Ladies and gentlemen, good day, and welcome to the Entertainment Network (India) Limited Q1 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phones. Please note that this conference is being recorded. I now hand the conference over to Ms. Runjhun Jain. Thank you, and over to you, ma'am.
Thank you, Nidhi. Good afternoon, everyone. To take you through the results and answer your questions today, we have the management team from the company represented by Mr. Yatish Mehrishi, Chief Executive Officer, and Mr. Sanjay Ballabh, Chief Financial Officer. Please note that the financial results and the presentation have been uploaded on the company's website and on exchanges. Should you need any further information, you can get in touch with us at EY. Before we begin, I would like you to remind that today's discussion might include forward-looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. The company undertakes no obligation to update these statements after today's call whatsoever. With that said, I will hand over to Mr. Yatish.
Thank you, Runjhun. Good evening, ladies and gentlemen. On behalf of ENIL, I extend a warm welcome to our Q1 FY 2026 earnings call. We announced our results yesterday, and I trust you had an opportunity to review them. I would now like to walk you through the key highlights and provide context around our performance. During the quarter, we recorded domestic revenue of INR 113 crores, representing a year-on-year growth of 3.2%. This growth was primarily driven by strong performance of our non-FCT and Digital segments, which grew by 33% and 41.2% respectively on a year-on-year basis. EBITDA stood at INR 6.2 crores, registering a year-on-year growth of 3.6%, reflecting continuous focus on profitability. The EBITDA excluding Digital stood at INR 16 crores with a margin at 17.5%. Tax for the quarter was INR 1 crore.
Our international operations concluded to be EBITDA positive and contributing INR 4.1 crores in revenue for the quarter. The company continues to maintain a robust balance sheet with a cash balance of INR 336 crores as of June 30, 2025. Turning now on the performance of our key segments. Let me start with Radio. The Radio advertising segment delivered subdued results during the quarter, with a revenue of INR 66.1 crores, a decline of 12.1% year on year. This was primarily due to a high base in the previous year, and you would remember the significant political advertising ahead of the general elections last year. Additionally, the geopolitical situation during the quarter also led to headwinds in the FCT business.
In spite of that, we continue to be better positioned than many of our peers with a strong 25.4% volume share in the Radio FCT segment. We remain optimistic about the coming quarters and expect a modest growth in the Radio business over the remainder of FY 2026. Coming to our non-FCT segment. The non-FCT segment stood at INR 25.2 crores, reflecting a strong year-on-year growth of 33%, supported by a healthy EBITDA margin of 43.4%. Moving to our Digital business. In this quarter, Digital revenues stood at INR 21.7 crores, contributing almost a record 40.7% of total radio revenues, up from last year of 24.8%. This growth demonstrates the continued strength of the Gaana platform and with user adoption and engagement remaining robust despite our revised pricing, which we took last year.
Notably, Digital investments declined to INR 9.8 crores from the last year number of INR 14.2 crores, in line with our guidance during the previous quarters about improving our marketing and operational efficiency. With this, I will hand over the call to the moderator and look forward to your questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Khushi Sen from Individual Investor.
Hello, everybody. Thank you for this opportunity. May I please know the Gaana revenue for this quarter?
The Gaana revenue for this quarter is almost about INR 18 crores.
What is its year-on-year growth?
84%. Give me one second.
What?
Give me one second. 87.6%.
Okay. This is just to confirm that last year, same quarter, the Gaana revenue was roughly around INR 10 crores, right?
Yes, INR 9.57 crores.
Okay. The other question is in investor presentation, you have given us an FCT state of INR 251.9 million. What is the FCT revenue for the quarter?
FCT revenue is INR 66 crores.
INR 66 crores. Also, I want to know what is the market share for the quarter.
I spoke about 25% on volume basis.
25%. What is the volume growth then for this quarter?
The volume growth has been about 3%.
All right. Okay. What is the overall inventory utilization that the company has?
It is around in the range of 70%.
17%?
70%.
70%.
Range of 70%-75%.
Okay. All right. Lastly, I just wanted to know what is the effective rate year-on-year? Effective growth.
On quarter-on-quarter, we don't look at it because last year there was a lot of elections and government spends. Government and election, you would know, comes at a higher price. This year, with that not being there, it cannot be a like-to-like comparison.
