Entertainment Network (India) Limited — Q4 FY25 earnings call

Call held 17 May 2025

Management summary

Entertainment Network (India) Limited reported a strong Q4 and FY25, driven primarily by its digital and non-FCT segments, which saw significant revenue growth. While the core radio business faced headwinds and pricing pressure, the company maintained market share and improved profitability. The digital music platform, Gaana, showed robust subscriber growth and is on track for profitability within 5-6 quarters, supported by a healthy cash balance and increased shareholder returns.

Highlights

  • Domestic revenue for FY25 reached Rs.526 crores, reflecting a 9.4% growth year-on-year.

  • Digital segment delivered stellar growth with revenue reaching Rs.61 crores, up a strong 122% year-on-year.

  • Non-FCT segment maintained strong momentum, growing 20% year-on-year to Rs.151 crores with a 33% EBITDA margin.

  • Q4 FY25 PAT was Rs.21.4 crores, a 21% increase over Q4 last year.

  • The Board recommended a dividend of Rs.2 per share, up from Rs.1.5 per share last year.

Concerns

  • The Radio industry faced significant headwinds during the quarter.

  • Volume growth declined about 4% year-on-year due to a high base from last year's election-related spending.

  • Effective ad rates remain about 25% less than pre-COVID levels.

  • The ad environment business is expected to remain muted in the near term.

Key financials

3 periods

Headline

  • Domestic Revenue
    ₹526 Cr
    YoY +9.4%
  • Core Business Revenue (ex-digital)
    ₹465 Cr
    YoY +2.6%
  • Digital Segment Revenue
    ₹61 Cr
    YoY +122%
  • Effective Rate Growth (vs pre-COVID)
    -25%

Q4 FY25

  • EBITDA (ex-digital)
    ₹37.4 Cr
  • EBITDA Margin (ex-digital)
    27.5%
  • PAT
    ₹21.4 Cr
    YoY +21%
  • Gaana Revenue
    ₹14.6 Cr
  • Inventory Utilization
    81%
  • Volume Growth
    -4%
    YoY -4%

FY25

  • PAT
    ₹48.1 Cr
  • Gaana Revenue
    ₹46.2 Cr
    YoY +261.5%
  • Inventory Utilization
    78%

What they filed

Q1 FY27: revenue down 2.8%, net profit down 14.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue114 159 158 117 141 +24%165 +4%142 −10%114 −3%
EBITDA11 30 29 8 11 +2%15 −50%11 −64%9 +19%
Net profit-4 9 12 -5 -4 −1%-6 −168%8 −32%-6 −14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue (FY25)
₹231.2 Cr Total
  • Non-FCT Segment ₹151 Cr 65.3%
  • Digital Segment ₹61 Cr 26.4%
  • International Operations ₹19.2 Cr 8.3%

Capital allocation

high confidence
  • Dividend ₹2/share (final)
    Lastly, I am very pleased to announce that the Board has recommended a dividend of Rs.2 per share, up from Rs.1.5 per share last year.
  • Liquidity Cash ₹368 Cr
    The Company continues to maintain a strong balance sheet with a cash balance of Rs.368 crores as of March 31st, 2025.

Guidance & targets

Profitability

  • Gaana Profitability Profitability · next 5 to 6 Quarters · High confidence Profitable
    So, Gaana, as we said it's an investment phase. We are reducing cost, and we believe Gaana will become profitable in the next 5 to 6 Quarters.

    — Yatish Mehrishi

Ad Revenue Growth

  • Ad Environment Business Growth Ad Revenue Growth · second half · Medium confidence Growth due to base effect
    The way we look at it is, the ad environment business will remain a little muted. There will be growth because of a base effect in the second half.

    — Yatish Mehrishi

Segment Growth

  • Non-FCT Solution and Event Business Growth Segment Growth · this year also · High confidence Will lead the growth / do really well
    we are very bullish in our non-FCT Solution business and the event business. Event business in Quarter 4 has grown almost 80% for us, and we believe this year also, it will lead the growth even our Solution business has done reasonably well, and we believe that growth will come from the non-FCT segments, and we are double downing on that, and we are very confident that this year also the Event, Concert business will do really well for us.

