Entertainment Network (India) Ltd (ENIL) Q1 FY23 Earnings Concall Transcript

Entertainment Network (India) Ltd (NSE: ENIL) Q1 FY23 Earnings Concall dated Aug. 09, 2022

Corporate Participants:

Prashant Panday — Managing Director and Chief Executive Officer

Analysts:

Deepan Narayanan — TrustLine — Analyst

Chetan Thacker — ASK Investment Managers — Analyst

Sanjay Ballabh — Head of Finance

Sameer — Vama International — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Entertainment Network (India) Ltd., Q1 FY ’23 Earnings Conference Call. We have with us Mr. Prashant Panday, MD and CEO; and Mr. Sanjay Ballabh, Head of Finance. 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. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Prashant Panday, MD and CEO, ENIL. Thank you, and over to you, sir.

Prashant Panday — Managing Director and Chief Executive Officer

Thank you very much, Aman, and welcome to this call, dear investors and analysts. As always, let me just begin by giving a small update on the quarter, and then we will open the lines up for questions from your end.

Before I give you the details, I would just like to preface it by mentioning, that I think this has been an exceptionally good quarter for ENIL and for the radio industry in general. I will show you three or four points in my talk now, which will explain why I’m calling it an excellent quarter for ENIL. And also, it has, of course, been a good quarter for radio, as the sector has recovered partially from the COVID impact of the last two years. In fact, this was the first quarter after two full years that we have not had any lockdowns, and we can say that this is a first quarter of recovery in genuine terms.

So with that, let me just go on to share some important numbers. As you may have seen from the investor presentation, overall companies — the stand-alone company revenues were INR95 crore compared to INR39 crores last year approximate numbers, which shows a growth over — of 145% over last year. However, compared to the pre-pandemic quarter of FY ’20, the recovery is only 2%[Phonetic] still, which means that the — that we have — we still have a 28% deficit, which we need to bridge in the coming quarters.

Breaking the business results down into our two major components of radio and solutions. The radio business did INR63 crores, which represents a growth of 171% over last year, a very strong growth, as you will notice. But compared to the pre-pandemic quarter of FY ’20, the recovery is only 67%, which means that radio has a longer way to go, compared to the solutions business. However, a small caveat over here, that in the pre-pandemic quarter of FY ’20 — quarter one of FY ’20, we had strong election, which, as you know, is a once in a five-year phenomenon. And if I take that out, then the recovery on the radio side is 73%. So it’s still approximately the same 27%, 28% gap that we see in our results, still that we need to bridge to just go back to the pre-pandemic levels.

Talking about our solutions business, we did approximately INR32 crores in revenues, which represents about 108% for last year. Again, anything above 100% would be considered to be a strong growth, because even though we are — we knew that we were recovering from a COVID-impacted quarter last year, many times, it is very uncertain how strong that will be. Even a growth of 60% or 70% would be considered to be a strong growth, but something above 100% means that it has been a really strong — exceptionally strong growth that the Company has seen at this point.

Now if I were to take out — in our solutions business, and if you remember in the pre-pandemic year in FY ’20, we also used to sell TV Today. TV today is three radio stations in Delhi, Mumbai and Kolkata. And if I were to remove that out and remove the other operating income, if I were to do a live comparison, then the really good news is that the solutions business is actually 102% compared to the pre-pandemic quarter, which means that we have actually gone ahead of the pre-pandemic number.

The solutions business has always been a strength of this Company, and we have been telling you that from the beginning, but this is the first evidence of this. So the first point why I’m calling it an exceptional quarter for ENIL, is this point, that the solutions made a full recovery, and we believe that the radio business also will make a full recovery in the next few quarters.

Now the solution recovery is all the [Technical Issues] because some of the products that we have in our solutions business, for instance, activation or for instance, concerts. Concerts have almost not started, and our recovery in concerts is just about 9%, right? And if you look at certain third-party events to generate the sponsorship revenues for a business that we call Catalyst, the recovery is nearly 17%. So there is a struggle still with respect to certain on-ground activations and concerts. And when all of this comes back in full flow, as you will see now that in the month of July and August, a spate of events happening, there are wedding exhibitions, there are design exhibitions, there are all types of events now starting to happen. There is a marathon flag-off, which is — the Mumbai Marathon flagging tomorrow. So there’s a lot of activity which has started, and we believe that the solutions business would actually gain even more traction coming quarters.