Okay. Could you please tell me for the pre-COVID levels as compared to now?
The ERs still are subdued to pre-COVID level. It should be about 25% lower than the pre-COVID levels.
Okay. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touch-tone telephone. The next question is from the line of Shikhar Mundra from Vivog Commercial Limited. Please go ahead.
Hi. For Gaana, how many of our subscribers are on the old pricing regime and how many are on the new pricing regime as of now?
Shikhar, the way right now we look at is on a gross margin positive. I would not put a number, but gross margin positive numbers would be almost more than 50%.
What do you mean by gross margin positive? Can you explain?
I had spoken about earlier also, the earlier price of INR 299 was a loss-making price. It was not feasible for us to do it. The people who are on INR 299 will be a loss-making proposition. They will churn out and come to the new pricing.
Okay. But now this quarter, I want to know how many of these people who are on INR 299 got their subscription over, and out of which, how many renewed their subscriptions? If you cannot give me exact numbers, maybe give me a percentage, like maybe X amount of people had their subscription-
The way I would look at it, Shikhar, it's too detailing it out. Maybe if you want, we can have a one-on-one call on this. But to give you a perspective, our net adds increased by upwards of 25%.
The net increased by 25%? Sorry.
The net subscription increased by 25%.
Okay. But that's a mix of new subscribers versus the old one who are-
Yes. People will churn out. There will be new guys coming in. There will be new trials coming in. It will churn out. I have not been positioned to detail out at each pricing level in this call.
Okay.
Very happy to have a separate chat on it. But overall, as I said, our net adds have increased almost by about 25%.
Okay. And this is quarter-on-quarter, right?
This is quarter on quarter.
Okay. And we are seeing a similar trend in this coming quarter Q2 also?
The way we look at it, the way we took the business and we went paid, sometimes in one of the quarters, you will see a little less growth. I would look at not every quarter unlike all digital businesses. At a yearly level, we expect this level of growth to continue.
Okay.
Because some quarters, because when you started the business, a lot of people went paid. The churn is also a little higher on those quarters. Maybe sometimes the net adds can be lower. But at an annual level, it is safe to say it could be about 25%.
Okay. And INR 18 crores quarterly. What was the cash burn this quarter for Gaana?
As I said, on a total digital level, it is about INR 9 crores against INR 9.8 crores against last year of INR 14 crores.
Okay. Digital was INR 9.8 crore. What would be the break-even level for Gaana to be EBITDA positive?
The way I would look at it is, we believe, and I have been speaking in the last investor calls also, we believe early next year, similar time, we could be breaking even.
Okay. Early next year, assuming this kind of run rate, we are estimating maybe a revenue of INR 150 crore annually is good enough for it to break even. Is this right understanding?
Yeah, it is a mix of both because it depends on how the subscriber grows. Plus, as we speak, we have a pricing hedge also right now. If you look at, we increased price from INR 299 to INR 599 while competitors are little higher. There is still a little bit headspace available. We keep testing it out because depending on the subscriber growth and the value. But yes, at INR 150 crore revenue, if we do, it should break even. But as I speak, as I said, it could be a mix of both subscriber growth and the pricing also.
Okay. Can you help me with the cost structure? How should I look at it? There will be some variable cost and there is some fixed cost. Can you explain me the cost structure?
See any digital business in music streaming purely there is a content cost and then there is the tech cost other than the people cost. These are the three main cost elements which are there, which keeps improving over a period of time. As I said, if INR 299 customers, it is not a feasible price, but the content cost is high. As it keeps churning out INR 299 customer, the percentage cost of content also keeps coming down. Safe to say, cost of content we would expect to be at a good level at 65%. Right now, it is not. That could be our aim, to get the content cost at about 60%-65%.
60%-65% at a good level. When you say good level, can I assume a baseline levels you mean?
Yeah.
Okay. What will be the people cost for this? Which I believe that might not go up even when we scale up the revenues.
Yeah, generally it doesn't. But if you look at some tech built up, it can happen if we want to improve our some tech products and all. With AI coming in, we look at more efficiencies also. So on natural increments, HR costs can go up, but not much. We will try to leverage that, and still, as I said, for us it is a agency business because we have a large content team with the Radio business also, which can also be utilized for this fee.
