Ladies and gentlemen, good day and welcome to Entertainment Network (India) Limited Q4 and FY 2024 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Runjhun Jain from EY Investor Relations. Thank you, and over to you, Ms. Jain.
Thank you, Sagar. Good morning, everyone. Welcome to the Q4 and FY 2024 earnings call of Entertainment Network (India) Limited. To take you through the results and answer your questions today, we have management team from the company here represented by Mr. Yatish Mehrishi, Chief Executive Officer, and Mr. Sanjay Ballabh, Chief Financial Officer. The financial results and the presentations have been uploaded on the company's website and on the exchanges. Should you need any further information, you can reach out to us at EY IR team. Before we proceed with this call, a disclaimer. Please do note that anything said on this call during the course of the introduction and in the document, which reflects the outlook towards the future or should be considered as a certain forward-looking statement, must be viewed in conjunction with the risks that the company faces and may not be updated from time to time.
With that said, I will hand over to Mr. Yatish.
Thank you, Runjhun. Good morning, ladies and gentlemen. On behalf of Entertainment Network (India) Limited, I extend a warm welcome to all of you for joining our quarter four and FY 2024 earnings call. First of all, thank you for joining us on a Saturday. I trust you had the opportunity to review our financial results. Please allow me to provide a brief overview of the same. I am delighted to share that our strong performance continues during the quarter four FY 2024 as well. The results reflect our consistent effort towards growing the business profitably. Before we move into financial specifics, I would like to highlight that as per Ind AS 103, Business Combinations, our financial information for comparative periods has been restated to incorporate results from the earlier period of the acquired business. The impact of this restatement is detailed in note number six of Regulation 33 disclosure.
To help our investors understand, we have included a condensed statement of operations in our investor presentation prior to the restatement. During the quarter, our overall top line registered a strong growth of 42.4% year-on-year at INR 149.3 crores, solidifying our commitment to innovation and customer needs. Both our segments, FCT and non-FCT, reported a robust growth of 26.4% and 48.1% respectively. EBITDA for the quarter, excluding the digital and Gaana business, stood at INR 36 crores as compared to INR 23 crores in the previous year. This is translating to EBITDA margin of 27% for the quarter, which is an improvement by 400 basis points year-on-year. FCT segment continues to exceed industry benchmarks underscoring our leadership position both in volume and value.
In the quarter, our volume market share rose to 25.9%, marking a significant improvement of 190 basis points year-on-year. The non-FCT segment observed a commendable 48.1% growth in quarter, buoyed by the return of our marquee owned properties like SBI Green Marathon, Spell Bee, and others. Alongside revenue growth, we achieved impressive gross profit margin of 39.1% and an EBITDA margin of 25.5% in the non-FCT business. Regarding FY 2024 figures at a full year level, the company achieved a consolidated revenue of almost INR 500 crores. For our domestic operations, excluding digital and Gaana, our revenue stood at INR 453.7 crores in the year compared to INR 412.6 in the previous year.
Furthermore, in FY 2024, we reported an EBITDA margin of 27.6%, marking an improvement of approximately 500 basis points from the previous year. Additionally, at the full year level, our non-FCT business maintained a gross profit margin of 47.6% and an EBITDA margin of 33.6%. The strong top-line growth and substantial improvement in EBITDA led to a remarkable boost in the PAT, which has moved from INR 23.1 crores in the quarter FY 2024 from INR 17.3 in the quarter four FY 2023. Post-COVID, for the first time, we have reported net profit in all quarters, which has led to remarkable improvement in the PAT during the financial year 2024 at INR 50.6 crores from INR 2.34 crores in FY 2023.
Regarding our digital endeavors, we have significantly bolstered our efforts following the acquisition of Gaana. In the quarter FY 2024, our digital revenues amounted to INR 20.3 crores, representing almost 24.4% of our radio revenues. Throughout FY 2024, our digital revenues totaled INR 47 crores, accounting for 15.3% of our radio revenues. We are actively working towards making ENIL a complete media entertainment company from just being a radio company. Another heartening development is that our international market turned positive during FY 2024 and reported an EBITDA of INR 3.3 crores. I am also happy to announce that our board of directors has proposed a dividend of INR 1.5 per share. In conclusion, our primary objective remains maximization of shareholder value on the back of sustainable growth and profitability. With that, I would like to invite any questions you may have.
Thank you very much.