So that is with respect to our revenues. Coming to the pricing and the capacity utilization. Now I think there has been a pretty solid reset in the balance between these two important variables. If you look at the results of this quarter and compare it with the pre-pandemic quarter, because that was really where we started to [Technical Issues] from because of COVID, then the pricing is down 44% compared to the FY ’20 quarter, and the volume is 119%, which means that the volume recovery is still happening, but the price impact has already happened. And that is the reason why we are still less than our pre-pandemic numbers.

If you ask me how I see this going forward, I believe that the pricing will start to recover because the season is going to come. Most broadcasters are running full on volumes. There’s a solid amount of demand that we are seeing in the market. So we’re getting more and more calls for radio advertising, and therefore, we believe that the pricing will start to recover starting from mid-August, which is festival season, any time we will start seeing the pricing to recover. But will it recover all the way up? I think it will not recover all the way up. I’ve said this in the past that I believe that the — I will start again from the point on pricing and capacity utilization, which was the second point in my talk after revenues.

And I mentioned that in this quarter, if I was to compare the pricing compared to the pre-pandemic quarter, then the pricing is down 44% compared to FY ’20. But the volume is up only 119% or up 19% compared to FY ’20. Now what that means is that the recovery is still partial. That is the reason why the revenues are still less than the pre-pandemic levels. However, if you were to ask me whether I believe that this pricing will start climbing back from here, then my answer is very strongly, yes. I believe we have hit the bottom of the pricing now. And with seasons starting from 15th October, we believe that the pricing will start to climb again.

However, the pricing recovery will be slow and gradual, and I don’t — I think that by the end of this financial year, which again is two good quarters of good season, which is third quarter and fourth quarter, I believe that pricing will still remain less by about 25% or thereabouts compared to pre-pandemic levels. Now what this means, is that the volume growth will drive the radio business performance this year. And in the coming years, of course, we will have to wait and see whether it stabilizes at this kind of a new price and volume level or whether it tries to regain the earlier level of higher price. We will need to see that. But for now, I think that the bottom has been hit.

Now here is the second piece of information I wanted to give you, which tells you why it was an exceptionally good quarter for ENIL. Now the volume market share that we have seen in this particular quarter has been a very, very high volume market share for Mirchi. And if I were to explain it in the terms of revenue market share, which is a parameter that is most important, then our revenue market share this quarter has been approximately 27%. Now this is as per our estimates from the industry and also looking at the results of certain published companies.

Now we always cross-tally what we tell you against data that is released later — one quarter later by TRAI, which is the official body, which — to whom we submit all our data. And these numbers are usually very, very accurate. So my revenue share in this quarter has been 27%, and let me express it in this manner, that this is — that we have gained 5% market share in the last five years, when we are talking of the first quarter. So it used to be 22% in FY ’18 first quarter. It has now climbed to 27% in the first quarter of FY ’23. This is a remarkable performance, and it has been growing year-on-year. And of course, this particular year has been an exceptionally good quarter, again, because of a strong growth in volumes that we have seen.

And this is also the highest revenue market share we have seen since Phase 3 began, which is from the year of FY ’17, and removing any exceptional items that may have come in the in between quarters. So that’s a very, very strong performance of the Company. I can give you details of AR and the volumes later, if you’re interested, but let me just move ahead.

EBITDA performance of the Company has been a turnaround this year. So last year, in this quarter, we had made a loss of INR26.2 crores on underlying EBITDA of the core business, the business without the platform, and I’ll come to the platform in just a moment. This year, the Company has reported a INR4.9 crore positive EBITDA on a like-to-like basis. So that’s been a complete turnaround. And if you see the impact, it’s minus 26%[Phonetic] going to almost INR5 crores. So you can see the impact that it will have on our annualized EBITDA number that — also that we see coming up in the quarters. Of course, even this is lower than our pre-pandemic quarter, when the EBITDA was INR24 crores. Again, this shows that this is a quarter in — work in progress. Actually, it is not that this is a full recovery, it’s a partial recovery, like I said, at the beginning of my talk.

PAT number for the quarter is still negative at INR5.5 crores, but it was INR27.7 crores last year. So again, you can see the recovery happening. I believe that in the coming quarters, we will see positive PAT, and we will end the year clearly with a positive PAT this particular year.