Okay. So can we put a number to these costs for this quarter, content, tech, and people cost?
I would not want to do that on the call right now. Sorry.
Okay.
Yeah.
All right. Sure. And for the traditional business, what kind of recovery are we seeing this quarter, or things are remaining as it is? Or do you have any optimism, or are we hopeful of some better numbers coming?
See, the way I look at it, Shikhar, last year, if you look at second half, media industry has had lot of headwinds since last year H2. There will be a base effect coming in. Monsoons, though look erratic, but there has still been better monsoons than last year. Festive, only determinant is festive is little earlier, so it will be difficult to compare over last year and this year because this year, large festive happens in the quarter two against last year of quarter three. But I think quarter three and quarter four, we believe there will be a base effect which will lead to growth.
Okay. What about the cash balance of INR 350 crore? How do we plan to use it? Because it has been a long time, we have been patiently sitting as shareholders, not been able to create value. I understand the headwind in the industry, but somewhere we will have to. How do we use the cash balance and how do we think about creating value for shareholders?
One thing is, Shikhar, we have been very consistent on dividend, even during COVID times also. We have been increasing and though marginal increase, but over last two years, you would have seen we have been very consistent on dividend and have increased that. Also, we keep evaluating different new businesses also as you look at with AI impacting, not just media industry, but all industries. So we keep looking at new opportunities to see if we can look at new avenues while as we stabilize Gaana business and then also start looking at the newer media businesses also.
Okay. Got it. But nothing material on card as of now, I mean, for acquisitions?
Even if it was, I would put it on this. I cannot put it on here.
All right.
I would put it on the semi. I will do a proper disclosure if there was something. We keep evaluating, we keep discussing, but there is nothing material right now.
Got it. All right. Thank you.
Thank you, Shikhar.
Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Vipul Shah from INPact Wealth Advisors. Please go ahead.
Hi, good afternoon, Yatish ji.
Hi, Vipul.
Can you hear me? Yeah, hi.
Yes. Good afternoon.
I wanted to check, last when we discussed in the last quarter, the Digital revenues, especially the Gaana revenues, were roughly around INR 18 crores, which means that on a quarter-on-quarter basis, there is no growth. Is that a right way to look at it?
No, I don't think. Just give me one second.
Yeah. Okay.
Because you would have seen overall Digital also. Give one second, Vipul.
Yeah, sure.
Last quarter it was about INR 14.6 crores, now it is INR 17.95 crores. What you're looking at is the overall Digital revenues and not Gaana revenues. What ATU revenue says.
Yes, my mistake. How do you see, based on whatever between last quarter and current quarter, the kind of visibility you are seeing, you still feel fairly confident that, and you just mentioned also that by this time next quarter, next year, you would be able to break even on Gaana? That visibility looks for sure?
Yeah. So far on course, Vipul. I cannot give, but
Maximum
as for our workings and as for the way we are looking at our efficiencies and business, we believe we should be able to do that.
Fair enough. Okay, fine. That is from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Rahul Goenka from Oasis Ventures PL. Please go ahead.
Yeah. Hi. I just wanted to ask you that, does Gaana have any cost-competitive advantages compared to its rivals because of its radio presence? And, basically, Gaana, Radio Mirchi has been operating a lot in the regional spaces where the other rivals have not been able to have such a strong hold. So does that pose as an advantage to Gaana in the future?
Rahul, it's a good question, and that's always been the premise for us when we took over Gaana business also. And you rightly pointed out, Mirchi has been the one where discovery of music happened over the last two decades. Before even digital came in, people would discover music on radio, and Mirchi being the largest and the leader in that place, has always been where people discovered music, and we curate the best music for people, the playlist and all. And with our presence in 63 markets, yes, it's a massive competitive advantage, not just from a marketing and media muscle that we can promote Gaana in all these markets, but because we understand the nuances of each market and each language. And you would know that India changes every 40 km- 50 km, both on food, music, taste.
We understand, and that is where we are able to customize and target individuals at those levels. Those learnings surely help us deliver this business better than our competition. As an aggregate, if you look at it, most of the music streaming services, the head of music have all been Mirchi guys. For us, we understand this space really well. With Gaana, our event business, and the Radio business, we are really, really well-placed in the audio segment, audio entertainment segment for the country.
