Good afternoon, ladies and gentlemen. This is Aaditya Mulani from the HT Media Group. I would like to welcome you all to our second quarter financial year 2024-2025 earnings webinar. As a reminder, all the participants will be in listen-only mode. After we are through with the presentation, there will be an opportunity for you to ask questions. With this, I now hand over to Ms. Anna Abraham, CFO, Hindustan Media Ventures Limited and Head of Investor Relations, HT Media Group. Thank you, and over to you, Anna.
Thank you, Aaditya. Good afternoon, everyone. Welcome to our earnings webinar on the second quarter results of financial year 2024-2025. The results of Hindustan Media Ventures Limited was announced yesterday, and those of HT Media was released earlier today. Joining me on today's call to discuss the results are Mr. Piyush Gupta, Group CFO, Mr. Pervez Bajan, Head Financial Controllership and Taxation, and members of our Investor Relations team. Our comments during this webinar will follow the presentation slides. These slides and the financial statements are accessible on stock exchanges and on the investor relations page of our website. As we start with the presentation, kindly take note of the cautionary statement on any forward-looking comments during the call. In line with our usual practice, we would not be issuing any specific guidance on revenue or earnings.
This slide gives our Chairperson's comments on the performance of the company for the quarter, and I quote, "The second quarter of the current fiscal saw an improvement in the overall performance of your company. Our revenue grew and operating profitability increased. This performance can be attributed to our focused efforts on pricing, cost management, and efficiency, as well as a conducive business environment. The print business posted better numbers on the back of pricing-led advertising growth, which coupled with our emphasis on operational efficiency, resulted in enhanced profitability. While the radio business was flat, the digital business saw considerable upside in revenue on a YoY as well as quarter-on-quarter basis, largely driven by growth of OTTplay business, in which we continue to invest.
In the run-up to the festive season during the ongoing quarter, the company aims to boost growth on the back of a pickup in both retail and commercial market activity. Across businesses, we remain committed to enhancing the audience experience, bringing innovative solutions to advertisers, and in delivering content to our customers." End of quote. This slide presents the agenda for the day. We will start with an update on the overall consolidated performance, followed by the business-wide segments, after which we will open for a Q and A session. With this, now I hand over the call to Mr. Piyush Gupta.
Thank you, Anna. Good afternoon, ladies and gentlemen. We will quickly go over the second quarter's performance. This is a view of the consolidated financial summary. As you can see, there has been a strong revenue growth on our sequential as well as our YoY basis. We have grown top line by 12% on a YoY basis, and the same number on a quarterly basis as well. As you can see, there is a substantial improvement in EBITDA as well, and there is a positive cash flow during the quarter. Now we come to the business unit performance. Straight away, starting with print business. As is visible from the numbers, there is an improvement in print segment operating revenue led by advertising revenue on a YoY as well as a quarterly sequential basis.
Our revenues came at INR 252 crore as against INR 244 crore in the same period last year, which is a growth of 3%, and 15% on a sequential basis. Our operating EBITDA came at INR 19 crore against a marginal loss in the same quarter last year, with a substantial growth therefore. Moving on to English. As you can see, the advertising revenue has improved YoY. Basis commercial revenue and a quarter-on-quarter basis, better volume in government segment. Circulation revenue rose sequentially, aided by higher number of copies. Coming on to the Hindi segment. There is a marginal decline in advertising revenue on a YoY basis. However, sequential improvement due to better yields and volume traction. Growth on YoY basis seen across key commercial categories except retail, FMCG and industrial. There is a decline in circulation revenue on a sequential and annual basis.
On our radio segment, operating revenue remains flat with a drop in operating margins marginally. Digital, we saw strong growth on a yearly basis across all segments, especially in OTTplay, and operating losses on account of our investment in OTTplay continues as we continue to invest behind OTTplay. With that, we come to the end of the presentation. I hand it back to Aaditya.
Thank you, Piyush. We will now begin the Q and 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 two 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.
The first question is from the line of Deepak Sharma. Please introduce yourself and ask your question.
