Hindustan Media Ventures Limited — Q3 FY25 earnings call

Call held 4 Feb 2025

Management summary

Hindustan Media Ventures reported a robust Q3 FY25 with significant revenue and EBITDA growth, driven by strong performance in Print advertising and Radio. While the Digital segment also grew its topline, it continues to operate at a loss, and overall profitability is impacted by strategic investments in new digital ventures like OTTplay. The company maintains a strong cash position and is focused on diversifying its revenue streams, though shareholder concerns regarding long-term value creation and capital returns were raised.

Highlights

  • Consolidated revenue grew 9% YoY and 11% QoQ, indicating strong momentum.

  • EBITDA reached INR 46 crores, marking a significant 64% YoY and 42% QoQ improvement.

  • PAT, while still negative, improved 50% sequentially to negative INR 3 crores.

  • Print segment showed advertising-led growth, with English ad revenue up 14% YoY and 26% QoQ.

  • Radio business achieved handsome topline growth of 29% YoY and 46% QoQ, reaching breakeven performance.

  • Digital business topline grew 32% YoY to INR 51 crores, with loss position improving 24% YoY.

  • Company maintains a strong cash position with INR 920 crores as of December.

Concerns

  • PAT remains negative at INR 3 crores.

  • Print circulation revenue declined 22% YoY for English and 6% YoY for Hindi.

  • Digital business still operates at a negative 26% margin.

  • Radio business yields continue to struggle compared to pre-Covid levels.

  • Increased 'other expenses' due to OTTplay investments are impacting overall profitability, masking Print segment operating leverage.

  • Analyst noted a INR 700 crore decline in net worth over 5 years and no dividend expected this year.

Key financials

  1. Consolidated Revenue — +9%YoY
  2. Consolidated EBITDA ₹46 Cr +64%YoY
  3. Consolidated PAT ₹-3 Cr +50%QoQ
  4. Cash Balance (Dec) ₹920 Cr

What they filed

Q1 FY27: revenue up 19.4%, net profit up 410.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue172 197 182 165 197 +15%183 −7%216 +19%197 +19%
EBITDA-14 2 24 9 -10 +29%20 +900%65 +171%28 +211%
Net profit14 18 45 10 10 −29%1 −94%27 −40%51 +410%
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

  • Print
    ₹387 Cr Operating Revenue₹42 Cr Operating EBITDA400 bps Operating Margin Improvement₹181 Cr English Ad Revenue₹13 Cr English Circulation Revenue— Hindi Ad Revenue Growth— Hindi Circulation Revenue Growth
  • Radio
    — Topline Growth— Bottomline Performance— Profitability Growth
  • Digital
    ₹51 Cr Topline— Loss Position Improvement-26% Margin— Topline Growth— Bottomline Growth

Capital allocation

high confidence
  • Liquidity Cash ₹920 Cr Cash position remains extremely strong, about the same as last quarter.
    Cash position remains extremely strong with December cash balance standing at about INR 920 crores, which is about the same as it was last quarter.

Guidance & targets

Profitability

  • Radio Business Yields Profitability · Sooner rather than later · Medium confidence Pre-Covid levels
    yield is definitely top of the agenda, but it's a marathon. I mean it's not a sprint. So, we are at it and hopefully, sooner rather than later, we'll be able to bring it up to a pre-Covid level, which has been the stated intent, and we are at it, but we're still far away from the pre-Covid levels.

    — Piyush Gupta

Expenses

  • OTTplay Expenses Expenses · Future · High confidence Go down
    Ok. And the expenses on OTTplay that we are doing every year, are we expecting it to go down in future or continue at these levels? Piyush Gupta: Go down for sure.

    — Piyush Gupta

Market Share

  • OTTplay User Base Market Share · Medium confidence More than 1% of 125 million (1.25 million users)
    Well, that is definitely a fair assumption. I think it will be more than that.

    — Piyush Gupta

Revenue

  • OTTplay Business Revenue Revenue · Couple of years · Medium confidence INR 200 - 250 cr
    I absolutely agree with your broad calculation. [Referring to analyst's statement: '10 lakh users, let's say, INR 200 ARPU, let's say, in a couple of years, you should at least be doing INR 200 - 250 cr of business per year from this stream.']

    — Piyush Gupta

What to watch in Q4 FY25

OTTplay Expenses Trajectory

Next quarter
Current Substantial, but 65% lower YoY this quarter
Target Continued decline in expenses

Why it matters

Management stated expenses would 'go down for sure,' which is key to improving Digital segment profitability and overall company margins.

Ok. And the expenses on OTTplay that we are doing every year, are we expecting it to go down in future or continue at these levels? Piyush Gupta: Go down for sure.