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 touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, participants, if you wish to ask questions, please press star and one. The first question is from the line of Sunit Majumdar from Elara Capital. Please go ahead.
Hello.
Hi. Hello.
Hi. Yeah. Thank you for the opportunity. So I had a two-part question. Firstly, could you share how much was the revenue for Gaana in Q4 FY 2024 and in FY 2024 overall? And secondly, where is the revenue being reported, in which segment is the Gaana revenue?
Okay. Do we answer this, or you have another question also, Sunit?
No, I am done.
As we said in the last meeting, we acquired Gaana only in December, so it is a four-month revenue. Our four-month revenue clocks about INR 12.83 crore and it is reported as part of the digital segment.
Okay. Yeah. Okay. Got it. Thank you.
Thank you.
Thank you. The next question is from the line of Prashant Apshinde, who is an individual investor. Please go ahead.
Good morning. This is Prashant. Could you elaborate about the Saudi plan in more detail? Also, what is the company's policy going forward for the digital revenue? Do you have any specific plan for digital revenue to increase? Please elaborate on this.
As I understood you, the first question was you wanted to know about the Saudi plan, and the second was on the digital plan, correct?
Yes.
On the Saudi plans, we have got into a partnership with one of our partners there, who has acquired radio licenses. We are in the midst of now evaluating and running the stations there. We are setting up radio stations in Saudi Arabia. The way we look at it, Saudi Arabia is one of the largest economies which will grow in the next few years, and we are very excited about it. Not just from radio revenues, but if you look at ENIL's business, it is not just radio. We are very excited about radio, events, and digital business there. It is in the initial stages. As we go along in the coming quarters, we will have more detailed discussion on Saudi. We have yet to sign.
We have done a first level of interest with the Saudi partner, where we believe as a business, as entertainment business in Saudi looks very exciting. We are very keen about it. In the coming quarters, we will be able to share much more information on the Saudi operation. Having said that, as I said, it is a very exciting market to be in. We look forward for that market penetration. On the digital side, our commitment to transform ENIL from just being a radio company to a multimedia company remains steadfast. In that line, if you look at, we acquired Gaana, which is a music streaming service. We have been very careful about that. We are very sincere about how do we look at the business, and as I said, our commitment is always profitable growth.
For Gaana, the way we look at it is going to be a pure subscription service and not a free service. Coming from two decades of music curation experience in this country, ENIL has been the foremost player who curated music and played music, where people discovered music in India. From being a terrestrial radio company and also having an online presence on music, we are in the best available space to garner more share and garner more and more share of the audio entertainment space in India. From a perspective of digital, we have multi-fold strategies. One is acquisition of Gaana, which has led to playing music online, and it is a pure play subscription business. The other is we also believe our influencer marketing and our Mirchi Plus social media assets, which also helps us in driving our digital growth.
The way we look at our strength of 300 content people across the country, where we understand nuances of different parts of the country, and we understand languages also, and our content people across the market helps us to devise new and new content strategy, which is pure digital-led and acquire revenues for it. From a perspective, it is a mix on digital, both on video content and music streaming service. Does that answer, Prashant?
Prashant, sir?
Yeah. Thank you very much. Thanks.
Thank you. A reminder to all the participants, if you have questions, please press star and one. The next question is from the line of Sneha Jain from SKS Capital. Please go ahead.
Hi. Thank you for the opportunity. I just wanted to ask, what would be the future growth drivers for the industry? Which segments are we looking from real estate? We will see a decline in the government advertising, so what do you think is the trend going to be in the coming near-term future?
Thanks, Sneha. Sneha, I understand you meant only the business of radio, correct?
Yeah.
Yes, you are right. Government spends increase prior to the central elections, but that is from a central government point of view. We believe the state governments are also active and the way elections are happening across the year. If you look at this year, you will have Maharashtra elections and other state elections also coming in, and all state governments now spend. Yes, there will be some drop from the way a central government spends money in the last year of election compared to a first year after election. There will be some drop in it. But I believe there will be some bit of compensation from the state governments also. Coming to other categories, we are very buoyant about real estate, BFSI, a couple of categories which are very active.
