Entertainment Network (India) Ltd (NSE: ENIL) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Yatish Mehrishi — Chief Executive Officer
Analysts:
Runjhun Jain — Analyst
Deepan Sankara Narayanan — Analyst
Shikhar Mundra — Analyst
Rishikesh Oza — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Entertainment Network India Limited Q3 FY ’25 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 touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Runjhun Jain from EY. Thank you, and over to you.
Runjhun Jain — Analyst
Thank you. Good afternoon, everyone, and welcome to the Q3 and nine months FY ’25 earnings call of Entertainment Network India Limited. To take you through the results and-answer your questions today, we have the management team from the company represented by Mr Merishi, Chief Executive Officer; and Mr, Chief Financial Officer. Please note 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 talk to us.
Before we begin, I would like to remind you that today’s discussion might include forward-looking statements based on the current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. The company undertakes no obligation to update these statements after today’s call.
With that said, I’ll hand over to Mr Yatish.
Yatish Mehrishi — Chief Executive Officer
Thank you, Runjan. Good afternoon, ladies and gentlemen. On behalf of Entertainment Network India Limited, I extend a warm welcome to our Q3 FY ’25 earnings call. As this is our first interaction of 2025, I would like to take this opportunity to wish you all a very happy and a prosperous new year. We announced our quarter three and Nine-Month FY ’25 results on Friday and I trust you have had a chance to review them. To ensure everyone is aligned, allow me to provide a brief overview of our performance.
During this quarter, our domestic revenue reached INR154 crores, marking a healthy 9.7% year-on-year growth. This was including digital sales. This growth was primarily driven by our non — by our digital and our non-FCT segments, which expanded by approximately 151% and 21% year-on-year respectively. Excluding digital, our core business recorded a 3.2% year-on-year growth with revenue reaching INR138 crores.
Now let’s take a closer look at the segment-wise performance. Our radio business faced some challenges due to a shorter festive season and overall slowdown in the media markets, which impacted overall volumes. However, pricing remained stable and we continue to maintain our revenue leadership position in the segment with a healthy 27% market-share. On the other hand, the non-FCD segment witnessed strong momentum, growing 21% year-on-year to INR50 crores. This growth was driven by success of our key on-ground events like Mitchi Spelby, Mitchi SBI Green Marathon, Rock Doll as well as popular talk shows including what and Want with Karina Kapur Khan.
Coming to digital business growth, our digital business continued to deliver exceptional growth with revenue reaching INR15.4 crores, up by 151% year-on-year, largely fueled by the strong performance of Ghana. As you may recall, we launched an updated version of Ghana in July 2024 with the revised pricing moving from INR299 to INR599 for our annual PAC pricing. And the response from customers has been highly encouraging. Since our pricing plans follow our annual subscription model, we expect the full impact of the price revision to reflect from FY ’26 onwards. YTD levels, our paid subscriber growth has been healthy and in the range of approximately 15%.
In-quarter — in-quarter three FY ’25, digital revenue accounted for 26% of our total radio revenues against last year of mere 13%. At YTD levels, radio contributes to 63% of our total revenues compared to almost 71% last year. This figures align with our strategy goal of evolving from an FM radio company into a comprehensive multimedia entertainment enterprise. We remain committed to strengthening our digital offerings, investing INR10.5 crores during the quarter, which is almost 26% down over the quarter one FY ’25. As Ghana revenues continues to scale, losses are narrowing, reinforcing our expectation that the business will likely breakeven in the next four to five quarters.
Let’s look at some of the key financial metrics. EBITDA including — excluding digital stood at INR38.8 crores with EBITDA margins at a healthy 28%. Profit before-tax for the quarter stood at INR22 crores. Our international operations remained EBITDA-positive, contributing INR2.1 crores in the quarter. Our balance sheet remains strong with a cash balance of INR344 crores as of December 31, 2024.