    — Yatish Mehrishi

What to watch in Q1 FY26

Gaana Profitability

next 5 to 6 Quarters
Current Investment phase, cash burn declining
Target Profitable

Why it matters

Gaana's transition to profitability is key to the digital segment's overall financial contribution and the company's strategic shift.

So, Gaana, as we said it's an investment phase. We are reducing cost, and we believe Gaana will become profitable in the next 5 to 6 Quarters.

Risks & concerns

  • Radio Industry Headwinds

    medium

    The radio industry faced significant headwinds during the quarter, impacting overall performance.

    Management acknowledged

  • High Base Effect from Prior Year

    medium

    Q4 FY24 benefited from extraordinary government and political ad spending, creating a higher base for comparison in Q4 FY25.

    Management acknowledged

  • Muted Ad Environment

    medium

    The ad environment business is expected to remain muted in the near term, potentially affecting revenue growth.

    Management acknowledged

  • Pricing Pressure in Ad Rates

    medium

    Effective ad rates are still about 25% below pre-COVID levels, indicating a lack of full recovery in pricing power.

    Management acknowledged

  • Competition from Free/Freemium Music Platforms

    medium

    Gaana faces competition from platforms like YouTube and Spotify that offer free or freemium models, potentially impacting paid subscriber growth.

    Analyst acknowledged

Q&A highlights

5 direct
Gaana Revenue and Profitability Partial
So, our Gaana revenues for full year increased to Rs.46.2 crores against last year's revenue of Rs.12.78 crores. ... Gaana will become profitable in the next 5 to 6 Quarters.

Analyst sought specific profitability numbers for Gaana, which management declined to provide, instead giving a timeline for future profitability.

Asked by Khushi, Individual Investor

Gaana Market Share Partial
Khushi, market share on digital on Gaana is very difficult to put up because, every platform has a different way of doing business. ... So, if I was to look at a paid share, we are a very healthy share compared to Spotify, but since nobody shares the numbers, it's very difficult to ascertain.

Management explained the difficulty in providing a direct market share comparison for Gaana due to varying business models (paid vs. freemium) among competitors, offering a qualitative assessment instead.

Asked by Khushi, Individual Investor

Inventory Utilization and Volume Growth Direct
So, our inventory utilization for the quarter has been about 81%. And for the full year, has been about 78%. ... So, as we said, last year there were elections and a lot of government spending, so there has been a drop in volume growth of about 4%.

Provides key operational metrics for the core radio business, indicating capacity usage and the impact of external factors on volume.

Asked by Khushi, Individual Investor

Effective Ad Rate Recovery Direct
So, pre-COVID levels, as we have always spoken about, the price has not come back to pre-COVID levels. They stand at about 25% less than pre COVID levels.

Highlights the ongoing challenge in ad pricing, indicating that rates have not fully recovered to pre-pandemic levels, impacting revenue potential.

Asked by Khushi, Individual Investor

Gaana Strategy and Competition Direct
See for Gaana for us, it's very clear it's a Made in India only product in the market right now, on the music streaming service if you look at largely the competition remains YouTube and Spotify. This year, I am very happy to say we have increased our subscriber base by almost 28% as compared to when we took over.

Management detailed Gaana's competitive positioning as a paid-only, India-focused platform and highlighted significant subscriber growth despite a price increase, reinforcing confidence in its path to profitability.

Asked by Prashant, Individual Investor

Impact of Gaana Price Hikes on Subscribers Direct
So, Ronak, what we meant 27% was the profitable base, it was not Rs.599, the profitable base was 27% which now as of March 31st stands at about 35%. We will see the first turn because we increase the price on 1st August, we will see the impact only on 1st August. But we have not seen our growth rate go down.

Addresses concerns about potential subscriber churn or growth deceleration following a significant price increase for Gaana, with management asserting no negative impact on growth rate.