As we have been telling you in the last four quarters, radio business has moved towards more on the retail side than corporate. The storefront business has also increased. The contribution of retail clients has now increased to almost 65%. Good part about radio industry is it has never been dependent on one specific category. Our biggest category has never been more than 10% or 12%. Even if the way we look at India as the case recovery and all, there are some sectors which will always keep firing for the radio industry. I do not see any reason for worry on the growth part. Only thing is it is going to be a volume-led growth rather than what you would have ideally desired to be a price-led growth. We have enough headroom available for volume to grow, and we have been increasing our market share.
Being leaders, we are best placed to garner more market share also, and also look very positive about the growth in the radio industry.
That helps. Except for radio, what do you think would be the other growth drivers for the company?
Multiple things. If you look at our non-FCT business, it is generally very H2 specific. The events, activation business, which is generally very heavy on the second half of the year. You would have seen our quarter three and quarter four results. We have done really well. We remain very optimistic. All the reports suggest the events activation business will outgrow the traditional medium growth. We do almost about 250 events in a year. We are very positive and optimistic of the event business, but that has a skew towards the H2. If you look at a full year basis, yes, the event and activation business is also one big lever where we believe there will be lot of growth opportunities for us.
The event business would be around approximately 10%-12% growth that you are seeing?
Yeah, easily of that part.
Okay. That's it.
It will outgrow the traditional medium growth.
All right. Got it. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Ketan Athavale from Robo Capital. Please go ahead.
Hello, sir. Thank you for the opportunity. I wanted to know a bit more on the radio yield part. How were the yields in this quarter and when do we expect them to recover? Secondly, I also wanted the revenue and margin guidance for FY 2025 and FY 2026.
Okay. Thanks, Ketan, for the question. The yield has improved this quarter, but that has been largely driven by the political advertisement and some government advertisement. Unfortunately, we believe, the yields will face. Good part is that it is not further dropping, so it is now stabilized at a level over the last four quarters, and we believe same thing will continue for the next two quarters, which is quarter one and quarter two. We see some price hike happening in the festival period. Generally, media pricing, it is a supply and demand case. The pricing yields will depend on that. We believe some bit of pricing hike happening in the second half of the year. In the first two quarters, we do not believe there will be much price change. It is generally slow quarter in the first half of the year. That is one part.
Coming to our second question on guidance, we generally do not give guidance, but you can look at from our four quarters, we have been very focused on profitable growth, and we have been improving our margins quarter- on- quarter. If you look at FY 2023 versus FY 2024, our margins have improved. Our constant endeavor towards the team has always been gunning for profitable growth and not just play money growth. That objective will always remain for us. As we do our existing business of radio event, and multimedia solutions, and while we drive growth from our digital endeavor of Gaana and other digital opportunities.
Okay, sir. Thank you.
Thank you. The next question is from the line of Shikhar Mundra from Vivog Commercial Limited. Please go ahead.
Sure. I want to understand this quarter, how would you see your capacity utilizations of radio stations currently?
Thanks, Shikhar. See, the way we look at, we are well-placed. We have enough radio inventory available compared to any of our radio competition. We are right now at an average of 10- minute of inventory in the peak season also. So we have enough and more room available for volume growth compared to any of the players. Because as a premium player and as a leader, we have always been cognizant of the FCT versus the music play out, and that's the reason, over the two decades, we have always believed in playing the right amount of inventory. Unfortunately, because of the volume-led growth, there is some bit of yield volume available, and that's the reason we are in the best space.
We believe other radio players have already maxed out on inventory, and that is the reason it will play out in the H2 also, where we see some price growth also happening because of that reason. But having said that, your company, ENIL, has enough volume headroom available for growth.
Okay. What kind of growth are we looking for, like FY 2025 in this traditional radio business, the volume growth, and how much price growth we are expecting?
Shikhar, as I said, we do not give any guidance. But if you look at from a market, the way the Indian economy looks like, we are very optimistic about the growth, both on radio, both on FCT and our non-FCT business. We remain very optimistic of the growth. Traditional media will also have a head over. Everybody was saying, this year, traditional media will not grow, but if you have seen the growth, we have delivered a 10% growth on FCT also this year. So we remain very optimistic of the India story, the consumption story across the market, and that what we believe in.
So in this quarter, how much of this incremental growth came because of elections, and how much came from the part of the business not related to the elections, the advertising?
Elections was very few because the election got announced only in the end of March, so there were only some bit of elections in the quarter. Largely, it was driven by government business in a way to contribute about almost 27%-28% of our revenues. That happens in any preceding quarter of elections, generally. It is not that the other business was not coming in because we cap inventory, so we take the right business, and as election and government inventory comes at a better yield, we prefer that business. So that contribution always goes up in the quarter.
