisors and they will help you set up -- even they will be able to answer and they'll help to set up the meeting.

[Operator Instructions] The next question is from the line of Harshit from RoboCapital.

So just wanted to understand [indiscernible] INR 87 crores of EBITDA loss in this quarter. Sir, can you give me a breakup of this?

Breakup?

Yes, breakup of the INR 87 crores [indiscernible ] how much loss was from ShemarooMe and like that?

So we have given a number on the investment, right? In this quarter, it was about INR 55 crores, right? Your initiative was for this quarter INR 56 crores? Yes. Your initiative for this quarter was INR 56 crores, which is INR 56 crores -- which has two businesses in it, broadcast and ShemarooMe.

All right. And just from ShemarooMe, do we have that breakup with you?

No, no, we don't give that breakup.

The next question is from the line of Rajat Shah, an individual investor.

Just had a question regarding the inventory. We have written down INR 275 crores odd this year and I think we stand at around INR 339 crores. So what is the plan going forward?

We have not written down INR 275 crores. But anyway, you ask your question.

So what's the target inventory levels and till when do we write it down, like keep writing it down?

I think you missed my opening comments because I elaborated very a lot on that. This is the last quarter. So after this, the charge-off -- the accelerated charge-off is over. Now it is in normal course.

All right, sir. Cash flow-wise, we are very much positive. So all of this seems very much noncash. So on that front, we are very well, of course.

Yes.

The next question is from the line of Tanmay Golecha from 360 ONE Capital Markets.

Sorry, I missed a bit of the call. I just wanted to understand the guidance for FY '27 and '28. From what fronts do we see the most growth coming in, in terms of our segments? And now that the accelerated inventory write-off [indiscernible] do we see a positive PAT coming in?

I've just actually spoken about this earlier. So two questions here. One is where do we see the growth coming from? As we have clearly said in the opening remarks also that digital is a segment where we have seen growth in this year, in fact, last couple of years, and we overall industry has also seen much more growth on the digital and degrowth on the traditional side. Actually, the industry advertising spends have actually degrown by more than 15% on traditional side, but digital has grown. So our whole focus as an organization is on -- to be the digital-first -- to be a digital-first organization. And that is really where we are looking forward to the growth. And on the guidance-wise, hard numbers, as I said, is very difficult to give in the current scenario of geopolitical and economic impact of all the various fallout of the geopolitical situation. So we have worked on the input side metrics, I can talk about that, which is focusing on the investment on digital side, on the content, strengthening on the IP front, focusing on various productivity aspects, whether it's through AI, through other cost rationalization and optimization measures and strategically focusing on content segments, whether it is outside Hindi, whether it's ShemarooMe, et cetera, et cetera. All those things are very much in place and on a constant tracking and monitoring from our end by our team. So that is something that we are very much doing. Now how it translates into growth and how much bottom line right now, it's very tough to actually give numbers.

How much inventory do we have left to right now?

No, that our accelerated charge-off is over. Rest is all normal inventory, which we have closed the year at INR 339 crores.

The next question is from the line of Amit Mehendale from RoboCapital.

My first question is on the digital business. How do you see revenue growth there for next 2, 3 years? And also some EBITDA -- the margins, if you could give me that will be of great help?

Yes. So I think -- This is Arghya here. I think the digital business, as you see this year also, as Hiren called out in his opening comments, this quarter, we have grown by about 17% and at an overall annual level, we have grown by about 9-odd percent. And I think the momentum that we see around digital business over a period of time now, I think, is likely to continue. And our entire investment and our entire strategic focus will continue to drive our digital businesses, whether it is on the various platforms. We have various platforms as you know. So we expect the growth momentum to continue, and we are prepared and we have prepped ourselves in terms of all our investment and all our plan and strategies around that. To quantify it would be very difficult to do, but we think that the healthy clip of growth of digital would continue to maintain at the same pace. We will hope that it is better. As of now, that's the kind of outlook that we have on the digital front. There was a question on margin...

Sir, could you comment -- I also missed the earlier part of the call. Could you comment on the margins like what were the margins for FY '26? And how do you see over, say, 2, 3 years as the business scales up on the digital side?