Yeah. Hi, this is Deepak. I am an individual investor. My question is on the OTT side. With Reliance JioTV+, do we see a threat over there because they have the distribution? What is our strategy with that behemoth looking at us on something where we have been bleeding for the last couple of years?
Yeah, Deepak, great question. Look, we do not see a particular threat. First of all, if you segment the market, Deepak, in Reliance Jio, this is basically going through the broadband. Whereas our strategy is to go into tier two and tier three towns, where broadband or fiber is not so easily available. However, having said that, we also have a Reliance Jio feed coming onto our OTT platform. That is the latest app that we have done. That is also available. The last point that I would like to mention is the pricing. Reliance Jio, of course, is bundled with the ISP service provider. Here, our pricing is very, very substantially competitive for the tier two and tier three towns which we have been maintaining, we have been doing. With the combination of that, I do not think there is a direct head-on competition. Market sets are very different.
The product is very different. The product delivery is very different. On an OTTplay with a single login, you get seamless access to content, which you can scrape through a multiple platform. Unlike Jio, where once you are there, you will have to open multiple platforms and get into this whole stuff. The content, the delivery, the pricing, and the target audience set is very different in both the products.
Sure, thanks. My question was on JioTV+, which was launched last month. I think that is operating in the same landscape.
Well, I off the cuff don't have too much details, so why don't we send those details across to you? As I said, my first two part of the segment still kind of applies to that because the target audience, even for a Reliance JioTV+, because that goes through the broadband wire and the fiber will still hold true. On the third part, I'll check up on the content and let you know. More or less, the answer still remains the same.
Sure.
Thank you. The next question is from the line of Mehul Pathak. Please introduce yourself and ask your question.
Can you hear me?
Yeah. Hi, Mehul.
Yeah. Hi, Piyush, Anna. Happy Diwali.
Happy Diwali to you also. Seasons greetings.
Happy Diwali.
Yeah. Thank you. I have a few questions to ask. My first question is on Digicontent. I had reached out to the company secretary twice, and second time I heard back from him in a very clichéd manner. My question was that if HTDS is 100% subsidiary of Digicontent, why is HTDS buying back HTDS shares? It will remain 100%. Usually, a buyback happens when the shares for the shareholders are listed cheaply, not trading at intrinsic worth, and you want to return value to the shareholder. Here the shareholder is Digicontent, but HTDS is buying back its own shares, which are 100% with Digicontent only. I never got that.
Mehul, let me try to address, and Anna can fill you on the details. Look, if you have analyzed the DCL balance sheet, you already know that there is a substantial loan sitting in DCL, and this buyback basically is resulting into payback of the debt. I understand your point of view that the cap table, 100% subsidiary will still remain to be 100% subsidiary. But once you reduce the cap table and reduce the debt, et cetera, return ratios will improve. I will ask Anna to elaborate on that as well.
Yeah. Mehul, Happy Diwali to you, too. I think Piyush addressed it. The cash there is the cash-generating company, it is HT Digital Streams. However, their parent company, Digicontent Limited, does have a substantial loan, which impacts the consolidated results from the interest costs charged that the consolid results bear on such a loan. Of course, there is a timeline for repayment as well. Therefore, it is important for Digicontent to be able to pay back the loan. Since the cash is in the operating entity, the buyback enables the cash to be sent to the parent company for a repayment of the loan sitting in the parent company—
And apart—
—which impacts the overall benefits, the overall financials of the consolidated.
So apart from the return ratios improving, Mehul, you also have to understand HTDS, which is the opco under DCL, is not being starved of any capital requirement. This is a surplus cash that it is generating and which it is using to pay down the debt at the parent company level is all that is happening. So at the end of the day, it is a treat for shareholders only.
And here, Piyush, one thing is, what you have stated is not part of the company secretary's response to me. Okay?
Oh.
Secondly, we all know, even there was a separate call with Anna when the merger and all that was being discussed that I had, and we all know why the debt is there on the Digicontent books also. Okay.