Asked by Ronak Shah, Equirus Securities Private Limited

Non-Government Sector Support for Volume Direct
If you look at the business, which has done well traditionally in Quarter 4, the BFI segments do not spend a lot, and that's where the 16% growth has come on BFSI sector and the real estate sector has done well for us.

Identifies specific sectors (BFSI and Real Estate) that contributed to volume growth, providing insight into advertising demand trends beyond government spending.

Asked by Ronak Shah, Equirus Securities Private Limited

Gaana Paid Subscriber Numbers Partial
Thank you Kavesh, as I said our numbers have grown almost 28% from the beginning of the year, which is very healthy growth if you look at EY growth, we have outperformed the subscriber growth in the market. And we don't reveal the numbers over a period, still if you require anything on our individual calls, we can have a larger discussion on it.

Management declined to provide absolute paid subscriber numbers for Gaana, a key metric for digital platforms, but reiterated strong percentage growth.

Asked by Kavesh Parekh, B&K Securities

2 min read 6 chapters

Detailed narrative

Overall Performance & Revenue Mix Shift

Entertainment Network (India) Limited reported a domestic revenue of Rs.526 crores for FY25, marking a 9.4% year-on-year growth, primarily driven by its digital and non-FCT segments. The core business, excluding digital, grew 2.6% YoY to Rs.465 crores. The company is actively transitioning from a traditional radio company to a diversified multimedia entertainment enterprise, with digital's contribution to total radio revenues increasing from 15% last year to 26% in FY25, and from 24% to 32% in Q4 FY25.

Digital Business (Gaana) Performance & Strategy

The digital segment demonstrated stellar growth, with revenue reaching Rs.61 crores in FY25, a 122% year-on-year increase, largely attributed to Gaana. Gaana's FY25 revenue was Rs.46.2 crores, significantly up from Rs.12.78 crores last year, with Q4 FY25 revenue at Rs.14.6 crores. Management highlighted a 28% increase in Gaana's subscriber base since its takeover and a successful price increase from Rs.299 to Rs.599. The company is committed to achieving profitability for Gaana within the next 5 to 6 quarters, supported by a 15% sequential drop in digital cash burn in Q4 FY25.

Non-FCT Segment Strength

The non-FCT segment maintained strong momentum, growing 20% year-on-year to Rs.151 crores in FY25 and achieving a healthy EBITDA margin of 33%. This growth was primarily driven by successful solution-based initiatives and key on-ground events. Management expressed high confidence in the continued strong performance and growth of both the non-FCT and event businesses for the upcoming year, with the event business growing almost 80% in Q4 FY25.

Radio Business Headwinds & Market Position

The radio industry faced significant headwinds during Q4 FY25, exacerbated by a high base from the previous year's extraordinary government and political ad spending. Despite these challenges, the company maintained a healthy 26% volume share and over 30% value share in the radio segment. However, effective ad rates remain approximately 25% below pre-COVID levels, and volume growth saw a 4% decline year-on-year.

Financial Health & Shareholder Returns

For Q4 FY25, EBITDA (excluding digital) stood at Rs.37.4 crores with a 27.5% margin, and PAT increased 21% year-on-year to Rs.21.4 crores. Full-year FY25 EBITDA (excluding digital) was Rs.118.8 crores with a 25.5% margin, and PAT was Rs.48.1 crores. The company maintains a strong balance sheet with a cash balance of Rs.368 crores as of March 31st, 2025. The Board recommended a dividend of Rs.2 per share, an increase from Rs.1.5 per share last year.

Market Dynamics & Competition

Management acknowledged a muted ad environment but anticipates growth in the second half of FY26 due to base effects and improving macroeconomic conditions. In the digital music space, while direct market share comparison with freemium models like YouTube and Spotify is challenging, Gaana claims a 'very healthy share' in the paid music streaming market. The company sees massive headroom for growth in the paid subscriber base, noting 200 million free music subscribers versus only 15 million paid users in India.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Media, Entertainment & Publication earnings calls