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    H T Media

    HTMEDIA
    Media, Entertainment & Publication·4 Feb 2025
    Management Summary

    H T Media reported a strong Q3 FY25 with consolidated revenue growing 9% YoY and 11% QoQ. EBITDA saw significant improvement, reaching INR 46 crores, up 64% YoY. While PAT remained negative at INR 3 crores, it showed a 50% sequential improvement. The company maintains a robust cash balance of INR 920 crores, and is actively diversifying into digital and radio, though these segments still face profitability challenges.

    Highlights

    7
    • Total revenue grew 9% on a y-o-y basis and 11% on a sequential basis.

    • EBITDA came in at a positive INR 46 crores, a 64% improvement y-o-y and 42% sequentially.

    • PAT improved 50% sequentially, coming in at negative INR 3 crores.

    • Cash position remains strong with December cash balance at INR 920 crores.

    • Print advertising revenue (English) grew 14% y-o-y to INR 181 crores.

    • Radio business top line grew 29% y-o-y and achieved breakeven performance on the bottom line.

    • Digital business top line grew 32% y-o-y to INR 51 crores, with loss position improving marginally by 24% to a negative 26% margin.

    Concerns

    5
    • PAT remains negative at INR 3 crores.

    • Radio business margins continue to remain under duress, with yields still below pre-Covid levels.

    • Digital business is still operating at a negative 26% margin.

    • Print circulation revenue for English declined 22% y-o-y to INR 13 crores, and Hindi declined 6% y-o-y.

    • Other expenses increased, largely due to investments in OTTplay.

    Key financials

    Single quarter

    03 metrics
    1. 01EBITDA₹46 Cr+64%YoY
    2. 02PAT₹-3 Cr+50%QoQ
    3. 03Cash Balance₹920 Cr

    Segment breakdown

    Print
    9% Revenue Growth₹42 Cr Operating EBITDA400 bps Operating Margin Improvement₹181 Cr English Ad Revenue₹13 Cr English Circulation Revenue3% Hindi Ad Revenue Growth-6% Hindi Circulation Revenue Growth
    Radio
    29.0% Top Line Growthbreakeven text Bottom Line Performance
    Digital
    ₹51 Cr Top Line24% Loss Position Improvement-26% Margin
    List

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Cash ₹920 crores

    Guidance & targets

    1
    CategoryTargetPriority
    Digital
    OTTplay Annual Revenue
    ₹200-250 crores
    Medium

    Radio yields vs. pre-Covid levels

    next quarter
    CurrentStill struggling, below pre-Covid levels
    TargetImprovement towards pre-Covid levels

    Why it matters

    Key profitability metric for the Radio segment, indicating recovery and operational efficiency.

    The simple answer is no, they are still struggling versus the pre-Covid level... So, yield is definitely top of the agenda, but it's a marathon.

    How to verify

    key_financials.segment_breakdown[name='Radio']

    Risks & concerns

    5
    RiskSeverity

    Print industry decline

    Dentsu report projects Print industry decline from 17% to 15% by 2025, prompting the company to diversify and utilize AFE deals.Analyst acknowledged

    medium

    Radio margins under duress and yields below pre-Covid levels

    Despite strong revenue growth, Radio business margins continue to struggle, and yields are still below pre-Covid levels, requiring a 'marathon' effort to improve.Management acknowledged

    medium

    Digital business (OTTplay) still loss-making

    The Digital business, including OTTplay, is in an investment phase and currently operates at a negative 26% margin, though losses are improving.Management acknowledged

    medium

    Increase in other expenses due to OTTplay investments

    Other expenses have increased, primarily driven by investments in OTTplay, which management expects to decrease in the future.Analyst acknowledged

    medium

    Shareholder returns, net worth erosion, and ROCE

    An analyst raised concerns about INR 700 crores of net worth erosion over 5 years and the lack of dividends, questioning the company's return on capital employed (ROCE).Analyst acknowledged

    high

    Q&A highlights

    8

    “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.”

    Clarifies a large liability item on the balance sheet, indicating it's related to ad-for-equity deals, not traditional deposits.

    asked by Mohit Kumra

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY25 Consolidated Performance Overview

    HT Media reported a strong Q3 FY25 with total revenue increasing 9% year-on-year and 11% sequentially. The company achieved a positive EBITDA of INR 46 crores, marking a 64% improvement YoY and 42% QoQ. Despite a negative PAT of INR 3 crores, this represented a substantial 50% sequential improvement. The cash balance remained robust at INR 920 crores as of December 2024, consistent with the previous quarter.

    02

    Print Business Performance and Strategy

    The Print segment's revenue grew 9% year-on-year, with operating EBITDA at INR 42 crores and operating margins improving by 400 basis points. English advertising revenue rose 14% to INR 181 crores YoY, while Hindi advertising revenue increased 3% YoY. However, circulation revenue for English declined 22% to INR 13 crores, and Hindi circulation revenue saw a 6% negative growth YoY. Management is using Ad-for-Equity (AFE) deals and strategic pricing to counter the broader industry decline.

    03

    Radio Business Growth and Profitability Challenges

    The Radio business demonstrated strong top-line growth of 29% year-on-year and 46% sequentially, achieving a breakeven performance on the bottom line. Despite this, margins continue to be under pressure, and yields remain below pre-Covid levels. The company is implementing new initiatives, including off-air properties and events, and exploring digital platforms to improve profitability, acknowledging it as a 'marathon, not a sprint'.

    04

    Digital Business and OTTplay Investments

    The Digital business, including OTTplay, grew its top line by 32% year-on-year to INR 51 crores. While still operating at a negative 26% margin, the loss position improved marginally by 24% year-on-year. The company views OTTplay as a key investment for future growth, with expenses expected to decrease. Management agrees with analyst projections of achieving INR 200-250 crores in annual revenue from OTTplay within a couple of years, targeting over 1% market share of India's 125 million paying OTT viewers.

    05

    Capital Allocation and Shareholder Value Concerns

    The company maintains a strong cash position of INR 920 crores, which it intends to deploy strategically into future-looking businesses like OTTplay and other digital properties. However, an analyst raised significant concerns regarding INR 700 crores of net worth erosion over the past five years and the absence of dividends, questioning the company's Return on Capital Employed (ROCE). Management acknowledged these as serious points, deferring a detailed discussion to the upcoming AGM.

    06

    Strategic Diversification and Operational Efficiency

    HT Media is actively diversifying its revenue streams beyond traditional print, investing in digital news, various languages, and platforms like OTTplay, Shine, and Mosaic Ventures. The company's AFE business, which involves taking deposits from advertisers for investment positions, is a key part of its strategy to extend the life of Print. Management also acknowledged the complexities of having two listed entities (HT Media and HMVL) in the Indian environment, expressing a desire for simplification.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.