We have not spoken about our margins on the digital side. There are -- if you look at broadly from a digital business point of view, there are two large buckets. One is our [indiscernible] BVP business, which is our YouTube and a small amount of -- reasonably small amount of Facebook business that we do, Meta. And on the other side is OTT. And OTT, which is our ShemarooMe, which is -- we have also called out very strong performance metrics in terms of a 30% plus subscriber growth. OTT business, as you know, not just us and overall industry itself, it's a negative margin business. And as you scale, you can scale higher, your margins will only grow. So we are very -- in this kind of an environment at an overall macroeconomic and geopolitical situation where the overall pressures are there on numbers, we have always been very prudent and cautious in scaling up our OTT business. So ShemarooMe, we have scaled significantly over the last few years, while we have kept the burns at a prudent level. And that is what we continue to do -- we will continue to do so. While the other parts of the digital business is margin-accretive, and that also has seen focus and we will continue to see focus. So at an overall level, there are two parts to it. One is margin-accretive and one is not so. Both we are driving. The one which is not margin-accretive, we are being a little prudent. We have been prudent, we will continue to be prudent. But we are seeing growth on both fronts, actually.

Right, sir. And could you give a breakup of the INR 56 crores that was earlier on the new initiative, some broad breakup like top 2, 3 items?

Only two businesses in that, the broadcast and ShemarooMe, only two business. I can say without putting numbers, definitely, the investment was significant -- the amount was significantly higher on broadcast front compared to ShemarooMe in the last financial year.

I would also like to discuss the terminal value part on the B2C business. So I would also like to join if there is a call, I'll coordinate with the IR.

Yes, I request that anyone who may want to have any further query, we would love to answer. We're happy to connect with everyone, but you can reach out to Valorem Advisor. That's my request.

The next question is from the line of Chirag, an individual investor.

So, sir, my question was -- so sir, can you please provide the revenue split like how much comes from YouTube, how much from OTT and how much from syndication business, et cetera?

Unfortunately, we do not report revenue in that manner. We have been for last -- I mean, more than 10 years, we have been reporting traditional and digital, and that kind of is the split that we have been kind of giving for last many years.

Okay. Sir, one more question. Sir, how is the content acquisition strategy evolving for FY '27? Specifically, what is the mix between Hindi catalog and regional content? And are you seeing any inflation in acquisition cost?

Okay. So I'll address it in this way. See, the overall content, as we have been talking throughout this today's whole discussion, the focus on content acquisition is largely going to be digital-led. Now within that, whether it's the language mix of Hindi, Gujarati or even other languages like South, et cetera, I think that is something that we will -- each business has mapped out their own strategy. But there is a -- whether it's on the acquisition front or on the creation front, it will both be driven by digital. Second is on traditional side, the content acquisition strategy will be very opportunistic based on some opportunity to license and syndicate and bundle it along with our existing library catalog. The other aspect of your question was on the cost...

Inflation, right, sir?

So finally, cost of content is linked to revenue and recovery. So where the digital media business, we have overall seen revenues go up. So the costs have also commensurately been going up. And where traditional media, the revenues have been going down, the costs have been going down. Our focus always normally when we do an acquisition is an 18% IRR. It's really not -- whether the costs have gone up or down, it doesn't matter as long as there is a monetization and a potential to make an 18% IRR.

[Operator Instructions] The next question is from the line of Rajesh Jain, an individual investor.

So my first question was that when do you expect ShemarooMe to achieve EBITDA breakeven? And what would be the key milestones required to get there?