Well, the debt is there on the Digicontent. If you have been, and Mehul, you have been tracking this company for a while. This entire business was purchased for a certain price, and hence the debt came onto the books. By multiple buybacks, this debt has been partially retired, and therefore the return ratios are improving. All this is happening whilst the operating performance in the wholly-owned subsidiary is doing well and all the investments are going in. I think that is the sum and substance. So it is definitely accretive to all the shareholders in improving the ROCE ratios.
Yeah, I know. But when it is 100% subsidiary, obviously, the very fact that that is the finance structure design, there is always going to be some issue or the other in taking money from a subsidiary to the parent, so either in form of a dividend or a buyback or whatever. I am sure all this would have been thought through before having this sort of a financial structure. Nevertheless, my point is that all this financial engineering optics are not healthy and does not look good.
Mehul, do not worry.
That is my feedback.
Yeah. We take your feedback. We are not doing anything which is inappropriate or not allowed by law.
No, I am not saying that it is not.
We are following a process which is allowed by law to settle the financial liabilities. If the merger had happened, the financials and the entities would have looked different. But in the absence of that merger happening, which was also the privilege of the minority shareholders to decide, if there is a financial liability, it has to be settled. Otherwise, there are repercussions, which fall to the company and its stakeholders as well. We are, with full disclosure, with full transparency, following actions which are important to settle the liabilities of the company as it exists.
Mehul, just a point. This whole piece around financial engineering stroke, the capital structure should have been known, et cetera. I do not think I buy into any of this thing. This is all happening to improve the intrinsic value of the underlying value of the shares. If you are managing to retire your debt in a timely manner, I do not see what is wrong in it. There is no financial engineering here. You tell me a better way of retiring the debt, I will be happy. This is all happening because the operating company is churning out decent free cash flows.
In future, how do you plan to transfer profits made by the HTDS to Digicontent? Is it always going to be just like that?
No, Mehul. The debt is finite. Operating performance is good. Once the debt is retired, everything belongs to the shareholders, right? Whether it will be a dividend, whether it will be something else, I can't say right now. But at the end of the day, whatever cash is being created belongs to the shareholder. Now, whether a dividend will be announced or it will be reinvested back into the business, I can't say now. But you know as well as I do that this is only improving the return ratios of the company. This whole piece around financial engineering, I don't know what is financial engineering here.
Even if you buy back another 50%, Digicontent will remain the 100% owner of HTDS. That is my point.
We are not trying to change the ownership, Mehul. We explained why we are doing it. I think we've made our point. We will move on from this, please. As I said—
Okay. The second thing is, in the past also, I raised this point, feedback to the Digicontent board. The quarterly board meeting gets over in 25 minutes. I do not know how you can do a business review of a company in 25 minutes when you have not shared even INR 1 with the shareholders in the last three years.
Well—
To say that it is enough. I am just saying that these are observations.
Well, Mehul, I would rather not comment on this whole thing, but I can tell you, the meetings, the shareholder meeting, the Board of Directors meeting, there is a proper review which is done on the business performance. All the feedback is taken on board. Now, whether 25 minutes is good enough or not, I really do not want to comment on that, but a full-fledged review is always undertaken.
No, it is okay. Piyush, my point is, can you please convey my feedback to the board?
Yeah.
That is all I am saying.
Mehul, we also have the shareholders meeting of the DCL. You are welcome to join there and share the feedback directly as well.
Because I have not seen any other company. Piyush, if that is possible, many other companies should be able to do that. Only Digicontent is able to finish in 25 minutes and no other company in India. I have not seen.
Fair enough, Mehul.
Third point. On the Hindustan Media, I have seen there are two new investments in the notes of accounts, and even in the covering note of the quarterly result. Can you please share what these investments are, and what is the strategic objective of these investments in the HMVL quarterly report?
Mehul, let me get back to you. I don't know what investments. OTTplay is the single biggest investment where we are investing, and I think we—
HMVL, there are two investments. If you don't mind, I'll just take a second and read it for you. There is one of INR 8 crores and one of INR 56 crores in this quarterly report.
Okay, Mehul. Let us study. We'll come back to you. Let me just get my hands on it.
