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    Shemaroo Entert.

    SHEMAROO
    Media, Entertainment & Publication·25 Jul 2025
    Management Summary

    Shemaroo Entertainment faced a challenging Q1 FY26 with a 10% YoY revenue decline and significant losses, primarily driven by headwinds in traditional media due to increased competition and advertising softness. Conversely, digital media revenues showed robust 18% YoY growth, fueled by strong platform performance and content investments. The company is implementing strategic cost rationalization and digital focus, though its debt reduction target for the fiscal year appears unlikely.

    Highlights

    3

    • Digital media revenue grew 18% YoY to ₹67 crores, demonstrating robust performance across platforms.

    • Shemaroo Filmi Gaane, the flagship YouTube channel, achieved a significant milestone of 72.5 million subscribers.

    • The company's digital portfolio garnered over 10 billion views during the quarter, underscoring strong digital engagement.

    Concerns

    5

    • Revenue from operations declined 10% YoY to ₹140 crores.

    • Reported an EBITDA loss of ₹56 crores and a net loss of ₹46 crores for the quarter.

    • Traditional media revenues declined 26% YoY to ₹72 crores due to increased competition and advertising softness.

    • The FY26 debt reduction target is unlikely to be met, with debt increasing by ₹5 crores from March to ₹306 crores.

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

    What Changed2

    vs Q3 FY26

    Guidance items4 → 5 (+1)Risks discussed3 → 4 (+1)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue from Operations₹140 Cr-10%YoY
    2. 02EBITDA Loss₹56 Cr
    3. 03Net Loss₹46 Cr
    4. 04New Initiatives Expenses₹32 Cr
    5. 05Adjusted EBITDA Loss (Existing Ops)₹24 Cr

    Segment breakdown

    • Digital Media₹67 Cr48.2%
    • Traditional Media₹72 Cr51.8%
    Donut· Share of Revenue

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹32 crores this quarter · ₹75 crores (FY26) planned

    Debt

    Gross ₹306 crores

    Liquidity

    Liquidity disclosed

    Operating cash flow was negative around INR 5 crores for the quarter.

    Guidance & targets

    5
    CategoryTargetPriority
    Capex
    Budgeted spend on new initiatives
    ₹75 crores
    		High
    Debt
    Debt reduction
    Intent to reduce debt
    		Low
    Inventory
    Accelerated inventory charge-offs
    ₹140 crores
    		High
    Inventory
    Last year for accelerated inventory charge-offs
    This financial year
    		High
    Traditional Media
    Broadcast revenues
    Pressure will continue
    		Medium

    Debt reduction progress

    next quarter
    Current₹306 crores (up ₹5 crores from March)
    TargetReduction in debt

    Why it matters

    Management indicated debt reduction is unlikely for FY26, so monitoring any progress or further increase is crucial for financial health.

    So we are very cognizant of that. As of now, our intent to reduce that debt definitely remains. But given the way the first quarter has gone, that currently seems a little unlikely, to be honest.

    How to verify

    capital_allocation.debt.gross_debt

    Risks & concerns

    4
    RiskSeverity

    Increased competition in traditional media from re-entry of major broadcasters

    Re-entry of Star Utsav, Colors Rishtey, Zee Anmol, Sony Pal on Free Dish platform led to redistribution of viewership and ad monies, impacting existing GECs and Hindi movie channels. — Management acknowledged

    high

    Softness in FMCG advertising and packed sports calendar

    These factors further intensified headwinds across all traditional entertainment businesses. — Management acknowledged

    medium

    Margins under pressure due to accelerated inventory charge-offs

    Ongoing strategic initiative to charge-off inventory (₹35 crores/quarter) will continue to impact margins, though FY26 is expected to be the last year for this. — Management acknowledged

    medium

    Unlikely to meet FY26 debt reduction target

    Despite the intent to reduce debt, Q1 performance (debt increased by ₹5 crores to ₹306 crores) makes achieving the FY26 target unlikely. — Management acknowledged

    medium

    Q&A highlights

    7

    “So what has happened is, overall, GRCs in the Free Dish platforms have got redistributed. So while the new broadcasters have garnered a lot of GRCs, it has come from some from existing GEC channels, some from Hindi movie channels, some from news, and some from other sectors... So as a result, what has happened is, the overall ad spend in Free Dish platforms have not come down, but the advertising monies have also got redistributed according to the viewership changes. I mean, it depends on which channel has got hit so much and so on and so forth. But largely, at an overall level, I think about, we would say about 15% - 20% - 25% changes in the advertising monies, depending on which channels viewership has moved.”

    Clarifies that the impact is due to redistribution of existing ad spend and viewership, not a decline in overall ad spend, affecting channels differently.

    asked by Yash Kukreja

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

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

    02

    Headwinds in Traditional Media Segment

    The traditional media business faced significant pressure, with revenues declining by 26% year-on-year to INR 72 crores. This was primarily attributed to the re-entry of major broadcasters like Star Utsav and Colors Rishtey on the Free Dish platform, leading to a redistribution of viewership and advertising monies. Additionally, a packed sports calendar and ongoing softness in FMCG advertising further intensified headwinds across traditional entertainment businesses, impacting the company's GEC and Hindi movie channels.

    03

    Robust Growth in Digital Media

    In stark contrast to traditional media, the digital media business demonstrated strong growth, with revenues increasing by 18% year-on-year to INR 67 crores. This growth was driven by robust performance across platforms including YouTube, ShemarooMe, and Syndication. The flagship YouTube channel, Shemaroo Filmi Gaane, achieved a milestone of 72.5 million subscribers, and the company's overall digital portfolio garnered over 10 billion views during the quarter.

    04

    Strategic Initiatives and Content Investment

    In response to shifting market dynamics, Shemaroo is proactively implementing strategic measures, including rationalizing costs for select channels and repositioning others. The company is reinforcing its investment strategy across the content portfolio, particularly in digital media. ShemarooMe Gujarati released six new titles, and noteworthy digital premieres included films like Umbarro and All The Best Pandya, alongside a Hindi dubbed version of Hellaro, indicating a focus on fresh content.

    05

    Debt and Inventory Management

    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 for FY26 remains, management indicated it is unlikely given the Q1 performance. Inventory saw a reduction of INR 40 crores, from INR 568 crores in March '25 to INR 528 crores in June '25. Accelerated inventory charge-offs, amounting to approximately INR 35 crores per quarter (totaling INR 140 crores for FY26), are expected to continue, with this being the last year for such charge-offs.

    06

    Outlook and Future Expectations

    Management expects margins to remain under pressure due to the ongoing accelerated inventory charge-offs. The budgeted spend for new initiatives in FY26 is INR 75 crores, reflecting a proactive investment strategy. While a slower decline is anticipated for traditional media, pressure on broadcast revenues is expected to continue throughout the year. The company remains cautiously optimistic about a seasonal pickup in advertising spend in the upcoming quarter, supported by festive season and strong digital viewership momentum.

    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.