Detailed Narrative
Consolidated Performance Overview
Hindustan Media Ventures Limited reported a strong Q3 FY25, with consolidated revenue growing 9% year-on-year and 11% sequentially. EBITDA significantly improved by 64% YoY and 42% QoQ, reaching INR 46 crores. Despite these improvements, the company recorded a negative PAT of INR 3 crores, though this was a 50% sequential improvement. The cash position remains robust, with INR 920 crores as of December, reflecting a healthy financial standing.
Print Business Performance and Strategy
The Print segment demonstrated advertising-led growth, with operating revenue up 7% year-on-year to INR 387 crores. Operating EBITDA for Print was INR 42 crores, with margins improving by 400 basis points. English ad revenue saw a 14% YoY and 26% QoQ increase to INR 181 crores, driven by pricing and mix rather than volume. However, circulation revenue declined, with English down 22% YoY to INR 13 crores and Hindi down 6% YoY, attributed to strategic discounting aimed at increasing copy numbers.
Radio and Digital Business Updates
The Radio business achieved a handsome topline growth of 29% YoY and 46% QoQ, reaching breakeven on the bottom line, with profitability improving 88% QoQ. This growth was driven by both on-air and off-air properties, including events. The Digital business grew its topline by 32% YoY to INR 51 crores, and its loss position improved marginally by 24% YoY to a negative 26% margin. Sequentially, Digital topline was down 7% and bottomline down 14%.
Ad-for-Equity (AFE) Investments and Strategy
The company clarified that its INR 588 crore sundry deposits are related to its AFE business, where it takes deposits from advertisers and subscribes to their equity or financial securities. These are minority investment positions, not acquisitions, and the underlying assets are primarily held for sale. Management confirmed that the strategy is to exit these investments to generate cash, a process in which they have been successful, contributing to the strong cash balance.
Capital Allocation and Growth Diversification
Hindustan Media maintains a strong balance sheet with INR 920 crores in cash, which it plans to deploy for growth avenues. The strategy involves diversifying into digital new genres, other languages, and adjacencies like OTTplay, Shine (classifieds), and Mosaic (VC/PE stage investments). Management emphasized a calibrated approach to investments, focusing on areas where the company has a 'right to succeed' and aiming to go 'deep rather than wide' in its strategic ventures.
Shareholder Value and Capital Returns
An analyst raised significant concerns about a INR 700 crore decline in net worth over the past five years and the absence of dividends, questioning the company's return on capital. Management acknowledged these concerns, stating that they are investing for long-term sustainable value creation and are trying their best to build future businesses. However, no specific targets for return on capital or dividend plans for the current year were provided, suggesting continued focus on reinvestment for growth.