Music Broadcast Limited — Q1 FY26 earnings call

Call held 25 Jul 2025

Management summary

Music Broadcast reported a challenging Q1 FY26 with revenue of ₹49 crores and a negative PAT of ₹2 crores, impacted by an industry slowdown and declining volumes. Despite this, the company maintained its leadership position and saw 35% of its income from diversified alternative revenue streams. Management is focused on strategic realignment, cost optimization, and leveraging digital initiatives for future growth and improved profitability.

Highlights

  • Revenue of ₹49 crores reported for Q1 FY26.

  • Operating EBITDA stood at ₹8 crores, reflecting a margin of 16.1%.

  • 35% of total income was contributed by alternative revenue streams, diversifying the revenue mix.

  • Maintained leadership position, capturing 41% of the total client base across the radio sector.

  • Cash reserves stood at ₹354 crores as of June 30, 2025.

Concerns

  • Reported PAT stood at a negative minus ₹2 crores for the quarter.

  • Broader industry slowdown with overall volumes declining by 2%.

  • Impacted by continued global economic uncertainties and prevailing trade tensions.

  • Overall industry yield has not yet reached pre-COVID levels.

Key financials

  1. Revenue ₹49 Cr
  2. Operating EBITDA ₹8 Cr
  3. EBITDA Margin 16.1%
  4. PAT ₹-2 Cr
  5. Cash Reserves ₹354 Cr

What they filed

Q1 FY27: revenue down 9.7%, net profit up 524.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue55 65 55 49 38 −31%46 −29%41 −25%45 −10%
EBITDA3 11 -45 1 -5 −281%8 −30%-47 −5%8 +772%
Net profit-2 4 -38 -2 -7 −246%4 +2%-48 −26%9 +525%
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

  • FCT (Frequency Commercial Time)
    65% Revenue Share
  • NFCT (Non-Frequency Commercial Time) / Alternative Revenue Streams
    35% Revenue Share

Capital allocation

high confidence
  • Debt Debt disclosed
    So there are no borrowings in the company. It's basically accounting entries of the leased properties we have for our studios. So Ind AS working, effect is given to them, they go into depreciation and interest, not as a rental.
  • Liquidity Cash ₹354 Cr
    As of June 30, 2025, our cash reserves stood at Rs.354 crores.

Guidance & targets

Revenue Mix

  • Radio Revenue Share Revenue Mix · next 3, 4 years · Medium confidence 55%

    Previously 65% → 55%

    there will be a 10% shift from radio being a 65% towards 55% and the other revenue streams becoming 45%.

    — Ashit Kukian

  • Other Revenue Streams Share Revenue Mix · next 3, 4 years · Medium confidence 45%

    Previously 35% → 45%

    — Ashit Kukian

Digital Business Growth

  • Digital Business Growth Digital Business Growth · as we go forward · Medium confidence 15-20%

    Previously 20-25% → 15-20%

    We've been averaging -- last 2 years, we've been growing at a 20%, 25% average and that's how it is. And even if it is a little muted, we expect a 15% to 20% growth 15% at least as we go forward, which will be much more than the regular radio growth.

    — Ashit Kukian

Profitability

  • EBITDA Margin Profitability · next 2 quarters · High confidence improved margins

    From 16.1% today

    we'll see remarkable difference between what margins we have been demonstrating in the last 2 to 3 quarters vis-a-vis what will demonstrate in the next 2 quarters.

    — Ashit Kukian

  • EBITDA Margin Profitability · next 3 to 5 years · High confidence 20%

    From 16.1% today

    can we see ourselves coming back and reaching out to about 20% kind of margin levels, given out the industry plays as per what we are expecting? Yes, of course. Yes, of course, without a doubt.

    — Ashit Kukian

What to watch in Q2 FY26

Impact of cost structure revisiting on margins

next 2 quarters
Current EBITDA Margin at 16.1%
Target Remarkable difference / improved margins

Why it matters

Management's strategic realignment and cost optimization efforts are expected to significantly improve profitability, which is crucial for long-term resilience.

I'm sure when you look at our next quarter numbers and the quarter after that, you will see that, that is a great impact of our cost measures that will be seen in the bottom line.

Risks & concerns

  • Broader industry slowdown and volume decline

    high

    Overall volumes declined by 2% due to industry slowdown.

    Management acknowledged

  • Global economic uncertainties and trade tensions

    high

    Adversely affected advertising spend and market sentiment.

    Management acknowledged

  • Yield not reaching pre-COVID levels

    high

    The overall industry's yield has not recovered to pre-COVID levels, impacting revenue.

    Management acknowledged

  • Slow government spending

    medium

    Government, a large spender, has been slow in the last 2-3 years, impacting overall profitability.

    Management acknowledged

Q&A highlights

8 direct
FCT and NFCT revenue split Direct
65% is our FCT split, the balance is NFCT, which is 35%.

Clarifies the current revenue composition between traditional advertising and alternative streams.