What about your rivals? Has Wynk closed down as yet? I believe YouTube Music and all, they've got massive budgets, and people are, what do you call, kind of elevating to them because they have the, what do you call, videos to go along with it. Does Gaana also provide that or they just provide the music?
Rahul, the way we look at it, our businesses on Gaana, we are a paid service, while YouTube and Spotify First of all, Wynk has closed down. Wynk has closed down, Hungama has closed down, Resso has closed down. There are very less players now. At one point of time, there were nine music streaming services. Most of the, and it's been now very clearly seen, that if you run only a free service, it's not a viable business. Paid subscription is the way to go, and globally also, if you look at Spotify numbers, it's always been paid subscription which drives profitability and numbers. From that perspective, we believe a paid subscription is a business to go for. Earlier also, if you look at when we were kids or when we were college guys, we used to buy music.
It's just that when free streaming happened, people stopped buying. As music gets not available free, people will go back. You would remember that a "Kabhi Khushi Kabhie Gham" CD you would have bought at about INR 300, INR 400 also. In today's time, you're able to provide INR 600 or INR 700, a yearly subscription with million songs across the universe at a touch of a button. There's massive convenience. The entire catalog is available. The best playlisting is available. There's a lot of value which is being given to people. From a competition point of view, the way we look at it, there's massive headroom available for subscription. India, there are almost about 200 million free music subscribers, but only about 10 million-12 million are paying subscribers.
If you look at the EY last report, which came in during the FICCI FRAMES in March, only about 10 million-12 million pay. There is massive headroom. You can always be pinching that by only 10 million-12 million pay. There is a behavior change required. I think, and I am very optimistic that is the way to go, and that is the headroom available. There is behavior where people are streaming music online. Which is a good thing because people are streaming. Over a period, people will tend to pay, and it is still a lot of headroom available. Everybody can grow. It is not about just us. YouTube, Spotify can grow because there is so much audience available for you to attract your own subscribers. As you mentioned, we understand the tier two, tier three market or the regional market well.
Just to give you a number, 65% of our users come from tier two, tier three markets.
Okay. Do you all pose a threat like YouTube Music if somebody wants to watch something free, so they can get some live streaming of some songs free of charge, while as you all guys are charging INR 500-INR 600.
Yeah.
Does that pose as a competition or not really?
That would always-
segment.
See, from that point of view, even Radio Mirchi is a competition because there also music is freely available, but ads play. Similarly on YouTube also, music is available, ads play. Now, if a consumer wants to have music which is without any ads and wants to have so much of music available, then it doesn't matter to us. I'm just saying, being YouTube or being Spotify or being radio also. Because everything is available free in this, and that's where the change is happening. But if you look at why people move to streaming is largely because ads has always been a deterrent. With YouTube also, there's more ads coming in and they're also pushing their premium product. We believe the market will also move towards subscription.
If you look at Spotify or YouTube, both are pushing subscription and asking people to pay rather than giving free, because on a free product, you'll have restrictions on playlisting, backgrounding is not available. So there are a lot of restrictions on the free product also. The experience is not so great. I'm not saying all 200 million will start paying in the next six months or one year. But even if the numbers just jump up to a double in next two, three years, every business will become very, very profitable and a good business to be in. And that headroom is available.
What I was also, on ChatGPT, what I found that YouTube Music has invested close to INR 21,000 crores in the last two, three years. Is that figure you think a correct figure or you would not like to comment?
It would be global. Plus, YouTube is a platform where label puts their content and when ads play, they have to give money back to labels or any content. It is a global number. That business, I would not be in the position also to comment on it, but whatever we read and whatever our sources say, it is a global spend for it and not just India. It is not about just music, it is about all content.
Okay. Thanks a ton for your valuable information and clarification.
Thank you, Rahul.
Yeah, bye.
Bye.
Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one on their touch-tone telephone. A reminder to the participants, anyone who wishes to ask a question, please press star and one on their touch-tone telephone. The next question is from the line of Anant Shirgaonkar from Newport Capital. Please go ahead.
Hi, can you hear me?
Yes, Anant. Hi, how are you?