Okay. I am just trying to say if elections would not have happened, we would have still give, I mean, the numbers would have been more or less the same ballpark, like we would have done other ads instead of the government spending as on-
More or less, you are right.
Okay. What was the spending like in quarter three for the government spending? What was the government spending in quarter three?
See, the way we look at it, government over years has been almost about 10%-12% business coming to the industry. It had fallen down in the previous year. This last, if you look at just quarter three and quarter four, it is almost about 10% contribution to the radio business.
Okay. Got it. For the digital business, how do we look at it? Is it breakeven right now, or we are still at losses at EBITDA level for the digital part of the business?
See, we acquired Gaana just four months ago, as I said, from December. As I said, it is going to be a subscription-led business. We stabilized the business. We believe Gaana will become breakeven in two to three years' time. Till that time, it is going to be investment. I do not see it as loss, but say, investment in a product which we believe will deliver great results for us as a company.
Okay. So that is the Gaana part of the business. But what about except Gaana, the other digital part of the business? Because Gaana did INR 4.83 crore. Except that, we did, I think, around INR 34 crore in digital revenues, if I am not wrong.
Yeah. The way we look at it, there are multiple things in digital. I was telling about Gaana, the major losses or the investment goes in the Gaana business. The other business is largely profitable because it comes as part of our digital offerings of affiliate revenues from YouTube, Instagram, and all. There is no loss. It is more of how do you leverage your social media assets? How do you leverage your RJs influencers? That business is always there. We do a lot of original content, which we have been doing over the years of, like a Kareena Kapoor Khan show or a Gauri Khan show, where we make revenue out of sponsorship and the digital revenues. Those business are generally profitable.
It is the investment. If you look at Gaana came in December, before that, we had a Mirchi Plus as our platform, which was also an investment phase. With Gaana coming in, that platform becomes one platform only. The loss is not going to be in Mirchi Plus and Gaana. It is just one platform now. We believe in this same investment, we will have a better product, which is audio stories, podcast, and music, combined with our reach across the country. It is a much better product and we are well-placed. The investment is going to remain specifically only on Gaana.
Okay. What I am trying to understand, as an investor, because in digital, we have been investing for the past three, four years, if I am not wrong. I understand digital business first requires a lot of investment, and then it gives you a kind of a J- curve type of return. When will be that phase when we stop investing and we start monetizing the kind of things we have built, the type of subscriber base on YouTube we have built, and maybe the music library which we are building in Gaana. When will we start monetizing it, actually? When will it start to get reflecting in numbers?
Shikhar, if you look at couple of things. One, we started pure investment digital only two years back, and not four, five years back. Two years back, we started our Mirchi Plus app. That is one point. The second part on Gaana, we have a stable base of subscribers. It is a paid subscription business. We believe we need couple of years to market it because the product was not marketed in and out. It is a great brand. Lot of brand salience which is there. The search optimization of Gaana is very strong. Two brands, ENIL and Gaana coming together, it is a great partnership to be in. It will take a couple of years to invest into it to break even. Our assumption is between two to three years, Gaana on a self-model also will become profitable. But we have enough revenues available to sustain it.
As I said, you have to get your tech right. There is investment on tech. It is a dynamic product, so you invest in tech. Content was not there, so the content cost is going up. There is tech cost, carrying cost of cloud and all. For the next two years, we believe there will be some investment, and in two to three years' time, Gaana on its core will become profitable or break even.
Got it. Do we plan to start acquiring more things like the way we acquired Gaana? Do we plan to acquire other things? Or will Mirchi Plus and Gaana be enough for the next two to three years, and then we will plan to monetize them later. What is the plan?
See, the way we look at it, we have enough on the plate right now. But any interesting opportunity comes in, we always evaluate it. It is not that we close our ears completely. But you are right, with Gaana, with our non-FCT strategy and the radio growth, we are well-placed for it. But if any interesting opportunity comes in, we will always evaluate it for sure.
Okay. Got it. Thank you. Thank you very much. I will join queue back for further questions. Thank you.
Thank you, Shikhar
Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go ahead.
Hi, Yatish. Good morning.
Good morning.