Asked by Kushi

Volume growth for the quarter Direct
It has been a degrowth, because the industry has seen a degrowth in this quarter.

Highlights the challenging market conditions impacting the core business.

Asked by Kushi

Reason for high depreciation despite low capex Direct
So the depreciation also includes the amortization of the onetime fees which we have paid... and they expire by FY '30.

Explains an accounting nuance impacting profitability and clarifies that it's not solely due to physical asset depreciation.

Asked by Jagdish Sharma

Business plan for next 3-4 years given cash reserves and slow radio growth Direct
we have already created parallel platforms along with radio, which will be year-on-year showing growth, which we have demonstrated in the last 2 years, that includes digital out of on ground activation-led revenues and so on and so forth. That's why 35% of the revenues is coming from the noncore radio business per se, number one.

Outlines the company's strategy for growth beyond traditional radio and how cash is being deployed for diversification and cost efficiency.

Asked by Jagdish Sharma

Company borrowings despite high cash reserves Direct
So there are no borrowings in the company. It's basically accounting entries of the leased properties we have for our studios. So Ind AS working, effect is given to them, they go into depreciation and interest, not as a rental.

Clarifies that the company is debt-free and what appears as 'borrowings' are accounting entries for leased assets.

Asked by Jagdish Sharma

M&A strategy and entering the broader music industry Direct
Yes. So, if you know, we have already launched a music platform called that 'Muzartdisco', which is basically a distribution platform that we have created. Through this platform, any artist can distribute his songs in more than 100 countries plus when it comes to music distribution.

Reveals the company's organic entry into the broader music industry through a new platform and its strategic patience for M&A.

Asked by Jagdish Sharma

Industry headwinds and evolution of traditional radio business Direct
the overall industry has been affected... the yield has yet not reached the pre-COVID levels... the large yield market, which is your metro markets... has not been able to still yet reach the saturation level that it needs to.

Provides a comprehensive overview of the macro and industry-specific challenges affecting the core radio business.

Asked by Bharat Gupta

Early signs of recovery and festive season outlook Direct
Yes, yes, there is an early sign of recovery for sure... We are sensing a better quarters going forward given the fact that there is an increased level of interest that I'm seeing from advertisers.

Offers a positive near-term outlook for advertising demand and potential recovery in the upcoming quarters.

Asked by Sakshi Pratap

2 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Music Broadcast Limited reported a revenue of ₹49 crores for Q1 FY26, with an operating EBITDA of ₹8 crores, translating to a margin of 16.1%. The company recorded a negative PAT of ₹2 crores for the quarter. This performance was primarily attributed to a broader industry slowdown, which saw overall volumes decline by 2%, exacerbated by continued global economic uncertainties and trade tensions impacting advertising spend.

Strategic Diversification and Revenue Mix

The company has made significant strides in diversifying its revenue streams, with 35% of its total income now derived from alternative sources such as branded properties, digital ventures, and special events. Management aims to further shift this mix, targeting a 55% share for radio and 45% for alternative revenue streams over the next 3-4 years. This strategy is designed to enhance financial resilience and drive sustainable growth amidst industry challenges.

Cost Optimization and Profitability Outlook

In response to the evolving market dynamics, Music Broadcast is implementing a strategic realignment focused on optimizing its cost structure and enhancing operational efficiency. Management anticipates that these cost measures will lead to a 'remarkable difference' in margins over the next two quarters and aims to achieve a 20% EBITDA margin within the next 3-5 years, indicating a strong focus on long-term profitability.

Leadership Position and Client Engagement

Despite the challenging market conditions, Radio City maintained its leadership position, capturing 41% of the total client base across the radio sector. The company highlighted strong client relationships, noting that 34% of all new clients entering the radio advertising space chose Radio City as their partner, underscoring the effectiveness of its targeted marketing initiatives.

Digital Initiatives and Future Growth Avenues

Music Broadcast is actively investing in new age businesses, including the launch of 'Muzartdisco,' a music distribution platform, and a podcast platform. The digital business has historically grown at an average of 20-25% over the past two years and is projected to continue growing at 15-20% going forward. These initiatives are seen as EBITDA boosters and crucial for capitalizing on emerging opportunities in the evolving media landscape.

Cash Position and Capital Allocation Strategy

As of June 30, 2025, the company maintained robust cash reserves of ₹354 crores. Management clarified that the company has no external borrowings, with any reported 'borrowings' being accounting entries for leased properties. While no specific M&A deals were announced, the company is strategically evaluating opportunities, particularly for acquiring additional radio stations if regulatory conditions, such as the shift to a 4% gross revenue fee, become favorable.

Market Headwinds and Signs of Recovery

The company acknowledged significant industry headwinds, including overall yield not reaching pre-COVID levels, metro markets not fully saturating, and slower spending from government advertisers. However, management noted early signs of recovery in advertising sentiment and increased interest from advertisers, expressing cautious optimism for improved performance in the quarters ahead.

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