Shemaroo Entertainment Limited — Q1 FY26 earnings call

Call held 25 Jul 2025

Management summary

Shemaroo Entertainment reported a challenging Q1 FY26 with a 10% YoY revenue decline to INR 140 crores, resulting in an EBITDA loss of INR 56 crores and a net loss of INR 46 crores. While digital media revenues grew 18% YoY to INR 67 crores, traditional media saw a 26% decline due to increased competition on the Free Dish platform and softness in advertising. The company is implementing strategic measures, including cost rationalization and increased digital investments, but margins remain under pressure from inventory charge-offs, and the debt reduction target for FY26 is unlikely to be met.

Highlights

  • Digital media revenues grew by 18% year-on-year to INR 67 crores.

  • Shemaroo Filmi Gaane YouTube channel reached 72.5 million subscribers.

  • Company achieved over 10 billion views across its digital channels during the quarter.

  • Released six new titles on ShemarooMe Gujarati, including blockbuster films.

  • Management is proactively implementing strategic measures to address shifting dynamics.

Concerns

  • Revenue from operations declined by approximately 10% year-on-year to INR 140 crores.

  • Reported an EBITDA loss of INR 56 crores and a net loss of INR 46 crores.

  • Traditional media revenues declined by 26% year-on-year to INR 72 crores.

  • Margins are expected to remain under pressure due to ongoing accelerated inventory charge-offs (INR 35 crores per quarter).

  • FY26 debt reduction target of INR 60 crores is unlikely to be met, with debt increasing by INR 5 crores from March.

Key financials

  1. Revenue from Operations ₹140 Cr -10%YoY
  2. EBITDA Loss ₹56 Cr
  3. Net Loss ₹46 Cr
  4. New Initiatives Expenses ₹32 Cr
  5. Adjusted EBITDA Loss (Existing Ops) ₹24 Cr
  6. Operating Cash Flow ₹-5 Cr

What they filed

Q1 FY27: revenue down 5.6%, net profit up 82.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue162 164 204 140 143 −12%161 −2%139 −32%132 −6%
EBITDA-26 -42 2 -55 -55 −107%-67 −59%-87 −3795%-2 +97%
Net profit-26 -37 -5 -46 -46 −76%-55 −50%-72 −1354%-8 +82%
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

Share of Revenue
₹139 Cr Total
  • Traditional Media ₹72 Cr 51.8%
  • Digital Media ₹67 Cr 48.2%

Capital allocation

high confidence
  • Capex ₹32 Cr this quarter · ₹75 Cr (FY26) planned
    For Q1 FY '26, the revenue from operations stood at around INR 140 crores which declined by approximately 10% year-on-year. The company reported an EBITDA loss of about INR 56 crores for the quarter, while the net loss stood at around INR 46 crores. With regards to the new initiatives, expenses in Q1 FY '26 amounted to INR 32 crores.
  • Debt Gross ₹306 Cr
    So, current debt level is INR 306 crores... And the debt has just gone up by about INR 5 crores from the March balance sheet.
  • Liquidity Liquidity disclosed very strong micro management of cash flow, working capital, etc. happening.
    So there is a very strong micro management of cash flow, working capital, etc. happening.

Guidance & targets

Capex

  • Budgeted spend on new initiatives Capex · FY26 · High confidence INR 75 crores
    So, when we started the year, we had budgeted around at INR 75 crores, which is higher than what we had spent last year because we knew that the big four broadcasters will come in.

    — Hiren Gada

Debt

  • Debt reduction Debt · FY26 · Low confidence Unlikely to meet INR 60 crores reduction

    Previously INR 60 crores → Unlikely to meet INR 60 crores reduction

    That is definitely our intent. Given the way the first quarter has happened at this point, that looks unlikely.

    — Hiren Gada

Inventory Charge-offs

  • Quarterly charge-off amount Inventory Charge-offs · Every quarter (FY26) · High confidence Around INR 35 crores
    So, yes, as I mentioned in the previous calls, the quarterly charge-off is in the range of around INR 35 crores across the quarters, every quarter.

    — Amit Haria

  • Total accelerated charge-off amount Inventory Charge-offs · FY26 · High confidence Around INR 140 crores
    So, if I have to just extrapolate that, it would be around in the region of INR 140 crores of accelerated amount that we will be taking in this financial year.

    — Amit Haria

  • Last year for accelerated charge-offs Inventory Charge-offs · FY26 · High confidence This financial year
    Okay, and so this financial year will be the last year, right? Yes.

    — Hiren Gada

Traditional Media Revenue

  • Decline rate Traditional Media Revenue · Going forward · Medium confidence Slower decline
    So, it will be a slower decline going forward, is that what you are saying? Yes. And I do not know, I mean, if we get bigger deals and all that. So this thing is. Yes, yes, but from the current levels, it will obviously be a bit of slower decline. That is right. Significantly slower than that. This is what we anticipate. The pressure on broadcast revenues will continue because that is how the entire year will go.

    — Arghya Chakravarty

What to watch in Q2 FY26

Debt reduction progress

Next quarter
Current INR 306 crores (up INR 5 crores from March)
Target Progress towards reduction

Why it matters

Management indicated the FY26 debt reduction target is unlikely, so monitoring any reversal of the Q1 increase is crucial for financial health.

So, current debt level is INR 306 crores... And the debt has just gone up by about INR 5 crores from the March balance sheet.

Risks & concerns

  • Increased competition in Free Dish platform

    high

    Re-entry of major broadcasters led to redistribution of viewership and 15-25% changes in advertising monies, impacting Shemaroo's channels.

