Shemaroo Entertainment Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Shemaroo Entertainment faced revenue and profitability declines in Q3 FY26, with traditional media under pressure, leading to an EBITDA loss of INR 67 crores and a net loss of INR 55 crores. However, digital media revenues grew 14% YoY, and the company made significant progress in inventory reduction. Management expressed cautious optimism for a recovery in the advertising market and expects improved financial performance and debt repayment in the next financial year as inventory charge-offs conclude.

Highlights

  • Digital media revenues grew 14% YoY to INR 81 crores in Q3 FY26, reflecting sustained digital engagement.

  • ShemarooMe Gujarati released six new titles, including world-digital premieres, expanding content offerings.

  • YouTube flagship channel Shemaroo Filmi Gaane surpassed 74 million subscribers, and overall Shemaroo Entertainment channels crossed 61 million milestones.

  • Significant inventory reduction from INR 727 crores (Dec FY24) to INR 417 crores (Dec FY26), with a target below INR 400 crores by FY26 end, strengthening the balance sheet.

  • Viewership share has stabilized and some lost viewership has been clawed back, particularly in the December quarter, after the re-entry of big players in FTA.

Concerns

  • Q3 FY26 revenue from operations declined 2% YoY to INR 161 crores, and 9M FY26 revenue declined 8% YoY to INR 444 crores.

  • Company reported an EBITDA loss of INR 67 crores and a net loss of INR 55 crores in Q3 FY26, with 9M FY26 EBITDA loss at INR 178 crores and net loss at INR 147 crores.

  • Traditional media revenues declined approximately 14% YoY to INR 80 crores in Q3 FY26 due to pressure from major broadcasters, sports calendar, and softness in FMCG advertising.

  • Debt levels increased to INR 310 crores for 9M FY26 from INR 295 crores in H1 FY26, driven by operational losses and cash requirements.

  • Ongoing accelerated inventory charge-offs, though accounting adjustments, contribute to reported losses, with the last part expected in Q4 FY26.

Key financials

2 periods

Q3

  • Revenue from Operations
    ₹161 Cr
    YoY -2%
  • EBITDA Loss
    ₹-67 Cr
  • Net Loss
    ₹-55 Cr

9M

  • Revenue from Operations
    ₹444 Cr
    YoY -8%
  • EBITDA Loss
    ₹-178 Cr
  • Net Loss
    ₹-147 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
₹161 Cr Total
  • Digital Media (Q3) ₹81 Cr 50.3%
  • Traditional Media (Q3) ₹80 Cr 49.7%

Capital allocation

high confidence
  • Debt Gross ₹310 Cr
    The debt levels is around INR 310 crores for nine months in FY'26.

Guidance & targets

Inventory

  • Inventory levels Inventory · FY26 · High confidence Below INR 400 crores
    Inventory level for the nine months is around INR 417 crores and we should end at around 400. Below 400 is what we expect to end.

    — Hiren Gada

Profitability

  • Bottom line and top line Profitability · Next financial year · Medium confidence Significantly better
    I think we would be looking at a significantly better bottom line and top line next year.

    — Arghya Chakravarty

Debt

  • Debt repayment from operating cash flow Debt · Next financial year · High confidence Large part for debt repayment
    But operating cash flow also we are very confident for next year's thing, which large part of the cash flow generation will go for debt repayment.

    — Hiren Gada

Advertising Market

  • Advertising market environment assumption Advertising Market · Next financial year · High confidence Moderate, soft to moderate kind of environment
    But however, as Arghya was referring to our plans that we are building for next financial year, we are actually building the assumptions on a continuation of a moderate, soft to moderate kind of environment and not really on an aggressively optimistic environment.

    — Hiren Gada

What to watch in Q4 FY26

Inventory levels

By FY26 end (March 31, 2026)
Current INR 417 crores as of Dec 31, 2025
Target Below INR 400 crores

Why it matters

Completion of the inventory charge-off exercise and balance sheet strengthening.

Inventory level for the nine months is around INR 417 crores and we should end at around 400. Below 400 is what we expect to end.

Risks & concerns

  • Pressure on traditional businesses

    medium

    Re-entry of major broadcasters on free-dish, packed sports calendar, and softness in FMCG advertising intensified headwinds across traditional media segments.

    Management acknowledged

  • Soft advertising market

    medium

    The advertising market, especially from FMCG advertisers, has been soft, impacting overall business, but management plans for a moderate recovery.

    Management acknowledged, cautiously optimistic for gradual recovery

  • Inventory charge-offs impacting reported profitability

    low

    Ongoing accelerated inventory charge-offs are purely accounting adjustments and do not affect content monetization or free cash flow generation, expected to conclude by FY26 end.

    Management acknowledged, clarified as accounting adjustment not affecting monetization

Q&A highlights

7 direct
Impact of Chumbak TV rebranding to Shemaroo Josh Direct
It is about roughly almost five months old. So the entire content programming, distribution, branding, everything, you know, the positioning, even on many networks, the local, the LCN numbers and everything has undergone, it is still undergoing changes... we have seen a steady growth in the reach particularly. And secondly, on the programming, on the TRP side also, including client count.

Provides insight into the company's strategic shift to a movie channel and initial positive indicators, despite being early stage.

Asked by Devansh

Revenue and EBITDA guidance considering inventory write-offs Partial
So our annual operating plans for next year are still being kind of finalized as we speak... But directionally, what we want to say... we are definitely looking forward to the next year with a lot of confidence and positivity because of largely three factors. One is this charge-off obviously is going to end in March... if the advertising market improves slightly, even slightly, I think we would be looking at a significantly better bottom line and top line next year.

Addresses the impact of inventory write-offs on profitability and provides a qualitative outlook for the next financial year, highlighting key drivers.