Now with that, let me just talk about a very, very important development of the year, and this is the third reason I’m saying it’s an exceptional quarter for Mirchi, that Mirchi Plus platform got launched on 1st of July, so therefore really the end of the first quarter. But the early signs are really, really very, very encouraging. And what I mean by that is that in just about a month, we are close to acquiring 1 million MAUs on our app and web platforms put together.

I think that is a remarkable start, because most of the other platforms, which have been on the audio content side have taken many years to reach their first million and then their second million and all, but we managed to do that in one — in just one month, in the month of July, we have nearly hit 1 million. And I’m saying it’s not yet 1 million, but we have nearly hit 1 million users across the app and the web platforms that we have. So that’s a strong thing.

And we believe that — and we have done this without much marketing spend. We believe that the reason this has happened is because of our strong content. Our top show, which was called 1000 crore ki laash has done exceptionally well. This was a show which featured Nawazuddin Siddiqui, and this is part of our strategy to be focusing on content, to be focusing on human-curated content. We are not going to be saying that we have 100,000 hours of content, because it is meaningless to the users. They’re going to be saying that it has got 1,000 hours of content or 5,000 hours of content, but each one of them has been curated by a human and not by an algorithm. That’s going to be our strength.

So this has been a big change. Of course, this needs the investment. And in this quarter alone, we have invested about INR7.75 crores in terms of our costs that we have incurred in the platform and in the businesses — new businesses that we are looking at. We expect this expense to continue in the coming quarters, at least for this financial year. And then at the end of the financial year, we will take stock of where we stand.

And in this business, as you know, things change very quickly. What you begin with, often changes during the path and the journey, and one needs to be very nimble footed in adjusting to market opportunities and in the feedback that the market throws at you. So we will take a review of this business at the end of the financial year. But in the first month of its operation, we are very excited with the way the platform has actually performed.

One last point before I open up is that the operating cost of the Company remains tightly controlled. Again, I’ve been saying this to you over the years that we will not go back to pre-pandemic cost levels. We have become a much more efficient organization. We are traveling less. We are using less office space. We’re using less electricity. We are spending a lot less on anything that was unnecessary for the business’ value creation. And as a result of that, overall, we have — our costs are down very strongly and annualized cost saving compared to pre-pandemic level continues to be in the region of approximately INR50-odd crore.

Now that INR50-odd crore saving is in other operating costs, which means that, that should flow straight to the bottom line. In other words, what I’m saying is that, even if our revenues fail to catch up with the pre-pandemic numbers in this financial year, because the costs are so down, our EBITDA movement will be far more faster in hitting the pre-pandemic numbers.

So with this, I would like to open up the — and one last point is that the share of digital products in our revenue of INR95 crores is INR11 crores or approximately 11.5%, 12% of our revenues. Now remember, again, I have mentioned that our goal is to take this to 25%. And on a quarterly basis, this number will keep going up and down. But we believe that the platform will actually start to contribute in the coming years, and help us take this to 25%. On digital content alone, 11.5%, 12% is a good number. And of course, this can grow as well, but the platform will really take us to the 25% goal that we have set for us.

With that, I would like to open up the lines, and Sanjay and I are available for any questions that you may have.

Questions and Answers:

Operator

Thank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Deepan Narayanan from TrustLine. Please go ahead.

Deepan Narayanan — TrustLine — Analyst

Good morning, everyone. Thank you for the opportunity. So firstly, I wanted to understand — so are we on the track to achieve INR150 crore kind of revenue run rate for Q3 for this year as compared to our pre-COVID levels?

Prashant Panday — Managing Director and Chief Executive Officer

So, thank you for the question, Deepan. I will not talk specific numbers. We normally don’t give guidance, as you know, for the future. But I will tell you that the first quarter numbers show that there is a solid amount of demand in the market. Our quarter two has begun quite well. And therefore, I would imagine that the quarter three numbers would also be very strong. That’s about all that I would like to say at this point in time. I’m assuming that there is no further COVID-related impact issues. I think that the market should respond by propelling us closer to the pre-pandemic number. Whether we will hit the pre-pandemic number or stay short of it, I cannot say at this point in time.