Risks & concerns

  • Shareholder Value Creation and Return on Capital

    high

    Concerns were raised about a significant decline in net worth over five years and the absence of dividends, questioning the company's ability to generate adequate returns for shareholders.

    Analyst acknowledged

  • Print Industry Decline

    medium

    The Print industry is facing a decline, necessitating the company's diversification efforts into other media segments.

    Analyst acknowledged

  • Radio Business Yields Below Pre-Covid Levels

    medium

    Despite topline growth, Radio business yields are still struggling compared to pre-Covid levels, impacting overall profitability and requiring sustained effort to improve.

    Analyst acknowledged

  • Profitability Impact from Digital Investments

    medium

    Strategic investments in OTTplay are leading to higher 'other expenses', which currently mask the operating leverage seen in the Print segment and contribute to the overall negative PAT.

    Analyst acknowledged

Q&A highlights

5 direct, 1 evasive
Sundry Deposits on Balance Sheet (AFE Business) Direct
So, INR 588 cr deposit that you take is consequent to our AFE business. So, if you understand the AFE business, we take deposits from our prospective advertisers in which we take an investment position. So, it's second leg of the entry on the AFE deal that they have done.

Clarified the nature of a large liability, explaining it's tied to ad-for-equity deals and not traditional deposit-taking, which is crucial for understanding the balance sheet.

Asked by Mohit Kumra

Print Industry Decline and Company's Diversification Strategy Direct
So, multiple things which are happening here. One, to extend the life of Print, we have an AFE business... Besides that, we are diversifying our business in quite a substantial way... The latest entrant to this journey is the OTTplay platform in which we are currently investing.

Addressed a major sector-wide challenge (Print decline) and outlined the company's multi-pronged strategy for diversification and growth, including AFE deals and new digital platforms.

Asked by Lalit Kumar

Strategic Use of Strong Balance Sheet for Growth Direct
But as I said, look, I think everything has to be calibrated not just from an affordability point of view, which is the cash on the balance sheet, but also where you're having a right to succeed and where the right adjacencies lie.

Provided insight into the company's disciplined capital allocation philosophy for growth, emphasizing strategic fit and 'right to succeed' over merely deploying available cash.

Asked by Namit Arora

Rationalization of Two Listed Companies Partial
Look, I mean, the simple answer is we'd like to simplify things as much as possible. But given the Indian environment, as you rightly alluded towards, there are a bit of challenges. But if we get, let's say, if we manage to bring all our creditors and shareholders together, we would definitely like to follow that stream. But at this point in time, we are continuing the way it is.

Highlighted a structural complexity within the group and management's acknowledgment of the desire for simplification, while also noting the practical challenges in achieving it.

Asked by Namit Arora

Radio Business Yields vs. Pre-Covid Levels Direct
The simple answer is no, they are still struggling versus the pre-Covid level... yield is definitely top of the agenda, but it's a marathon. I mean it's not a sprint. So, we are at it and hopefully, sooner rather than later, we'll be able to bring it up to a pre-Covid level...

Confirmed that Radio segment profitability (yields) remains a challenge compared to historical levels, despite topline growth, indicating ongoing pressure and a long-term recovery effort.

Asked by Narendra Khuthia

Increase in Other Expenses and OTTplay Investments Direct
So, Mehul the other expenses cost that your seeing is largely on account of our investments in OTTplay... But what vitiates the picture is because OTTplay expenses are sitting, which, by the way, themselves on a y-o-y basis are 65% lower than the same quarter last year, but there are still substantial expenses happening there.

Clarified that strategic investments in OTTplay are the primary driver for increased 'other expenses', explaining why overall profitability isn't fully reflecting the operating leverage in the Print segment.

Asked by Mehul Pathak

Discrepancy between OTTplay CEO's Public Statements and Earnings Call Information Evasive
Ok, we heard your point. What you hear on this call is factual and which should be what is taken as the correct picture. We are the representatives of the Company to be able to disclose this information and to give you the factual position.

An analyst challenged management on potential inconsistencies between public statements by a subsidiary CEO and information provided on the official earnings call, raising questions about transparency and communication consistency.

Asked by Mohit Kumra

Long-term Net Worth Decline and Shareholder Returns Partial
I totally hear what you are saying. On the ROCE point, I totally heard what you're saying. If you've got serious points, I think you should definitely bring them to the AGM... But coming on to the networth is gone; therefore, the market capitalizations might be at various levels.

A direct and critical question from an analyst regarding the significant decline in net worth over five years and the lack of dividends, highlighting a major concern about long-term shareholder value creation and return on capital.

Asked by Mehul Pathak

2 min read 6 chapters

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.

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