With this, I will hand over to the moderator and look-forward for some questions from you. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. To ask a question, please press R&1 on your phone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles we’ll take our first question from the line of Deepan Sankara Narayanan from TrustLine Holdings. Please go-ahead.
Deepan Sankara Narayanan
Good evening, everyone, and thanks a lot for the opportunity. So firstly from my side, so how has been the Ghana’s performance in terms of revenues and subscribers? And how has been our churn rate and new subscribers run-rate for the quarter.
Yatish Mehrishi
Thank you for the question. As I said, our growth has been almost 15% increase on subscribers. We see some churn always in-quarter three because that’s when we went paid. But overall, it remains very, very healthy in the paid market-share. Our paid market-share is also increasing quarter-on-quarter. The Ghana revenue for the quarter has been almost INR12.6 crores against last year of INR3 crores.
Deepan Sankara Narayanan
Okay. And in terms of radio advertisement, so which are the segments which has done well and which are the for the festive season for the past quarter?
Yatish Mehrishi
See, largely what happened was last year, the quarter three was getting into a general election. So there was a lot of government spends also coming in, which also subsided. But overall, the — if we look at the economy and overall sectors have been down, the real-estate has been down, health and pharma has been down. The durable segment, which are the consumer segments, if you look at apparels, consumer durables have been down. Auto has done well. I would say auto has done well relatively because of our last year base — last year, in fact, last year, auto was not doing so well. So from a base point-of-view, automobile, automobile and health and pharma has done reasonably well plus the jewelry section. So if you look at from an economic point-of-view, gold is doing well, jewelry has done well for us, auto sector has done well. But largely if you look at the disposal consumer segments like apparels, durables have not done well.
Deepan Sankara Narayanan
Okay, okay. And what are the key reason for this 38% increase in our production expenses year-on-year?
Yatish Mehrishi
Sorry.
Deepan Sankara Narayanan
Our production expenses has gone up substantially high. So what are the reasons for that?
Yatish Mehrishi
That’s largely different because if you look at the non-FTT segment, which is growing and that has grown almost — if you look at the event business has almost doubled. So that’s the reason. It’s a direct variable-cost to the event business what we do.
Deepan Sankara Narayanan
Okay. Okay. And so lastly from my side, we had a very-high base for Q4 of last year. So how do we see the current quarter doing in terms of volumes and also pricing in terms of radio business and how do we see overall the Q4 performance?
Yatish Mehrishi
So the way we look at –, if you look at-the-market factors also, there is a shift in media, which is moving towards more experiential marketing rather than advertising sales. And it’s not to do with radio, but across mediums, if you look at television print, everywhere vanila advertising has been muted this year with the way the economy has performed. So we see — we don’t — we are not very, very aggressive on the radio side that it will have a very healthy growth. But having said that, our solutions business, the event business is doing very, very well and we are confident that we’ll do much better also on in Q4 in that.
Deepan Sankara Narayanan
Okay. But we are saying even business has done extremely well, but our margins have been lower than last year. Any specific reasons for that?
Yatish Mehrishi
It’s a product mix change. If you do more events and less radio, if you know the business depends, radio is more profitable than any other business. So when — when your event business, it’s a product mix change. So when the radio business comes back, the margins look — will look much better also. So it’s a product mix change rather than anything else.
Deepan Sankara Narayanan
No, the overall mix, I can understand, but even within the solutions, the margins of solutions business has come down, right, business compared to last year.
Yatish Mehrishi
Yeah. So it’s not very major. There are couple of concerts business. If you look at in the media business or in the experiential business, the concerts will generally have a less margin compared to managed events. So if there are certain concerts which comes and comes in the quarter, it can deplete some bit of margins. But overall, if you look at, we remain committed on a very healthy profitable thing. So it could be a quarter-on-quarter thing. But overall per se, the margins have been in-line with expectations.
Deepan Sankara Narayanan
Okay. Thanks a lot. I’ll join back the queue.
Yatish Mehrishi
Thank you.
Operator
Thank you. We’ll take our next question from the line of Shikhar Mundra from Vevo Commercial Limited. Please go-ahead.