I am very good, Yatish. How are things?
Good, Anant. Thank you.
Yatish, can you just give some color on the events business, how the quarter went and how is the year looking going ahead and what is the sustainable growth rate you expect for the events business?
Event business, just the event business, because we do solutions, but if you look at just pure event business, what we call the IP events, for us, this quarter grew almost about 58%. I would have loved more growth had the war, geopolitical situation not happened where we had to cancel a lot of events. If that had not happened, the growth would have been little higher. Having said that, quarter two also and in the coming quarters also, we believe our event business will see massive growth. In this case, we are not talking about percentage growth. We could be actually almost doubling revenues also. That's the tailwinds we see in the experiential business. So hoping for a very I'm very optimistic on the growth in the event business.
Right. How do you see this playing out over the next few years? Do you think this is more sustainable? Because already I heard that you're doing 50+ marathons and you're doing lot of concerts and festive events and stuff. So how much can this grow? Or you can keep going interlands tier two, tier three, and the demand for events just keeps on growing year after year. How do you see this playing out?
I think event business on its own can match up the ad business because there are so much tailwinds available that people are-- we are looking at it as a behavior change in consumer, where people are spending money on experiential. They want to go out. There is massive investment coming from District and BookMyShow also when you look at, how do you make people move out and there is incentive available. Plus, if you look at the music scene, food, everything is looking very, very different post-COVID. That's a massive change which has happened, and we believe that is here to continue. The new generation believes in you live only once, and they want to spend money on experience and not on holding assets. They want to experience life.
If you look at, be it a Wimbledon type of event also, you would have seen so many influencers and everybody talking about it. It's no longer just a sports event. It's become a more fashion event also. That's the amalgamation of events, entertainment, sports, music coming together and people wanting to go out and experience, is leading to the tailwinds to drive this business. Because we have been in this business for last more than a decade, and with our presence in 63 markets, we believe we are well-positioned to leverage this. It comes with a little less margin compared to the Radio business. When you see lot of tailwinds in any industry, lot of players get into it.
In a shorter period, there could be some pressure on margins also because lot of people would want to just take some business from you by quoting a lower margin. But that happens because then the quality, you can lose a business once, but not every time. That's what we have seen in the last 10 years. With our equity in the market, with our presence, our client relationship, I think we are well-placed for growth and profitability.
Right. I would believe ROCE would be very high for this because investment is going to be very low. Is that a fair comment?
Yeah. It's a people-driven thing and because lot of cost becomes variable, but it's a people-intensive business. As much as I would like to do 63 markets, it will require teams in these markets, and these are specialist people. This is not like I can tomorrow send my radio sales guy to execute the event. The execution of the event is very different. But from a CapEx point of view, there is no investment.
Right. As far as what I have seen from this quarterly result is, you've got events business, which you said has grown at 68%, and you've got Gaana business, which has again shown a healthy growth. If you add the revenues for both events and Gaana, then as per what I have done, they exceed the Radio revenues. Is that a fair comment?
Not really as of now. That's our aim. I think by year-end, we should be looking at a 50/50, if not less for radio. But as of today, it's almost about 58% Radio, and it is as per our plan. Because generally, events is a very H2 heavy calendar. H1 is not as heavy as H2 because events starts post the rains. A lot of on-ground events start post-rains, and that's the reason H1 is little muted when you look at event business. But Gaana is more linear, while events will be very H2 heavy.
Correct. Just extending your comment here, if you say that by year-end, Gaana plus events exceed Radio, and given that Gaana and events both are showing so much of a healthy growth, then going forward next two, three, four years, R adio should become smaller and smaller part of ENIL, whereas the high-growth businesses would start dominating the top line.
That's the aim, I think. That's what you're calling my KPIs very clearly. That's what we're looking at transforming this company from just being a radio company to a multimedia company what's true to the name of Entertainment Network and not just be FM radio.
Fantastic. All the best to you, Yatish.
Thank you.
Thank you so much. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touch-tone telephone. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you, Nidhi. Thank you, ladies and gentlemen. It is a pleasure to have you all. We remain committed to drive profitable growth and returns for our shareholders. Thank you once again for joining this call. Thank you very much. Have a good day.
Thank you very much. On behalf of Entertainment Network (India) Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.