Deepan Narayanan — TrustLine — Analyst

Okay. Okay. Okay. And secondly, so happy to see this app launch. And so what is the kind of promotional or ad spends we are planning for the app over next couple of quarters? So I assume that we have not spent much on advertisement so far? So the INR7.75 crores, which we have spent, is mostly on the app itself. So what kind of promotional spending we are expecting?

Prashant Panday — Managing Director and Chief Executive Officer

Yes. Again, Deepan, basically, so far, the — we have gone slow on what is called performance marketing in this business, it is marketing that is aimed at converting to downloads and to usership. What we have only done is leverage our group resources, which has basically leveraged our Times of India Group’s television network, the online products that our Group has got, and of course, radio itself, to basically just build awareness about the app launch, and to inform about the first big show that we put out, which is called 1000 crore ki lash.

But in the digital business, as you know, what actually drives downloads and usership is, performance marketing that we have completely — we have not started that at all, nor do we intend to push very heavily on it. Our approach to the online — to the app business is very simple. We will focus on building value through the right method, which is to basically focus on content, focus on the user, make sure that the app experience is very good, and make sure that the user comes back repeatedly. So drop-offs are less.

See, when you get users by spending on performance marketing, then there’s a huge amount of wastage, because from all the people that you acquire, most of them just go away, because they were not interested in your app in the first place. It was just that they saw some post or some video and they clicked on a link and they became a download for you. But our approach is very different.

Our approach is to grow this business organically, focusing on content. You will notice that we haven’t even started selling the app at this point in time. Again, that’s because we’ve learned in the media business. It is important to get the content right. And only once we have got the content and we’ve got the right kind of users, the users who are sticky users who have come to us, only then will we start doing any performance marketing or any selling of the business.

So to answer your question specifically, we have spent the INR7.5 crores — INR7.75 crores that I mentioned has been spent on building the app. It’s been spent on the people who built the content. It’s been spent on the people who built the app itself. It’s been spent on various licenses, on various softwares. So basically, in the hardware and software behind the app.

Deepan Narayanan — TrustLine — Analyst

Okay. Okay. And lastly, in your remarks, you mentioned that this platform launch will contribute to the digital contribution, moving up from this 12% to 25%. So can you elaborate on this, sir?

Prashant Panday — Managing Director and Chief Executive Officer

Yes. We have said this, I think, a couple of years ago, for the first time that we see the revenue pie of the Company changing from what it is today. Today, very broadly speaking, about 67% of our business comes from radio. Approximately 11% — or 10% or 11% comes from digital, so that 77% and 23-odd percent comes from the other solution products.

We normally include digital also in solutions, so we mentioned 67% and 33%. But if you split the 33%, probably 10% digital and 23% on other solution products. We have also said that the 67% we see is reducing to 50%, which does not mean that radio is going to degrow. It only means that radio we expect will grow slower than the other products. And therefore, the contribution from radio will reduce to 50%.

Now in the solutions portfolio, we believe that the digital businesses will grow faster. What is about 10%, 11% today should become 25% in a couple of years’ time. And what is — again, because it will grow very rapidly. And of course, the remaining solutions products will also grow rapidly. But because they will grow slower than the digital products, their share will come down slightly and will remain at about 23%, 25%. So the share of the other solution products will remain where it is. Digital will climb to 25%.

So the platform is a step in that direction. The very good thing about the platform that I forgot to mention and my apologies for that, is that the user is so engaged to the platform today, that he and she — or she is willingly sharing with us so much information that other apps normally fail to do so. For instance, almost three-quarters of the users have given us their language preferences, more than half have told us their location — where they are located, a lot of them have already logged in, because we have a method that you can consume a few episodes free, but after that you have to log in to consume more. So the number of people who have logged in, which means that I start getting much more information about the user. All that is — and we are already starting to get a lot of rich data, which normally apps do not get.

Now what that means Deepan is that, when we go to the market to start selling inventory, all this information that we have, which identifies the user much more clearly, will come in handy. So this is what will propel us to 25%.

Deepan Narayanan — TrustLine — Analyst

Okay. Got it, sir. Thanks a lot, and all the best.

Prashant Panday — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from the line of Chetan Thacker from ASK Investment Managers. Please go ahead.

Chetan Thacker — ASK Investment Managers — Analyst

Good afternoon, sir. Am I audible?