Shikhar Mundra
Hi, how much gas we are burning in Ghana right now?
Yatish Mehrishi
Yeah. So this quarter we have burned about INR10 odd crores, which is almost 25% less than what we spent in-quarter one and we believe in the next four quarters will keep going down.
Shikhar Mundra
Okay. So can you explain me the cost structure of Ghana right now? So INR12 crores of revenue we did. So I’m assuming INR22 crores was the expense since you said INR10 crores is the cash burn. So what was these expenses for INR22 crores?
Yatish Mehrishi
See, the way as I spoke, we increased the price to $2.99 only in July. At $2.99, the business doesn’t make sense. So when we increase the price because it’s an annual PAT, the entire pricing will take a year to come back to 5.99. The entire impact takes a year. Unlike any other product, it can take — it can be — you can change like a telecom, you can change the price today and the next one, the price will be higher. But in a subscription product where you already taken a payment for the annual year and for Anval Pack, the price will only change after a year.
To give you a perspective, right now, almost about 30% of our over subscription are on the new price. So as that number goes up, the profitability will keep increasing. And all the new customers are getting acquired at INR599. And as the INR299 comes for a renewal, they will move to a final year impact. And that’s the reason the difference of the loss what we’re looking at. But if you look at as a product, it’s very stable now at 519 and we will make money on that part and that’s the reason we are saying in the next four quarters, four to five quarters will be breaking even and the cost and the losses are reducing quarter-on-quarter.
Shikhar Mundra
Okay. And so when did we increase this price to INR599? Which month?
Yatish Mehrishi
First of we announced in July, it started in August.
Shikhar Mundra
Okay. And since August, what has been the month-on-month rate? I mean, have you seen a because of the price increase?
Yatish Mehrishi
Not much. If you look at from an impact of upgrade rates, it doesn’t change much. And even if it changes it depletes a little bit during certain months, but the impact of the price hike is much better than looking at a little dip. But overall we are we are in a healthy growth region. As I said, YT, we increased our subscription by almost 15% and we believe in the quarter-four also it will go much higher on that part.
Shikhar Mundra
Got it. Got it. So without the Ghana — the — the other part of the business would have done an EBITDA of how much without the cash burn-in Ghana?
Yatish Mehrishi
INR39 crores, INR39 crores. And what models.
Shikhar Mundra
Okay, EBITDA present. And what are the utilizations of the radio channels right now?
Yatish Mehrishi
It’s about 71% the way we count, but at an inventory level, it’s about 11 minutes an hour. So there is a lot of volume available on that for us being leaders, we run the least in inventory. So we have a lot of headroom and the economy and overall market scenario would have been better, the radio would have also performed better. So I don’t think volume is the issue. The overall market sentiments have been down in the last two quarters.
Shikhar Mundra
And if you compare this to an year back, say quarter three last year versus quarter three this year, the utilizations of our radio.
Yatish Mehrishi
The volumes have gone down by about 3% over last year and that comes from a point-of-view is a shorter festive season. Last year and media gets impacted by festive. Last year Diwali being in mid-November, the festival was a longer period. This year it got clubbed into October and then November — November didn’t do well for media across sectors, not just media, if you look at overall other companies have not done well. So the media spends are also very muted. So it’s a factor of couple of things, a shorter festive season and overall economy not doing so well across-the-board.
Shikhar Mundra
Got it. Got it. And I mean with a cash balance of INR344 crores and this Khana cash burn also coming to an end in the next four, five quarters. So how do we plan to use our cash? I mean, such a big cash balance.
Yatish Mehrishi
So we keep evaluating our opportunities to grow the business. And as we’ve taken about a year to stabilize Ghana and we keep discussing with the Board on the utilization of this part.