My first question is, you said that the FCT business grew by 10% this year. Two parts to the question. One is, going forward, how do you look at the industry growth? How should we think about it? Let's say GDP grows at 6%, 7%. Media industry and within that radio, how will it grow? And within that, Mirchi being at 25%, 26% market share, how do we intend to grow? I am not saying that next year, I am saying over next two, three years. How should we think about it? Second, you mentioned that we are currently at 10 minutes inventory utilization, and in the past cycle, we have gone up to 13, 14 minutes kind of a number. Given that, how should we think about pricing part?
Because generally, in the last cycle, we were the market leaders and we were the ones who were leading the price for yield improvement. Now we have enough inventory, are we the ones who are going to be following that yield improvement? Again, some light on that.
Okay. On the FCT growth part, yes, we had a decent growth this year, which is led by volume and market share. It is not just the industry growth which is helping us to grow 10%. We had outgrown the overall market also. From a radio industry point of view, the way I look at the media industry is in two parts. There is a digital and there is traditional. When you combine both, then you always see radio industry or traditional media industry is not looking so rosy. But from a traditional media industry per se, the radio industry has remained constant as a contribution, and we believe a 5%- 7% CAGR for the next five years should not be true. Anywhere in the world, if you look at U.S. or, radio industry has remained steadfast with that.
Yes, it is not the golden period of double-digit CAGR for the next five years, but a 5%- 7% industry growth for radio should remain. The way we look at industry as market leaders is, yes, in the near future it is going to be a volume-led growth. Also for us, at Mirchi, the growth will come from market share gains also. That is what you have seen in the last one and a half years. Our market share has improved drastically, both on volume and value. On pricing. That is on our guidance or my humble estimate of the radio industry, for India would be. On your second question on the pricing part, we remain still the premium player. Pricing is governed by market factors also.
You might want to price your product at a certain level, but there is a volume and a supply and a demand case also. When the market demand is little bit not very boiled, you look for market share gain. There is some bit of steal which has dropped down post-COVID, and it has taken time to recover. But as I said, we believe some bit of price correction will happen in the next fiscal period. Maybe two quarters down the line it will happen. It is unfortunate. Nobody likes just a volume-led growth, but the pricing is a function of many things. It is not just a uniform price across the country. It is not one India price. Every price for every station is different. There are many factors of prime time, non-prime time, weekends, weekdays. It is a complex thing.
It is not like other telecom products or anywhere where you have a one standard pricing. It has multiple factors. But having said that, we are market leaders. We are a premium player. Our pricing premium still remains very high compared to any of the competition, and we are committed to it. As we see post-election, the India story will command much better and all the growth factors we look at, the GDP growth, with the economy doing well and the demand coming back across sectors, we will see the yields improving much more.
Right, Yatish. My question was more towards that since we have inventory and room for volume growth, is it that some other players will start that pricing improvement? Is it dependent upon them doing it, or do you also think that if the demand comes back and we still have room to increase volume, we may still be able to increase pricing? That was the context.
Dhwanil, if you look at our history of two decades, we have always been very cognizant, as I said, between the advertisement to the music player. People come to radio to listen to music. Correct? As a part of it, you have to be cognizant of the fact. And that is what, for the last two decades, our DNA has been very clear that the consumer and the listener comes first. The ratio of FCT to songs has always been right. In tough times when the demand has not been paid, we do some bit of relaxation of inventory, but we are always very cognizant of that fact. It is not dependent on competition. We have our own internal guidelines. That is the reason we are leaders in listenership and revenue, primarily because of that.
That we run less ads, we are a premium radio station, and we command a higher price. We are not dependent on others. It's market factors and any random objective of market share gains that which leads to it. It's not a function of just looking at competition, dropping price or competition improving the price. It's multiple factors. Having said that, being leaders, we will drive the price increase in the industry.
Okay. Second question on the digital side. You talked about you being in investment mode, and you remain like that for next two to three years. Thinking about this, do you guys have any kind of a number you mark or a feeling beyond which you would then not invest? Because the concern from the investing side is that whatever profit that we generate in the radio, if we continue to invest higher and higher amount on the digital side, then the actual profitability may not show in the interim. How do you guys think about it?
The way we look at it, if you look at the industry, everybody intends to become a multimedia company. When you look at traditional and digital, if you don't play both the games of traditional and digital, that's not the right way to look at it. In a technology-impacted, digital-impacted world, you have to be playing both. The way we look at, yes, radio remains a cash cow for us, and we will drive our profitability from there, being very efficient and being market leader. That will be there. But being a future-looking company and making your company future-centric also, digital plays a large role. We are very cognizant of the fact how much we invest in it. If you look at a two to three-year horizon in a digital industry, investment for two, three years, we believe is not very high.