So ShemarooMe, I think a couple of questions back I had spoken about is our OTT business. And OTT business, I mean, not just us, I think very few -- industry-wise, it's something which is not -- it's a cash burn kind of a business. So hence -- and as we scale the size of -- as we scale this business, there will continue to be cash burn. The only thing that we are going to do is as we scale like we have done this year to a very large extent, the scaling of ShemarooMe will largely be thereby keeping the cash burn to a minimum. So we will be prudent in our objective of scaling ShemarooMe. So as of now, breakeven is not the objective. The objective is to drive more subscriber base, driving long-term value and creating further dominance in Gujarati, where we're already dominant and gradually expanding our footprint to other IP curations/creations in Hindi and other languages. So our milestones are very clearly around driving scale through increasing the subscriber base, increasing the permanent live base of our subscribers and getting further dominant in Gujarati and expanding across other languages. Those are the milestones that we are chasing in ShemarooMe. But while we are doing that, we will be doing it, as I said, I repeat once again, we'll be very prudent in terms of keeping our cash burns low. But EBITDA positive or EBITDA neutral is not objective on ShemarooMe right now.

I'll just add to that. I think what we have achieved here is a significantly high market share and a significantly high mind share amongst the core Gujarati consuming audience. And today, one can very proudly say that we are by a very big mile -- we are ahead literally from whoever would be the next #2. So that, I think -- and what that does is gives us a very strong headroom. One is to expand the market, go and expand the market and for which we need to do certain more investments because please understand one thing that this business, once we have reached that kind of position, then the lifetime value of the user base that you have actually comes into play, and that is a significant number. Now that point is still some time away and current objective for this business is to chase that and reach that point rather than focus on lowering costs, et cetera. And because the moment you do that, you will lose lifetime value whatever of the audience. And that really is the focus. And while doing all of that, do it in a prudent manner that we don't, so to say, break the bank on this.

My next question was regarding the money that we spent on new initiatives. So if I'm not mistaken, last year, we had given the guidance that we will spend [Technical Difficulty]

Your voice is cracking. I'm not able to hear. Mr. Rajesh...

Am I audible now, sir?

Yes, now it's better.

Yes. So sir, my question was regarding the money that you spend towards new initiatives this year. So I think you spent INR 155 crores this year. And last year, you had given the guidance that you were going to spend INR 75 crores. So my question is that why did you exceed your guidance by INR 80 crores?

As I said at the beginning of the call also that a large part of that was spent on television, on the broadcasting business. And this particular year due to combination of various factors, the lower -- the slower advertising revenue front and the entry of the big 4 broadcasters channels on the Free-To-Air, Free Dish -- because of that, the anticipated loss that we started with or the investment that we started with at the beginning of the year had kind of went up significantly throughout the year, while we did various course correction and all of that. But this is a business where many costs are committed upfront and revenue doesn't translate, it takes time to pull back and reduce and which we have done now in the ensuing period, but -- and many of that -- you will see those -- the impact of that visible in the next year. But yes, last year, we have been continuously updating the fact that both these combination of slowdown in traditional media advertising and the entry of the Big 4 on the Free-To-Air space has -- had an impact on the revenue front.

Okay. So sir, what would be our guidance for next year?

I just spoke about it earlier. It will be less than half is what we anticipate. Again, given the fact that this year, we are beginning in a kind of condition of situation of economic turmoil because of the geopolitical situation. We also are not able to give a more solid guidance. But yes, as of now, we have -- based on everything that we have budgeted for the year, it is less than half of what we spent last year.

Okay, sir. My next question was regarding our inventory levels. So is there a change in the amortization policy going forward from now so that we don't have to do an accelerated inventory charge-offs?

So, we have, of course -- so to give you the context of this, this inventory charge-off policy actually was changed 9 quarters ago, okay? And what we saw at that time, we took a decision to accelerate the charge-off on a set of inventory. And the rest of it anyway is following the changed charge-off policy. And I'll quickly tell you what has changed. One is that earlier, a lot of the charge-off was linked to the deal or transaction happening, which was kind of 1 in 5-year event. And that, in a way, led to some amount of bloating or whatever that carrying that inventory for a longer period. So the visible optically the number looked higher, whereas now we are not doing that since last 9 quarters. We are for content which we own long-term rights, which is 10 years and above that we are charging off equally in a 10-year period. So that is one major thing. Rest all, the charge-off policy broadly remains the same. So I don't anticipate -- already we have brought it down to by INR 400 crores. I don't anticipate -- there may be some quarterly fluctuations here and there based on what we have bought, what we have traded or sold. But by and large, I don't see any charge-off -- any such situation coming back.

