Radiowalla Network Limited

Radiowalla provides customer engagement solutions, primarily for the retail industry, focusing on audio and digital signages. The company is currently present in over 30,000 retail stores with its audio solutions, reaching over a billion people daily, and manages content for 800+ digital screens. They create 22,000+ unique playlists daily from a music library of over 100,000 tracks. The company services 650+ retail brands across India and has expanded its footprint to 12 countries across four continents, including Africa and the USA, with services live in over 1,400 cities and towns in India.

For the second half of FY25, Radiowalla reported a revenue of 11.19 crores, a significant increase from 7.98 crores in the second half of the previous year, marking a 40.22% YoY growth. Profit Before Tax (PBT) for H2 FY25 stood at 1.08 crores, up from 56 lakhs (0.56 crores) in H2 FY24, representing a substantial 92.86% YoY increase. Overall, the company's revenue grew 40% year-on-year and PBT grew 93% year-on-year. A one-off^📎 tax impact, stemming from a missed provision in the prior year and current year adjustments totaling 82 lakhs, affected the Profit After Tax (PAT) for FY25.

The digital signage segment is identified as a rapidly growing market opportunity. The company's screen count has almost doubled in the last year, and they aim to double it again in the current year. They manage content for 800+ screens and have a pipeline of over 1,000 screens. A target has been set to reach 5,000 screens under management within the next two to three years. Advertising revenue saw a 94% year-on-year growth last year, and management is confident of maintaining a high growth rate this year. The company also manages 15 digital hoardings outside retail spaces, primarily in Gujarat and Uttar Pradesh, with an expected payback period of 18-24 months.

Radiowalla has expanded its international presence to 12 countries across four continents, including Africa, USA, and South America. While the international market currently represents a minuscule portion of their total outlets (around 1,000 out of 30,000), it is a key growth area. To address administrative challenges associated with international operations, the company is in the process of setting up a subsidiary in Dubai, viewing the Middle East as a growing business and a gateway to Africa. They are also servicing US clients through their co-founder who is a US citizen.

The company is actively investing in technology and AI. They have started using AI-generated music in their retail portfolio and aim for at least 5% of their music to be AI-generated within the next year. A new platform is being developed for smaller retail chains to enable self-curation without extensive manual intervention. Furthermore, Radiowalla is revamping its backend technology infrastructure to ensure scalability for managing up to 100,000 stores, a target they are working towards for the next year or few quarters.

In FY25, the company spent approximately 50 lakhs on hiring personnel and building its team and software to support a more technology-driven approach. Management noted that investments in digital screens made in FY25 will start generating revenue in the next year. They are exploring alternate financing methods, such as lease financing, for assets that generate revenue within five to six months of installation. The company is focused on controlling fixed costs, having reduced manpower cost as a percentage of revenue from 35% to 30%, with a target to bring it down to around 25% in the next two years.

Management clarified a tax impact on PAT, explaining it was a provision related to a tax loss and set-off against TDS from the previous year that was not accounted for at the time of finalization. This was described as a 'one-off^📎 thing' that will not be repeated. Regarding promoter holding being less than 50%, management stated they have actively increased their stake in the company over the last two quarters whenever liquidity allowed. They emphasized their position as the largest player in the industry and their focus on increasing shareholder value through business growth.