Asked by Devansh

Details on inventory write-offs and remaining inventory Direct
So in the past also we have said that the inventory write-off that is taking place, the accelerated write-off is in the region of INR. 30 crores and INR 35 crores. And on that line, for the Q4 also, around that number would be written-off... as of December, we are down to INR 417 crores inventory. And we have one more quarter to go. So we will end somewhere below 400.

Clarifies the magnitude of ongoing write-offs and the expected inventory level at the end of the financial year, indicating the completion of this accounting exercise.

Asked by Yajat Shah

Usability and value of remaining inventory after write-offs Direct
I do not think there is a question of good or bad... all of this is valuable content which gets monetized across various medium on a daily basis, monthly basis and yearly basis. So this is merely an accounting policy. It does not reflect accounting estimation change. It does not reflect the monetization potential or the cash flow generating ability of this content or inventory.

Reassures investors that the inventory write-offs are accounting adjustments and do not reflect a loss in the underlying value or monetization potential of their content library.

Asked by Yajat Shah

Update on previously deferred syndication deals Direct
Yes. In fact, we had that time also mentioned that those deals have actually been closed subsequently and some of those billings, even by the time the earnings were announced, those had actually materialized. So all those deals actually went through and it is part of this quarter's revenue.

Confirms that previously deferred deals have materialized and contributed to current quarter's revenue, resolving a prior concern.

Asked by Vishal Balada

Stabilization of viewership share after re-entry of big players in FTA Direct
So yes, I mean, when they did enter, there was a fall in the viewership share. Subsequently, in fact, it has not only stabilized, we have actually clawed back some of the lost viewership, particularly in this last December quarter.

Addresses a key competitive pressure point and indicates the company's ability to regain viewership, suggesting resilience in the traditional media segment.

Asked by Hetvi Shah

Outlook on advertising spending, particularly from FMCG companies Direct
I think the overall FMCG industry is looking forward to growing back and that should ultimately lead to spend coming back... we are actually building the assumptions on a continuation of a moderate, soft to moderate kind of environment and not really on an aggressively optimistic environment.

Provides management's cautious but optimistic view on a crucial revenue driver for traditional media, outlining their planning assumptions.

Asked by Hetvi Shah

Debt levels as of 9M FY26 and reduction plan Direct
The debt levels is around INR 310 crores for nine months in FY'26... So we have the debt in the form of CC and OD facilities... we had an operational loss also in this quarter, which pushed the requirement for the cash requirement of the company... operating cash flow also we are very confident for next year's thing, which large part of the cash flow generation will go for debt repayment.

Clarifies the current debt position, the reasons for its increase, and the strategy for future reduction, linking it to expected operating cash flow.

Asked by Harshit Mishra

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Shemaroo Entertainment Limited reported a challenging Q3 FY26, with revenue from operations declining 2% year-on-year to INR 161 crores. The company recorded an EBITDA loss of INR 67 crores and a net loss of INR 55 crores for the quarter. For the nine months ended December 31, 2025, revenue stood at INR 444 crores, an 8% YoY decline, resulting in an EBITDA loss of INR 178 crores and a net loss of INR 147 crores. These figures reflect ongoing pressures on traditional business segments.

Digital vs. Traditional Media Dynamics

The company's digital media revenues showed resilience, growing 14% year-on-year to approximately INR 81 crores in Q3 FY26, driven by sustained digital engagement and platform expansions. In contrast, traditional media revenues faced significant headwinds, declining approximately 14% year-on-year to INR 80 crores. This decline was attributed to the re-entry of major broadcasters on free-dish, a packed sports calendar, and continued softness in FMCG advertising, which collectively negated the growth in the digital segment.

Strategic Digital Initiatives and Content Expansion

Shemaroo continues to strengthen its digital footprint. ShemarooMe Gujarati released six new titles during the quarter, spanning movies, web series, and plays, and hosted world-digital premieres. On YouTube, the flagship channel Shemaroo Filmi Gaane surpassed 74 million subscribers, and Shemaroo Entertainment's overall channels crossed 61 million milestones, demonstrating strong audience engagement and content reach.

Inventory Management and Balance Sheet Optimization

A key strategic initiative involves reducing inventory, which has decreased from INR 727 crores in December FY24 to INR 417 crores as of December FY26. The company expects inventory levels to be below INR 400 crores by the end of FY26. Management clarified that the accelerated inventory charge-offs, amounting to INR 30-35 crores per quarter, are purely accounting adjustments and do not affect the monetization potential or free cash flow generation of their valuable content library.

Outlook on Advertising Market and Future Growth

Management expressed cautious optimism regarding a gradual recovery in FMCG advertising spend in the coming quarters, with the impact of GST rate cuts stabilizing. For the next financial year, the company is building its plans based on a moderate to soft advertising environment rather than an aggressively optimistic one. They anticipate a significantly better bottom line and top line, driven by the conclusion of inventory charge-offs and expected positive operating cash flows.

Debt Position and Repayment Strategy

The company's debt levels stood at approximately INR 310 crores for the nine months ended FY26, an increase from INR 295 crores in H1 FY26. This rise was attributed to operational losses and the associated cash requirements. However, management is confident that a large portion of the operating cash flow generated in the next financial year will be utilized for debt repayment, aiming to strengthen the balance sheet.

Animation and Content Strategy Beyond VFX

While not immediately planning to enter the VFX segment, Shemaroo is focused on strengthening its overall digital offerings, including content inclusion for YouTube and expanding Gujarati and Hindi original content on its OTT platform. The company highlighted its existing strong animation properties like Bal Ganesh and Ghatothkach, which have significant traction across television and digital mediums, and continues to invest in adding more content, sequels, and episodes around these properties.

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