My last question was regarding your Dubai subsidiary. So can we get an update on the operational status there?

At this point, I would say it is on a low key. We have formed it for the Web 3.0 metaverse kind of thing. That entire ecosystem is kind of right now on a slow burner, so we have not really stepped up any investment over there. So we have kind of kept it on a slow soft pedal kind of thing as and when -- so we have various development initiatives in place for the Web 3.0 metaverse, et cetera. But considering the fact that this ecosystem has kind of slowed down, we have ourselves slowed down that investment.

Okay, sir. And my last question was that Shemaroo Josh has now completed around 7 to 8 months since its launch. So could you share some color on its current TRP performance, reach, revenue run rate, anything concrete that can help us?

Shemaroo Josh, I think has -- I think it has moved -- it has gone through its own trajectory, and it's still work in progress as we move in the Hindi film business. But the revenues and the GRPs have moved positively, but not to the extent that we would have wanted it to. Having said that, the monetization, considering the overall ad industry challenge that we are going through, which has been talked about now ad nauseam, the same -- the impact of the same is being felt on that also. And hence, the overall channel is not at the level that we wanted to, but it is going through its own pace. That's how I would place it right now.

The next question is from the line of Gaurav, an individual investor.

The accelerated inventory charge-off you have done, will it help us on EBITDA margin front or just the ROE's front of the business?

Sorry, I'm not able to hear your question properly.

Can you hear me now?

Yes, this is better.

Sir, accelerated inventory charge-off you have done, will it help our business in terms of EBITDA margin or the ROE sort of the business?

So, both ways, right? The balance sheet has shrunk because the inventory has come down. So obviously, the capital employed has come down to that extent. So that is one. And of course, the charge-off itself as the accelerated charge-off reduces the additional charge-off that we have been loading the inventory, the P&L for last 9 quarters, that will go away. So yes, that both impact should be visible.

Okay, sir. Sir, my next question is on tax front. How will be the tax form going forward, sir, since we can carry forward these losses?

So we will have -- we have created deferred tax asset as a part of this. And as the company goes into profit for next foreseeable period, at least we will be consuming the deferred tax assets. So to that extent, we should -- we would not have -- I mean, you will now end up not having a tax liability for next foreseeable few years.

Basically, we have the tax shield due to the loss that has been created.

Okay, sir. And sir, my last question would be on the broadcast front. How do you see the broadcast business? And has it improved advertising in this quarter, sir?

Gaurav, I think, you have -- I don't know whether you joined or not, but a lot of discussions have already happened on this. The overall traditional media business, which is -- a lot of it is advertising dependent, has been under serious challenge now for not just this quarter, but for the quite a few last 4, 5 quarters, because we have been under stress, because the overall ad economy has shrunk, because of various reasons, macroeconomic and so and so forth. And now of late, we have the geopolitical issues adding on top of it. So all these things put together, the overall advertising business has come under pressure. And coupled with that, the surge on the digital businesses front, which has continued and even for our company as we have spoken about. So both these things put together have put serious pressure on the traditional business, which is the television business. And hence, it has been a very challenging year on that front. And going forward also, I don't see that challenge changing drastically going forward, at least in the near and immediate future, that stress will continue to be so because the overall economic and the environment situations have not changed.

Sir, my last question, the content acquisition we do from here, do we own this new content perpetually or aggregated basis?

Which content are you talking about?

The content we are acquiring now forward -- in this last 2, 3 years been going forward?

No, that is -- our model itself is a mix of both partial ownership and complete ownership. So broadly, we kind of maintain that mix of partial and complete because some part of the business is pure aggregation or use-based business. So that we only license the content for a period and some of it, we own it. So it's a combination of both.

The next is a follow-up from the line of Amit Mehendale from RoboCapital.

My next -- my follow-up was on the revenue growth for OTT business. Can you provide some color on that? Like what is the current revenue here? What do you expect in next 2, 3 years?