Prashant Panday — Managing Director and Chief Executive Officer

Yes, you are, Chetan.

Chetan Thacker — ASK Investment Managers — Analyst

Yeah. Sir, just one question is on the radio profitability. I think pre-pandemic at a station level, we were at margins of upwards of 40%. So in this changed pricing environment and volume environment, do you still see hitting that number because of the cost initiatives over the more medium term?

Prashant Panday — Managing Director and Chief Executive Officer

So the profitable — you said the radio — just say that 40% number again? What is it that you want…

Chetan Thacker — ASK Investment Managers — Analyst

At the station level, sir. If you were to see your profitability at their station level pre-pandemic, which is stripping off the corporate overhead costs that were there, so our understanding was that number was upwards of 40% and hence your OPM used to come to that range of 33%, 35%. So just wanted to understand structurally, where do we see this number from a more medium term? Because pricing obviously has come down, volume has gone up. So just more medium term, where do we see this hitting again?

Prashant Panday — Managing Director and Chief Executive Officer

Okay. So Chetan, I will need to take some time from you in calculating and giving you information about the station-level margins. But clearly, because — see the pricing volume is a mix change, it does not affect the profitability at the station level. As long as we can recover the revenues, given the fact that our costs are lesser than pre-pandemic, logically, my margin should go beyond the 40%. But again, we need to — Sanjay, anything you want to add to this?

Sanjay Ballabh — Head of Finance

Yeah. So basically, Chetan, we do not — like revenue, we generally do not give as per policy, the profitability guidance also. But your question is right that…

Chetan Thacker — ASK Investment Managers — Analyst

Just from a direction, sir, don’t need number, but just from a direction.

Sanjay Ballabh — Head of Finance

So definitely, it is going to recover, but up to what extent, currently, we are not in a position to tell you.

Prashant Panday — Managing Director and Chief Executive Officer

So, basically, the — because — see, it depends on when revenues will go back to pre-pandemic levels, Chetan. So if revenues go back to pre-pandemic levels, then costs are going to remain — fixed costs are going to remain low. My solution margins have improved a lot compared to pre-pandemic levels. And therefore, I would imagine that it should go back to 40% and above. In fact, I’ve just got information that on the FCT product, the margin — this quarter, right? The margin of this quarter at the branch level is already 42%, yeah. So this is…

Sanjay Ballabh — Head of Finance

Chetan, here is the answer. It’s 42% already. So…

Chetan Thacker — ASK Investment Managers — Analyst

So directionally, we are in the right step, it’s just a question of when the revenue starts to come in, and we’ll start to see that number slowing down?

Prashant Panday — Managing Director and Chief Executive Officer

Yes. So two things, remember, are going to be long-lasting benefits. One is the cost structure has reduced forever. And two, is that the solutions business margins have dramatically improved. They used to be about 35% pre-pandemic, they’re now about 50%. So that — both of them make the profitability of the Company much better.

Chetan Thacker — ASK Investment Managers — Analyst

Sure. And sir, just one clarification on the PPT. So out of INR95 crores, INR11 crores is digital. And when I add up the radio revenues together, that number does not add up to that INR95 crores to INR100 crores. So am I missing something there?

Prashant Panday — Managing Director and Chief Executive Officer

No, no, I’ll tell you. So see, basically, remember that the total revenues of the Company are INR95 crores as we explained to you, right? And in that, the radio business is INR63-odd crores and the solutions business is INR32-odd crores, right? Within this INR32-odd crores, there is approximately INR11-odd crores of digital, that’s what it means, within the INR32 crores.

Chetan Thacker — ASK Investment Managers — Analyst

And the INR63 crore number that is there for the radio, which is there, so if I add up the revenue split that you’ve given for batch one, batch one, so that is a higher number. I just wanted to understand, is there some deduction that happens from there, which I’m missing?

Prashant Panday — Managing Director and Chief Executive Officer

No, the INR63 crores if you break it up into INR35 crores, batch one, batch two, you’ve given that number? Okay. Okay. So we haven’t given that number to you for radio and solutions separately.

Chetan Thacker — ASK Investment Managers — Analyst

Okay. Got it. Then it’s okay.

Prashant Panday — Managing Director and Chief Executive Officer

Yeah.