    Management acknowledged

  • Margin pressure from accelerated inventory charge-offs

    high

    Charge-offs of ~INR 35 crores per quarter (total INR 140 crores for FY26) will keep margins under pressure, though FY26 is the last year for this.

    Management acknowledged

  • Softness in FMCG advertising and packed sports calendar

    medium

    Further intensified headwinds for traditional entertainment businesses, contributing to revenue decline.

    Management acknowledged

  • Inability to meet debt reduction target

    medium

    Debt increased by INR 5 crores from March, making the FY26 target of INR 60 crores reduction unlikely.

    Management acknowledged

Q&A highlights

7 direct
Impact of new broadcasters on Free Dish viewership and ad revenue Direct
The impact is largely around what has happened, with the entry of the four new broadcasters, the viewership numbers have not increased. It is not that new viewers have come to the Free Dish platform. So what has happened is, overall, GRCs in the Free Dish platforms have got redistributed... I think about, we would say about 15% - 20% - 25% changes in the advertising monies, depending on which channels viewership has moved.

Explains the significant decline in traditional media revenue and the competitive landscape due to changes in the Free Dish platform.

Asked by Yash Kukreja

Strategic focus on digital growth vs. traditional media Direct
we are also, readjusting our investments in our overall content portfolio. So while we are continuing to our focus in broadcast, we are taking some rationalizing of cost measures and so on and so forth. But we have increased our investments on our digital media businesses, largely around YouTube.

Highlights the company's strategic shift towards increased digital investments and cost optimization in traditional segments to adapt to market dynamics.

Asked by Yash Kukreja

Current debt level and FY26 debt reduction target Direct
So, current debt level is INR 306 crores... That is definitely our intent. Given the way the first quarter has happened at this point, that looks unlikely... And the debt has just gone up by about INR 5 crores from the March balance sheet.

Provides the current debt figure and indicates a potential miss on the previously stated debt reduction target for the financial year.

Asked by Yash Kukreja

Operating cash flow for Q1 FY26 Direct
It was negative around INR 5 crores.

Reveals the cash burn during the quarter, which is a key factor in the company's liquidity and debt management.

Asked by Yash Kukreja

Outlook for traditional business for FY26 and FY27 Direct
So the broadcast business has obviously come under pressure... The second part is the syndication business, which... is a lumpy business... But there are a lot of deals in pipeline, so it will happen sometime over the future in the next three quarters... The pressure on broadcast revenues will continue because that is how the entire year will go.

Offers a detailed explanation of the ongoing challenges in both broadcast and syndication segments of traditional business, indicating continued pressure throughout the year.

Asked by Urmish Shah

Total budgeted spend on new initiatives for FY26 Direct
So, when we started the year, we had budgeted around at INR 75 crores, which is higher than what we had spent last year because we knew that the big four broadcasters will come in.

Clarifies the company's planned investment in growth areas for the current fiscal year, indicating a strategic focus despite overall revenue decline.

Asked by Yash Kukreja

Breakdown and future plan for accelerated inventory charge-offs Direct
the quarterly charge-off is in the range of around INR 35 crores across the quarters, every quarter. So, if I have to just extrapolate that, it would be around in the region of INR 140 crores of accelerated amount that we will be taking in this financial year. ... this financial year will be the last year, right? Yes. Yes.

Provides clarity on the significant accounting adjustments impacting profitability and confirms that this headwind will cease after the current fiscal year.

Asked by Yash Kukreja

2 min read 5 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Shemaroo Entertainment reported a revenue from operations of INR 140 crores in Q1 FY26, marking an approximate 10% year-on-year decline. The company recorded an EBITDA loss of INR 56 crores and a net loss of INR 46 crores. After adjusting for INR 32 crores in new initiatives expenses, the EBITDA loss from existing operations stood at INR 24 crores. Operating cash flow for the quarter was negative at approximately INR 5 crores.

Digital Media Growth & Strategic Focus

Digital media revenues demonstrated strong growth, increasing by 18% year-on-year to INR 67 crores, driven by robust performance across YouTube, ShemarooMe, and syndication. The flagship YouTube channel, Shemaroo Filmi Gaane, surpassed 72.5 million subscribers, and the company garnered over 10 billion views across its digital portfolio. Management is actively increasing investments in digital content, including fresh content for YouTube and expanding title mixes on ShemarooMe, with a budgeted spend of INR 75 crores for new initiatives in FY26.

Traditional Media Headwinds & Advertising Trends

Traditional media revenues declined significantly by 26% year-on-year to INR 72 crores. This decline was primarily attributed to the re-entry of major broadcasters on the Free Dish platform, which redistributed viewership and impacted advertising monies by 15-25%. Additionally, a packed sports calendar and softness in FMCG advertising further intensified headwinds. Management is rationalizing costs for select channels and repositioning others to align with audience preferences, while cautiously optimistic about a seasonal pickup in advertising spend in the upcoming festive quarter.

Inventory Charge-offs & Margin Pressure

Margins are expected to remain under pressure due to ongoing accelerated inventory charge-offs, which are purely accounting adjustments and do not reflect monetization or free cash flow. The company anticipates quarterly charge-offs of approximately INR 35 crores, totaling around INR 140 crores for the full FY26. Management confirmed that this financial year will be the last for these accelerated charge-offs, indicating a potential relief for margins in subsequent periods.

Debt Management & Capital Allocation

The company's current debt level stands at INR 306 crores, an increase of INR 5 crores from the March balance sheet. While the intent to reduce debt by INR 60 crores in FY26 remains, management stated this target is unlikely to be met given the Q1 performance. Despite this, management highlighted strong micro-management of cash flow and working capital. The budgeted spend for new initiatives in FY26 is INR 75 crores, reflecting a strategic investment in growth areas.

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