Normally, Amit, we do not provide details on the revenue numbers. But as we have called out, you can see a very healthy subscriber base increase, which we have talked about a 30% and a large part of the revenue growth on the OTT business is driven by subscription growth. And that's what we are focusing on. Our focus is on creating long-term value and on keep increasing our subscriber base and increase -- expand the Gujarati market and get into other languages. That's where I would put it. But it has been a very healthy clip of growth for sure.

Right, sir. And the burn for OTT is more on the subscriber side or what side of business? Is it more for acquisition, customer acquisition like CAC?

So our business is an SVOD business. We don't have an AVOD business. So, yes, the burn is -- I mean the burn is led by -- a lot of it is led by customer acquisition and also content, there's investment in content.

So, broadly, the three large cost lines are on content, on customer acquisition and on the technology front. So I think it's all a combination of now. It's difficult to identify and say which causes what. I mean it's an aggregation kind of thing.

Right, sir. I think if there is so many time left, it will be great to understand more on the strategy going forward. You would know better than there is another listed players that tried doing OTT for many years, didn't work out. So what are we doing differently here that -- or what lessons have we learned from that side that we can incorporate here? Any color on that will be great [indiscernible]

It's a larger question, Amit, and I think this would require a larger conversation because we have been in this business for 4, 5 years and it has been growing steadily. We have our objectives and our strategy very clearly cut out. But that would require a larger conversation. I would suggest that you get in touch with us through Valorem if you want to have a [indiscernible]

Yes, happy to meet and discuss this. I would just say one point that when we started the business also, we were very clear about the fact that this -- as the OTT consumption grows, it will be a segmented business and we need to identify a sharp segment and be focused and own or have a dominance on that segment and which is really the focus that which we took it and which is broadly, if I have to prefer to it is Gujarati language. And that's what we stuck to. We've not really deviated into anything else. and single-mindedly focused on that. And I think that is now giving us the kind of strength and confidence in the future of this business.

The next question is from the line of Sanjiv Pandya from Lancers.

Yes. Sir, this is a follow-up on the risk side, although it remains a terminal value question. You have certain amount of debt. Now the debt has to be paid with a probability of one. What would be the optionality on the written off inventory where you could get a sudden burst of windfall profits that this often happens in various kinds of cyclicals. So even though you are saying that the inventory is written off, there will be a certain optionality of revenues that could potentially still come from there. Do you have some kind of color on that possibility and how much of that could -- as a proportion of the debt?

I can -- so I again would like to quote one or two examples over here or put it in a little different way. I mean, irrespective of the fact, and this is something we have been continuously alluding to and saying that irrespective of the fact that there is an accelerated charge-off. It doesn't mean that, that movie or that its content is not being consumed. It is being heavily -- like depending on its own trajectory and its life cycle, it is being consumed that pace has not changed or the trajectory, whatever it has been following has not changed at all. So the monetization ability of that content has not at all changed. So I mean, I can give some example over here. I mean if you think of Amar Akbar Anthony itself or a movie like, say, I don't know, Beta or something which is regularly heavily consumed on -- across all media, television, digital, et cetera, et cetera. The value of that on the balance sheet is 0. So -- but it is -- does it mean that it's not getting monetized or lesser monetization? No. I mean our team is as aggressively. It doesn't look at what is the cost side of that or what is on the balance sheet side, right? It's -- Beta is being looked at as a piece of content with its inherent potential and being monetized in that fashion.

Okay. We can't get a color on -- as a proportion of the debt, how much of the debt can be considered as paid from the lifetime...

As I told you earlier, this is beyond the scope of this quarter and years'. We can have a separate discussion on that, which I'm happy to do, as I have invited you earlier also, happy to do all of that. But right now, I mean, I'm not able to give you -- I also need to go back, do some working and come back, right?

[Operator Instructions] As there are no further questions, I hand the floor back to the management for closing remarks.

Yes. Thank you so much, everyone, for participating in today's earnings call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR Manager, Valorem Advisors. Thank you.

Thank you very much. On behalf of Shemaroo Entertainment Limited, that concludes this conference. Thank you for joining, and you may now disconnect your lines. Thank you.