Shikhar Mundra
It’s been a long-time since our — we have not been able to create value for our shareholders as well. So I mean, would it — I mean, would it make much more sense to increase our dividend payout and…
Yatish Mehrishi
No, Rishike, the way we look at it is, you know, know, for us, we have been consistent on the dividend policy over the — or from day-one for every year-on year. Last year we increased, but understand we were coming out of COVID, the revenues were not up to the mark two years back. So that was the reason we were a little conservative on that and we wanted Ghana to stabilize. Now having the business stabilized on Ghana, the business is looking much better in a healthy position and we now have a visibility on the breakeven part. We will now evaluate on this part also. But having said that, we’ve been consistent on the dividend year-on-year.
Shikhar Mundra
Got it, got it. I mean one general question I have, I mean, it’s been around four, five years since our kind of a radio business has not performed the way it used to. I mean this is uncommon across the industry, not only for us. So I mean, I mean, do you feel, I mean, I mean this is something of a or do you feel I mean radio as an — I mean as an industry itself has something is on the — it’s kind of dying down.
Yatish Mehrishi
I don’t think radio is dying. It’s never been dead across the world or this case. The thing is it’s people look at radio in a very different way. It’s actually the ad sales, which has — which has been a issue across-the-board. If you look at television or print, everywhere ad sales have become a problem. The clients are becoming more demanding and more solution approach rather than plain advertising.
So if you look at even print or television, it’s the same issue which everybody is facing. And not just us, if you look at digital sales also, the pure ad sales of digital where it was growing two years back at 40%, 50% has come down to 10%, 15% growth year-on-year. So the overall ad sales business is going through a shift — is in a transition phase and we’ll have to weather that store. But the solutions business that’s the reason is doing well.
Now five years back, experiential marketing was not doing so well. But if you look at now with — and you would have — you would have seen the concerts business and the way they are growing, that’s where this shift is happening. And if you look at our strategic intent over the last year has been very clear that we no longer want to be just a radio company, but a multimedia company. And that’s where the shift is happening. So if you look at our business segments, it’s not just radio. We have solutions business, now we have Ghana and we keep evaluating different things.
So it’s about how do you look at transforming the company in this transition phase? It’s not radio being dead, it’s the ad sales business. Radio is still — as per our estimates, it’s still hurt by about 40 million people in this country. We do well globally also in that market also people listen to radio. It’s just that the ad sales is — because it’s dependent on ads and ad sales is right now being a beating, that’s where the problem is.
Operator
Sorry, Shikhar, your voice is breaking.
Shikhar Mundra
No, I’m done with the questions.
Operator
Thank you. Before we take the next question, we’d like to remind participants to press RN1 to ask a question. We’ll take our next question from the line of Rishikesh from RoboCapital. Please go-ahead.
Rishikesh Oza
Yeah, hi. Thank you for the opportunity. Sir, firstly, can you share what the revenue impact garner has been for Q3 as well as for nine months.
Operator
Hikesh, your voice is not very clear. Can you use your handset mode, please.
Rishikesh Oza
Hello hello, am I audible now?
Yatish Mehrishi
Yes.
Rishikesh Oza
Okay. Thank you very much. Sir, firstly, could you share what revenue and PAT Ghana has done for Q3 and nine months as well? And currently, how much subscribers does Ghana have paid subscribers and what would be the ARPU currently?
Yatish Mehrishi
So I will not want to share you the exact numbers of subscribers. You could come and meet us or speak to Sanjay on a phone separately. We don’t double our subscriber numbers right now for reasons. But our Ghana revenue, as I said, for the quarter has been almost INR12.53 crores and at our YTD levels is about INR33 crores. As I said, it’s growing at 16% YTD level, the subscriber number. The blended ARPU would be around in the INR300 range because as I said, right now 27% contribute the INR599 rupees, while INR299 as the balance. So as the year goes by and people renew the — renew the subscription, they will also become 599.
Rishikesh Oza
Okay. And could you share any internal targets that we have on Ghana in terms of revenue, market-share or how much subscribers, how many subscribers are you targeting and what would be the target margins.
