HT Media : Earnings Call Transcript Q1FY24

July 28, 2023

HT Media Group Q1 FY24 Earnings Conference Call

July 28, 2023

Management:	Mr. Piyush Gupta - Group CFO
	Mr. Pervez Bajan - Group Controller
	Ms. Anna Abraham - Head, Investor Relations

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	July 28, 2023
Aaditya Mulani:	Good afternoon, ladies and gentlemen. This is Aaditya Mulani from the
	HT Media Group. I would like to welcome you all to our Q1 financial year
	2023 -24 earnings webinar.
	As a reminder all participants will be in listen only mode. After we are
	through with the presentation, there will be an opportunity for you to ask
	questions. I now hand over to Ms. Anna Abraham - Head, Investor
	Relations. Thank you and over to you Anna.
Anna Abraham:	Thank you, Aaditya. A very good afternoon to everyone. On behalf of the
	HT Media Group I welcome you all to the earnings webinar, to discuss the
	financial results of the 1st quarter for Hindustan Media Ventures Limited,
	which was declared yesterday and of the HT Media Limited which was
	released earlier today. On the call with me today are Mr. Piyush Gupta -
	Group CFO, Mr. Pervez Bajan - Group Controller, and members of our
	Investor Relations team.
	We will be now starting our presentation. Hope it's visible to all of you.
	This presentation and the financial statements are available on stock
	exchange websites and the investor relations section of our Company
	website. On your screen now is slide no. 2, which captures a disclaimer
	regarding forward looking statements. As a practice, we do not provide
	specific revenue or earnings guidance. Kindly keep this in mind.
	Moving on, the next slide gives our Chairperson's comments on the
	performance of the company for the quarter, and I quote:
	"Overall, our performance in Q1 FY2023-24 has seen an improvement.
	While revenue is muted, profitability has expanded on the back of continued
	streamlining of costs and easing of commodity prices.
	Circulation and Advertising grew on a year-on-year basis in Print, while
	in Radio, non-FCT and value-added solutions drove the growth.
	Rising media spends by companies, growing consumer demand, more
	government spends, and relative easing in inflationary pressure, all augur
	well in the near-term for Print, Radio and Digital sectors of the M&E
	industry, which should benefit your Company. We are focused on working
	towards achieving profitable growth in our core businesses while
	expanding into new areas such as OTT.
	We remain committed to our journalism, while continuing to provide
	credible and insightful news & analysis, to our audiences."

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	July 28, 2023
	Moving on to the agenda for today on slide no. 4. We will begin the
	performance update with comments on our consolidated financials for the
	1st quarter. This will be followed by detailed remarks on Print, Radio and
	Digital businesses. We will open for Q&A. after the presentation concludes.
	With that I hand it over to Piyush.
Piyush Gupta:	Thanks, Aaditya, Thanks Anna. If we may just track the presentation. Our
	consolidated financial results, total revenue came at INR 445 crores a
	growth of 3%. EBITDA at INR 27 crores is a growth of 250+%, margins
	therefore, improved from a -4% to +6%. Our PBT came in at
	INR -21 crores, which is, however, an improvement of +68%. And PBT
	margins at a -5% from a -15% same period last year. Cash still remains a
	healthy INR 902 crores. Sequentially our revenues declined by 10%. And
	our PBT improved by 39% from INR -34 crore to INR -21 crores.
	Moving on, now on the Print business performance. Our Ad revenues came
	at INR 244 crores, which is a growth of 2%. Circulation revenue came at
	4% growth at INR 60 crores. Operating revenue was INR 324 crores, which
	is a decline of 7%. Operating EBITDA was flat versus the same period last
	year, at INR 2 crores with the margin at 1%. Primary reasons are given in
	the bottom of the chart. Ad revenue growth for the quarter basis y-o-y, is
	supported by better ad volumes, so the volumes have come to a pre-
	pandemic level. Circulation revenue rose on a y-o-y and q-o-q basis owing
	to healthy realizations per copy. Overall operating revenue saw a decline
	on account of one-off in other operating income in the base year and
	operating EBITDA was marginally positive.
	Having a quick look at our English business. Our Ad revenues on a y-o-y
	basis grew 2% from INR 127 crores to INR 130 crores. On a q-o-q basis
	they came down 16% to INR 130 crores. Circulation revenue on a y-o-y
	basis was up 53% because of active realization per copy actions and on a
	on q-o-q basis they were flat to a marginal decline of 2%. Circulation
	revenue improved y-o-y due to improvement in our realization for copy and
	Ad revenue grew on y-o-y basis, as categories such as education, retail, real
	estate grew while FMCG, Auto remains subdued.
	A quick look at our Hindi business. Our Ad revenues were up 2% at
	INR 115 crores. And on a q-o-q basis they were flat at about INR 115 crores
	versus INR 116 crores last quarter. Circulation revenues on a y-o-y basis
	were down 6%. On a q-o-q basis they were up 2%. And key highlights for