If you look at revenues also coming from Gaana, in four months, we already delivered INR 12 crores revenue. It's not that you're building a product from ground zero. There is a strong affinity to the brand. We understand the music space very well compared to any other competition. We believe what we have taken on digital side on Gaana, that's just one part of digital. Gaana is not just the only part, but yes, it's one of the main levers of our digital business. We believe a two to three-year investment horizon is a good-looking horizon to break even. In today's time, when you look at all digital startups and all, if you look at it from that perspective, we are well-placed. Because we are playing the game to our strength, we understand the Indian market very well, the Indian music choices very well.
Combined with technology and human intervention, we are well-placed on it. Our investment bets are looking for two to three years. We have already two years of it. We pivoted from just being a non-music app to now a much more holistic product. With a horizon of two to three years, I think, we are well-placed on it, Dhwanil. It is not very large. We are cognizant of the profitability part. As I said, it is not just about the radio business, but at an overall level, ENIL remains very. We look at profitability at every level. From that perspective, I can assure you that from a company's point of view, we will be very cognizant of that fact.
I think for two years of investment in digital, with a revenue which is already there, and with our knowledge base of the country in the music space, we are very well-placed to deliver a more holistic media and entertainment company in the near future.
Great. Thanks, Yatish for very detailed answers, and wish you all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Deepan Shankar from TrustLine PMS. Please go ahead.
Hi. Good afternoon, everyone. Thanks a lot for the opportunity. Firstly, from my side, sir, can you split the breakup between this total digital revenues you have given, that INR 20 crores Gaana stood the rest of the numbers?
On a full year basis, our digital. You wanted for the quarter or the full year basis?
Quarter.
Quarter. Do you want the split?
Yes, please do.
On the quarter, we have done about INR 20.27 crores of digital revenues. Our platform revenues are INR 15.7 crores and other revenues are about INR 4.57 crores.
What about these MMS and other solutions?
Multimedia solutions this quarter delivered about INR 17.5 crores, and the acquisition and event business was almost about INR 20 crores.
So this includes some part of the digital also?
Yes. The digital component, which I said INR 4.5 crores, is part of multimedia solutions also. Some part of it is part of multimedia solutions also.
Okay.
But I said INR 17 crores was the full multimedia solution business.
Okay. Got it. Yes, sir. Regarding the growth perspective in the digital business as such, currently we are doing around INR 10 crores of Gaana quarterly, and the rest of the business is around INR 30 crores. Now, how do we see this Gaana business growth over the next two, three years? And how do you see this digital component over the next two, three years, including the other digital business?
Deepan, in the past also, you would have heard that we are gunning to make ENIL a full multimedia entertainment company. Our radio contribution used to be 65%-70%. We believe radio contribution will come down in this year and next year to about 50%-55%. Digital ambition is, today we are at this quarter for, sorry, quarter four, our digital revenues are almost 25% of our radio revenues. That endeavor will remain this year for sure. The way we look at, as I said, we have been speaking, Gaana, we look at making it profitable or breakeven in the next two to three years. Our aim is going to be that ENIL dependence on just radio remain, if not more, at about 50% only. The way it would be 50% radio and 50% non-radio, which will include events and digital business also.
Okay. Where I am coming from this is radio business is like a single-digit volume growth kind of business, and then the other solution part will grow in somewhere around 15%-20%. How do we see Gaana even much higher than that kind of growth we can achieve?
See, because it is not digital advertising, it is a digital subscription business, Deepan. It is not pure advertising. We do a lot of digital advertising business also separate. But on Gaana specifically, it is a subscription business. The way we look at, in India, there are 200 million free music subscribers, of which 8 million pay today. If you look at the EY FICCI report, that is the number when you look at from an industry point of view. The way we look at it, there is huge funnel available to acquire more and more subscribers. It is up to individual players to give a better product, better experience to consumer at the right price will help us drive subscription and drive Gaana revenues.
Our numbers, our budget planning on Gaana, we believe in the next two to three years will make it profitable, at a right price, and a subscription base of about 3 billion subscribers.
Okay. Sure, sir. Thanks for all the inputs.
Thank you.
