Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue grew by 12% year on year, reaching INR59.6 crores.
- EBITDA surged by 25% year on year, with EBITDA margins expanding by 260 basis points to 27%.
- Digital business achieved a 45% year-on-year growth, contributing 10% to overall revenue.
- Radio City maintained a market share of 19% and launched RC Studio on JioTV, expanding reach.
- Strong liquidity position with cash reserves of INR338 crores as of June 30, 2024.
Negative Points
- Ad rates are still at 90% of pre-COVID levels, indicating incomplete recovery.
- Inventory utilization is at 71%, suggesting underutilized capacity.
- High dependency on political advertising for yield growth, which may not be sustainable.
- Challenges in increasing pricing power due to industry concentration and competition.
- Future growth is uncertain due to the cyclical nature of the media industry and external environmental factors.
Q & A Highlights
Q: Can you deconstruct how you achieved 12% growth across various verticals and the 25% EBITDA growth?
A: Our growth is a mix of our core radio business and non-core areas like on-ground events, digital, and increased social media presence. We've built a diversified revenue stream that offsets any underperformance in radio with strong digital growth.
Q: Was there a value or yield growth for you in the last quarter?
A: Yes, we saw an 8% yield growth, largely driven by high-premium political ads. However, the majority of our revenue growth still comes from volume.
Q: How much of the 35% increase in government advertising is due to price revisions and how much is election-led?
A: Around INR7 crores of political advertising came in at higher prices. The central government ads were limited during this period due to political advertising.
Q: What is the average inventory utilization currently?
A: Our average inventory utilization stands at 71%.
Q: Can you discuss the potential and plans for SMINCO, your influencer marketing platform?
A: SMINCO aggregates around 40,000 influencers and offers brands a platform to select and engage influencers for marketing campaigns. The influencer marketing industry is projected to be worth INR3,300-3,600 crores in the next two years, presenting a significant opportunity for us.
Q: How has the JioTV partnership played out this quarter and what are the future expectations?
A: It's early days for monetization. Currently, we are focusing on content seeding and reach. We are working closely with JioTV to quickly move towards monetization.
Q: What are the effective ad rates compared to pre-COVID levels?
A: Our ad rates are about 90% of pre-COVID levels, with an 8% increase over the last year.
Q: What is the split of FCT (Free Commercial Time) and non-FCT revenue?
A: Non-FCT revenue, excluding digital, contributes approximately 25%.
Q: What has led to the sharp increase in margins despite modest yield growth and early teen volume growth?
A: The increase in margins is due to efficient cost management and leveraging in-house resources for our digital initiatives. Additionally, radio being a fixed-cost business, any revenue beyond a certain threshold directly impacts the bottom line.
Q: What should we expect for future margins?
A: We aim for a 30% margin, which we consider healthy given the complexities of the business. This is a realistic target in the current market scenario.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