Chetan Thacker — ASK Investment Managers — Analyst

And sir, on the digital side, just on the Mirchi Plus app. I’ve taken a look at the app, first of all, congratulations to the team, its nice content out there. So just wanted to understand how will monetization happen there? Is just ad revenue that you foresee here? Or is there a play on subscription as well?

Prashant Panday — Managing Director and Chief Executive Officer

Yes, there are four or five different revenue models that are all in the pipeline. But let me tell you that what is really exciting about this business is, that in the international markets, particularly, subscription is a very solid revenue model. And if you look at the U.S. market, for instance, where there is relatively shortage of Indian content, if you look at the current international apps, which are whether it’s Audible or Spotify or any of these products which offer podcast content, they ask for anywhere between $8 and $10 a month, right? So we think that there is a big opportunity for us to play with the Indian, South-Asian community over there. And therefore, that is going to be a significant piece of our revenue model.

Now remember, the Mirchi brand is not available globally, but the podcast platform can be made available globally, which means that we are not talking about only the U.S. as being the part of the advanced countries, which will — where we will be getting subscription revenues from. But almost every other country where there’s a strong Indian population, so be it the U.K., be it Australia, New Zealand, be it Canada. So there are many rich countries where subscription models already are successful. So we believe that, that is clearly one strong area of revenue generation for us, which is international subscriptions.

Now in India, of course, the business works differently, it is mostly ad supported. And the ad-supported business models are relatively — they don’t pay that well. I mean if you look at the ad monies that ads generate, it’s not a very, very exciting number. But the chances are that this — but there’s a reason why it is not so exciting. And the reason is that the audio advertising piece on the digital side is completely undeveloped in India. So I’ll give you an example, let’s say if you are an advertiser and you want to release video ads on the online platforms, there are enough number of DSPs and SSPs available who will carry your ads and you’ll get a lot of reach as per our requirement.

Similarly, if you want to carry text or print kind of communication, no problem, display ads are an established business on the digital side. But if you want to put audio ads anywhere in the digital ecosystem, let’s see if I want to insert an audio ad on some podcast platform or some music, OTT or somewhere else, then there isn’t any proper mechanism by which I can programmatically do it, which means that those platforms, whether it is these music OTTs or podcast platforms, they have to have sales teams, which come and contact the client, generate business, which is a ridiculously inefficient system. So, one of the things that we are also working on is building the audio ad network, which will take some time. But again, so I believe that, that audio — the advertising piece in India also will grow in the years to come, even though it is small today. But that is also something that we’re looking at.

But then there are other things that happen from a podcast platform. Remember, at the end of the day, we are a content company. So we are building content IP. Now imagine with content IP, if you have some successful content — so let’s say, we have 1000 crore ki lash, it’s a current story. With 1000 crore ki lash, imagine what all you can do. You can make it into a video product. You can take it on ground into theaters and plays, you can do music out of it.

So remember, at the end of the day, if you look at yourself as a media company, and here is the latest, I mean, they day Netflix is now looking at itself as a media company. So if you look at ourselves as a media company, then the content IP that you’re creating can actually be exploited across different platforms. So that’s another revenue opportunity. And then there are many more, there is supposed to be tipping — there are many other opportunities that are emerging still in this area.

So there are revenue opportunities in the future, but it all — it depends on what kind of users you attract, what the engagement is, and if it is good, then there is a lot of revenue opportunity.

Chetan Thacker — ASK Investment Managers — Analyst

So, sir, structurally, if I were to just put it into percentage, once we are through with this user generation and user gathering phase, we’ll probably see subscription that can come faster from the international geography, ad revenue from the domestic side will start to scale up at a gradual pace, and content will be more spread across as we build the content on this platform and the existing content that we have. That will be a fair assessment?

Prashant Panday — Managing Director and Chief Executive Officer

That’s right. These are the three points that you very well captured. And I told you, so, there are some new revenue streams which keep emerging, right? Like, [Indecipherable] for instance, it has become popular in China and some other countries, where users may want to tip the authors of these stories etc. That becomes a different model itself. So yeah, that’s right.

Chetan Thacker — ASK Investment Managers — Analyst

Sure. Thank you so much. Thank you for this and all the best.

Prashant Panday — Managing Director and Chief Executive Officer

Thank you, Chetan.