Yatish Mehrishi
So the way we look at this, the first milestone for us is to breakeven in the next four to five quarters, which we are in-line with and our growth and our story for so-far in the last three, four quarters is in-line with that ambition and we believe in the next four, five quarters we should breakeven. In the paid market shares, there are many few players now left. Largely it is Spotify and us. YouTube also has YouTube music, but otherwise in a 100% paid market-share business than hardly any player. So we want to be a very, very strong competition to Spotify. Okay. And we have a very healthy, healthy market-share in the paid market paid market segment.
Rishikesh Oza
Got it. Got it. And regarding our radio business, when do you — firstly, what are the current yields compared to pre-COVID levels as a percent percentage terms, obviously? And what is your — can you share any visibility when can yields get back to pre-COVID levels?
Yatish Mehrishi
Okay. So you know-how overall companies have performed in-quarter two and quarter three and media per se, it’s not just radio media per se lags GDP growth by quarter, but as businesses do well, they start spending on marketing. So that’s the reason it’s not done well for the last one year and we still lag our pre-COVID radio sales. But the way we look at the business is not just look at radio, but as overall business. Overall business, we are higher than COVID, but — and we believe by the end-of-the year, we’ll be higher than the pre-COVID levels. So it’s a shift which has happened, behaviors have changed in the business has changed.
And as I was explaining in the previous question, the ad sales model could be also relooked at and that’s the reason we’re looking at transforming a business just not being a radio company, but to a multimedia company. So that’s the way we look at the business per se.
Rishikesh Oza
Okay. But if we have to compare, let’s say, the radio yields that are there and comparing that to pre-COVID levels, what would that be in a percentage term?
Yatish Mehrishi
So radio — if I just compare radio to radio, it could be about 75% to 80% of pre-COVID levels.
Rishikesh Oza
Okay. And yield terms.
Yatish Mehrishi
Sorry.
Rishikesh Oza
In terms of the yield that we are in, right?
Yatish Mehrishi
No, yields are 20% to 25% down, I was staying on the revenue per se.
Rishikesh Oza
Got it. Got it. Got it. Thank you very much.
Yatish Mehrishi
Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press R&1 on your phone. We’ll take our next question from the line of Megna, an Individual Investor. Please go-ahead.
Unidentified Participant
Hello, am I audible?
Operator
Can you give your handset mode please?
Unidentified Participant
Hello.
Operator
Yes, now. Please go-ahead.
Unidentified Participant
Am I audible?
Operator
Yes.
Unidentified Participant
Good morning. I’m an individual investor. I wanted to know the effective rates of radio, the Y-o-Y change and compared to pre-COVID level, how has it been like?
Yatish Mehrishi
So on overall radio yield on quarter-on-quarter, we are almost about flat, but pre-COVID level, as I said, it’s about 25% down.
Unidentified Participant
Okay. And related to Ghana, what has been the PAT like for Q3 and YTD?
Yatish Mehrishi
See, we are investing, as I said on Ghana, we have reduced our losses by about 25% over the quarter-four. This — on the 3rd-quarter, we have invested about INR10 crores in the Ghana business. As I said, it will remain in investment phase for the next four quarters by the time it should breakeven.
Unidentified Participant
Okay. And year-to-date level, how much have we bought?
Yatish Mehrishi
About 36 crores.
Unidentified Participant
Okay. Okay. Thank you. That answers my question.
Yatish Mehrishi
Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press R&1 on the phone. As there are no further questions, I now hand over the call to management team for closing comments. Over to you, sir.
Yatish Mehrishi
Thank you very much. We sincerely appreciate your continued support. Our guiding principle remains unchanged. We can focus on profitability, strengthening our shareholder value and on ensuring long-term sustainable growth.
Operator
Thank you. On behalf of entertainment, yes, sir, please go-ahead.
Yatish Mehrishi
Sorry, not I was just completing. Thanks for joining the call. Have a good day and thank you very much.
Operator
Thank you, sir. On behalf of Entertainment Network India Limited, that concludes this conference. Thank you for joining us and you may now disconnect.