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	the quarter, ad revenues grew y-o-y primarily supported by higher ad
	volumes. On a y-o-y basis, category such as retail education, auto,
	healthcare grew while real estate and BFSI were subdued. Circulation
	revenue saw growth on q-o-q basis backed by higher copies.
	Radio, our operating revenue grew by 4% and came in at INR 35 crores
	and operating EBITDA was virtually flat at about INR 2 crores. Margins
	remained flat at 6%. On a sequential basis it's a 5% decline on operating
	revenue and operating EBITDA it's a 182% growth. Key revenue growth
	on y-o-y basis, is led by non FCT segments, which is basically on air and
	on ground events and various other integrations with the on-air activities.
	Operating EBITDA has improved from same quarter last year.
	The Digital segment operating revenues came in at INR 36 crores, which is
	a decline of 9% and operating EBITDA at INR -17 crores, which is a
	decline of 101%. Operating EBITDA margin came in at -48% as against
	-22% same period last year. On key highlights, q-o-q revenue growth with
	improvement across all business segments in Digital and increase in
	EBITDA losses owing to investment in new businesses.
	With that we come to the end of the presentation. I hand it over back to
	Aaditya.
Aaditya Mulani:	Thank you Piyush. We will now begin the Q&A session. You can click on
	the raise hand option which will enable the moderator to unmute you for
	posing your query. Please introduce yourself before posing your query, and
	kindly restrict to a maximum of 2 questions per participant, so that we may
	be able to address questions from all participants. We will wait for a few
	moments while the question queue assembles.
Aaditya Mulani:	The first question is from the line of Kaustav. Please introduce yourself
	and ask you question
Kaustav Bubna:	I'm from BMSPL. It's a family office. So, I have a few questions regarding
	Hindustan Media Ventures business. So, you know your cost of goods sold
	has moved up from about 32% in FY21 to 44% in FY23. Now, the global
	pulp prices are coming down. So, I wanted to really understand, could you
	explain to us how sustainable this trend is from how you all are seeing it on
	global pulp prices coming down. And also, how much inventory? What is
	the inventory days for you? How much inventory do you hold of high cost

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	paper already? And so basically, what I wanted to understand was, how do
	you see gross margins going into FY24? And then the second part of the
	question is, you know, we are going into election year. So, since FY24 is
	you know, we're getting closer to elections. How do you see in this Print
	business revenue growth, you know, in terms of circulation and
	advertisement revenue?
Piyush Gupta:	Right. Well Kaustav on the first part we definitely see the gross margins
	expanding from here on. The pulp prices and the newsprint prices have been
	now coming down for like 3-4 months and we don't go very long in a
	commodity cycle which is coming down. We don't stock very long
	inventory, but you know, our inventory prices will, in production, start
	coming down now, so you will see the margin expanding from here on, and
	we are not sitting on a very long inventory pile as well. So that's point
	number one. On the election year, of course you know there will be election
	revenues, which will come. And I think right from the festive season, which
	will start let's say, in late September, October right up to election, I believe
	the revenue outlook should be reasonably buoyant.
Kaustav Bubna:	Fair enough, you know I understand all these points you mentioned but the
	main and I know you don't give guidance, but could you give some sort of
	you know indication as to how can we get back to these high single digit
	EBITDA margins, not including other income.
Piyush Gupta:	Only 2 things Kaustav. So, let me okay, so let's brainstorm this. You are
	absolutely right, I think it's a great question. So, one is obviously the
	commodity prices. Now newsprint you know, depending on the price of the
	newsprint, it constitutes anywhere between 30% to 40% of the bill of
	materials depending on what the commodity prices are. As it is coming
	down, obviously it will expand the margin. The only other thing is which
	I've been highlighting on the calls earlier is the pricing. Now, as you are
	aware that the volumes have come back. If you look at the industry volumes
	in Hindi, in languages, in English, most of the volumes are now back to
	pre-pandemic level. But, however, the pricing is still a challenge. I mean
	depending on market to market, you know, in some markets pricing is as
	low as 65% to 70%. Whereas in other markets it's 80% to 85%. We've
	started a very aggressive pricing program. But, as you can understand,
	pricing is a competitive activity in the marketplace. But we are very hopeful
	from now to the balance of this calendar year itself, you know, we should

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