See, first is in Saama Technologies Private Limited and Appreciate Platform Private Limited.
Mehul, these are AFE investments, which we undertake, and you know the AFE model. These are AFE investments. If you do a Google search, you will understand these are AFE investments.
What is AFE?
The Ads for Equity , which is a cash neutral platform where we invest ads against equities. I think you are aware of that.
Dear participant, sorry to interrupt at the moment, but we request you to fall back in queue, please, for any follow-ups.
Okay.
Thank you, ladies and gentlemen. In order to ensure that the management is able to address queries from all participants, please limit your questions to two per participant. The next question is from the line of Rakesh Wadhwani. Please introduce yourself and ask your question.
Hi, team. Thank you very much for the opportunity. I am Rakesh Wadhwani from Nine Rivers Capital. Sir, my question is with respect to the ad revenue. We have seen a very good improvement in the ads business, advertisement in the print from the English, and lesser growth or the de-growth from the Hindi. Any reason for that?
Yeah. The commercial revenue, even for Hindi, has actually grown fairly well. However, overall revenue for Hindi is slightly depressed because of government revenue. The share of government revenue in the previous year was substantially high since it preceded a national election. Therefore, that government revenue has seen some softness in the Hindi, and you will see that consistently in the industry and not just for us. That has impacted the overall growth for Hindi. Commercial, even for Hindi, continues to be healthy.
Okay. No, because other players in the industry, their revenue de-growth is far, like more than ours. Ours is 2% for other players, it is more than 5%. That is a very good thing. But any reason why? I am talking year-on-year. I am not talking quarter-on-quarter.
Yeah. Quarter by itself. So quarter-on-quarter, actually, government revenue has substantially improved because quarter one had the code of conduct, because of which there was a depression in the volumes from the government advertising. Therefore, on a quarter-on-quarter, the government volumes have improved. I am talking by itself, and both the industry and us are seeing a decline on the account of the fact that base had a significantly higher government revenue as it preceded a national election, and that revenue is slightly subdued now. Commercial revenue has grown.
Understood. One more question from my side. With respect to the future upcoming, how do you seeing ad rates, as well as the print segment, also advertising segment growing for both Hindi as well as English?
As we have spoken in the past, we have been on a journey to improve our pricing in the print advertising, and we have seen success in the last two quarters. So the pricing has improved for us consistently, and therefore, that should hold us in good stead. Festive has been a fairly decent start, and we just hope to keep the momentum up for the rest of the quarter, and it will depend on that. There are certain economic fact indicators which are showing a slight plateauing in the overall economic environment and the consumption patterns, which could see some pluses, minus here and there. However, on pricing, et cetera, we have been able to achieve what we have set out to do to some extent.
And with respect to the demand for the advertising across Hindi as well as English belt, are we getting the same demand? Or what English belt is getting more demand and more ad rates and the Hindi belt is getting lesser demand and lesser rates across both are same or—
Yeah, we are seeing similar uptick in commercial revenue. Of course, category by category and depending on their relative importance in their various markets, there could be some changes involved.
Okay. With respect to the circulation, we have—
Sorry to interrupt you. May we request you—
Sure. Fine. Thank you.
The next question is from the line of Deepak Sharma. Please unmute yourself and ask your question.
Yeah. Hi again. Sorry. Earlier this year, we invested into EazyDiner. Is that the same methodology what Mehul was asking, and could you just explain more on that?
Yeah. Okay. Yeah, that's the same methodology what Mehul was asking. I think in the previous investors interactions we've covered that. This part of our business is the AFE business, whereby we take investment positions in multiple companies. We don't invest cash, it's basically the advertising commitment that we give from our side. These are long-term contracts. Of course, there is a classical investment process of valuations and various other terms, et cetera, which are agreed, basis which all these investments are made. The Saama Technologies, which Mehul was saying, and the EazyDiner, which you are referring, are both part of the AFE portfolio. I think I've comprehensively discussed this in the earlier calls. This is a pretty substantial part of our business and a pretty profitable part of the business as well.
Okay. It's not a typical investment which you're doing, it's just only the barter part of it.
Yes.