Thank you. The next question is from the line of Deepak Kapoor from Benchmark Capital. Please go ahead.
Hi. Good afternoon, sir.
Good afternoon.
I wanted some clarification on the published numbers. In the press release and in your earlier remarks also, you allude to FY 2024 PAT at INR 50 crore. This doesn't match with the P&L. Can you please tell me how this INR 50 crore number is arrived, which number is alluded to as a PAT?
I'll ask Sanjay to answer this.
Yeah. Hi, Deepak.
Hi
So basically you have to take care of. So there is a mismatch which you are mentioning. I will request you to, from the ad copy part of it, go and refer to note number six. Basically what is happening is that because of the application of Ind AS 103,
Yeah
We had to do the restatement of the numbers. That is how the audits and the regulations compel us to do. As you must have seen, that FY 2024 number, we have shown the PAT at INR 50 crore. And I will tell you that if you go back to note number six, you will find that detailing we have given about the acquisition of the business of Gaana. So the impact of that acquisition, if you deduct it, then you will find out the differential number. It is not a mismatch, actually. It is a restatement.
Okay. So if we remove the impact of restatement, the PAT would have been INR 50 crore?
Yeah.
Okay. Also, Q3 versus Q4, there is a jump of almost INR 10 crore in other expense. Can you throw some light on this?
Yeah, sure. I will do that. Just a moment. Just a moment, Deepak. Just a moment.
Sure.
Major part, major contributor of that increase of other expense cost by INR 10 crore is because of the Gaana music cost. Just a small heads-up on that. Gaana as a music app is a platform which helps the listener to listen to his favorite music. When we do that, back to back, we have to have the arrangement with the music labels because in ENIL, we do not own any IPR of any of the music.
These are technically the IPR of the music is owned by all music labels like Saregama, T-Series, Vibe, Zee Music and everybody. This is the first quarter when you are kind of seeing the impact of Gaana coming to ENIL, both on the side of revenue as well as the cost. If we talk about this INR 10 crore differential, the approximate amount of the content cost due to Gaana would be close to INR 7 crores-INR 7.5 crores.
Okay, noted. This is not a one-off. It is likely to be then crucial. This is just content cost with Gaana.
Of course, Deepak, because if I am taking something on the revenue, I have to take something on the cost element.
Got it.
Component.
Got it.
It is part of the same investment, what we are talking about, Deepak, on the Gaana business, on revenue and the cost front, both will reflect into it.
Great. That's clear. Just one last question. Did the subscriber numbers for Gaana, did they go up the last quarter? They're stable or which direction?
Because it's too early, as I said, it's been December only. Its subscriber numbers is driven by behavior. Initial for the first four months, our endeavor has been to make the product better, get all content there, stabilize the product. Having said that, our subscription numbers have remained stable, which is a good part, and this team cannot have started advertising about it, about the product. The whole idea, because we believe that it has so much salience available, the subscription numbers have remained stable. Important for us, in the last four months and in the coming couple of quarters is to get the product and the tech really, really up there for consumers to see value and have a better experience, both on the music side, recommendation, search, interaction with artists, how do you look at fan clubs.
That's where the endeavor is going to be in the immediate future while we look at building our subscriber base. It's going to be a journey. It's not a quarter-on-quarter number. Yes, everybody wants, and we also gun for more and more subscribers. But important is to get your product right, the value equation right for the consumers before you look into marketing.
Got it. Sorry, just a bookkeeping question. I missed it during the previous conversation. What was the Gaana revenue in FY 2024 and in Q4 FY 2024?
Gaana revenue total was about INR 12.5 crores in the year and in the quarter it was about INR 9.5 crores.
Okay. Thank you so much.
Thank you.
Thank you, Deepak.
Thank you. A reminder to all the participants, if you have any questions at this moment, please press star and one. The next question is from the line of Sunit Majumdar from Elara Capital. Please go ahead.
Yeah. Hello. My question has been answered. Thank you.
Okay.
My follow-up question. Yeah. Thank you.
Thanks, Sunit.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you, Sagar. Again, everyone, thank you very much for joining on a Saturday. I extend my heartfelt gratitude to each and every one of you for the continued support you have been providing to the company through the years. I would reiterate that the last year quarter results have been very encouraging. We remain focused on profitability and maximizing the shareholders' wealth. Thank you very much. Have a good day, guys.
Thank you, members of the management. On behalf of Entertainment Network (India) Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.