Operator

Thank you. [Operator Instructions] Our next question is from the line of Sameer[Phonetic] from Vama International. Please go ahead.

Sameer — Vama International — Analyst

Yeah. Hello. Hi. What I understand is the INR7.75 crores is invested and same run rate will continue for three more quarters. So approximately INR30 crores will be pumped in, into the platform. On a business metric, have we done some working on what kind of ROCE we are planning to get on this? Or will this continue into next year also?

Prashant Panday — Managing Director and Chief Executive Officer

Before you answer, Sanjay, let me just throw a little light on it. So don’t forget, these are only costs that I mentioned. There will also be some revenue generation that will happen on the platform side. And therefore, the losses or the investment, as I prefer to call them on the platform side will be lesser than INR30 crores. We believe that it would be approximately INR24 crores, INR25 crore in this particular financial year.

And I also mentioned in the — somewhere in my call that we will continue to look at the data that emerges, and the future course of action, which is what happens in FY ’24 and onwards, will be decided later in this particular year. So whether this kind of a business model will continue in FY ’24 or not, it’s premature for me to say.

The only thing I can say is that, in this business, serendipity rules, you have to be alert, new things — new opportunities emerge, once you are there in the business. I mean there’s e-commerce also we’re considering, and there is a way by which e-commerce can be merged with this platform of ours. So I don’t want to pre-judge FY ’24 at this point in time. But we will take a call on it, and we will share our progress with you in the coming quarters.

Sameer — Vama International — Analyst

Sure. Also wanted an update on the — now since everything is opened up, the offline events which you used to do. I think there was some Marathi Awards which you had planned in April or something. And how did that go? Or what are the future events which are coming? Is that business picking up?

Prashant Panday — Managing Director and Chief Executive Officer

Yeah. So first of all, for us, Mirchi Music Awards is a very big event that happens, and we take it to television, and it’s done in multiple languages. So fortunately, the Hindi one, which is the biggest one, happened in the fourth quarter of last year itself. And just for information, we were the only award that actually happened in the fourth quarter. Nobody else was able to do any award. No movie awards happened at all in the fourth quarter. So yes, so that happened. And then, of course, the South Awards also happened in the fourth quarter of last year. But Marathi could not happen in the fourth quarter last year, because there was a struggle with respect to organizing it, with raising sponsorship monies and all of that.

So we have successfully conducted the Marathi Awards in this quarter, in the first quarter of the FY ’23. And talking about future events, we have a calendar, which is full of on-ground activations and all the IPs that we have created in the past, like the Mirchi Neon Run, the Mirchi Rock & Dhol, there are many, many such things that we’ve created in every branch. All of those are being rolled out. There is positive traction in the market. And of course, the biggest quarter for all these events is the fourth quarter of the year, when all the music awards happen and all the Cover Star and the Spell Bees and we have a lot of very exciting IPs which happen in the fourth quarter and third quarter. So they’re all being rolled out as we speak.

So yes, there is a lot of optimism with respect to these — remember that the advertisers really value these places where they are able to either touch base with their consumers — establish touch points with the consumers as in an on-ground event, or carry a message to the larger audience around the country in a non-advertising manner, right, by association. So those advertisers are very keen on all of these events starting off. And yes, I believe that the calendar — this year will be a good solid bounce back for all activations and television IPs of ours.

Sameer — Vama International — Analyst

Great. So this revenue is captured in the solutions business, right?

Prashant Panday — Managing Director and Chief Executive Officer

Yes, that’s right. This is one of the components of the solutions business.

Sameer — Vama International — Analyst

Thank you. That’s it from me.

Prashant Panday — Managing Director and Chief Executive Officer

Thank you. And Aman, if it’s okay, we can call this meeting to a close.

Operator

Yes, sir. That was the last question. And over to you, sir, for any closing remarks.

Prashant Panday — Managing Director and Chief Executive Officer

Great. And thank you, investors for coming the time on — taking the time on a holiday and joining us for the call. We really value it. In the next few weeks, we will be reaching out proactively and contacting some of you to share our plans, etc., with you. And in case you have any questions, please do reach out. Our contact information is there in the presentation deck.

Thank you from me and from Sanjay.

Sanjay Ballabh — Head of Finance

Thank you. Thank you, investors.

Operator

[Operator Closing Remarks]

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