What I'm able to understand.
Yeah.
Yes.
Think of it like this. Yeah, exactly. Risk in a sense, I mean, of course, it's a minimalistic risk, but it is a barter in a manner of speaking.
There's no cash at risk.
Okay. So if the guy can refuse to not advertise into our system, that is all.
Yeah, that is all.
Okay. Thank you.
The next question is from the line of Rakesh Wadhwani. Please unmute yourself and ask your question.
Hi, team. Thank you for the follow-up opportunity. I have a second question with respect to the circulation revenue. We have seen circulation revenue coming drastically across Hindi as well as English format, and English format is lesser, like the negative growth is lesser. But in Hindi, the growth is very high at 12%. Any reason for that?
English, we have actually grown circulation revenue on a sequential basis, and it is kind of flat on this thing. Hindi has seen some decline in copies, but it is across the industry. The commodity had been heightened over the last one year. It has come down to slightly reasonable levels at this point. The entire industry did see some correction in the copy. So no impact on share as such, but a correction over—
Yeah. Also just to add to what Anna is saying, and whilst we are speaking, I mean this whole rationalization of unproductive copies, et cetera, which happened, brought it down. Our realization for copies are absolutely intact and market by market, wherever there is an opportunity to take a print order, we are on that journey any which ways.
Okay. Because if I can correlate, the lesser the circulation revenue or the lesser the circulation, it impacts the ad yields also. So it should not happen—
That's the reason I said the unproductive copies. Of course, it does. There is by market, by edition, and looking at the competitive position, you keep on optimizing the copies. There are some markets where you will bring down the copies because they are unproductive, and they are not doing anything to your pricing, therefore, the ad revenue and circulation revenue. But there are markets you will be increasing your copies because there's a bigger opportunity to take a bigger market share of ad revenue and therefore, get the circulation revenue going as well.
For the full-year, what will be the circulation revenue growth or it will be degrowth for full-year? Any guidance on that?
Well, there's no guidance on that, but I can tell you that the philosophy is to serve the market to the market's capacity. Obviously, as you rightly pointed out, revenue is the clear yardstick. So as long as you can grow readership to a level which will drive revenue, we will do that. But just putting in copies where it doesn't have a commensurate impact on the revenue is not something that we'd like to do very often.
Okay. One last question with respect to the digital. I am little new to this company, so forgive me if my question is very simple. So in digital business, what we are doing, we have an app, and how is the revenue model or how is the business work? Can you explain it in a nutshell?
It varies a little bit depending on whether you are looking at HT Media consolidated digital segment or Hindustan Media Ventures Limited digital segment. So in Hindustan Media Ventures Limited, the digital segment only pertains to the business that we have incubated from last year, which is called OTTplay, which is an aggregator model in the OTT space. We are an aggregator of various OTTs. However, we offer the content through a unified single login platform and not just a bundling process. So that is OTTplay. And the revenue there is from subscription of the various packages that we have, which we are offering to the customers. When it comes to HT Media consolidated results, the digital segment additionally has some other businesses like Shine, which is our jobs portal, and jobs and learning portal.
It also has the Mosaic business, which has properties such as VCCircle and TechCircle, which is in the venture space and the tech SaaS space, and a small business called Digital Entertainment, which is into digital streaming on a YouTube channel. So those are the four businesses which come in when we talk about HT Media consolidated.
Okay. That was very helpful. Thank you very much. And Diwali wishes in advance. Thank you.
Thank you.
Thank you all. With this, we come to the end of the Q and A session. If you have any further queries, please reach out to the Investor Relations team. Our contact details are given in the presentation and are also mentioned on our websites. I now hand over to Piyush for closing remarks.
Thank you, ladies and gentlemen, for making the time to join the quarterly earnings call for Q2 2025. I wish you and your family members seasons greetings and a very happy and prosperous Diwali, and we look forward to seeing you in the third quarter's earnings call. In the meantime, if there are any questions or clarifications that you require, please feel free to get in touch with our Investor Relations cell, and we will be more than happy to furnish the information. Thank you so much, and all the very best.