Entertainment Network (India) Ltd (ENIL) Q4 FY23 Earnings Concall Transcript

Entertainment Network (India) Ltd (NSE:ENIL) Q4 FY23 Earnings Concall dated May. 05, 2023.

Corporate Participants:

Diwakar Pingle — Head, Investor Relations Advisory

Yatish Mehrishi — Chief Executive Officer

Sanjay Ballabh — Executive Vice President, Finance

Analysts:

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Bisht Suresh — Bermas Financial — Analyst

Subrata Sarkar — Mount Intra Finance — Analyst

Ansh Manek — Equirus Securities — Analyst

Sameer — Prince — Analyst

Shekhar Mundra — Ivok Commercial — Analyst

Manoj Shah — Maxco Investments — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Entertainment Network India Limited’s Q4 FY ’23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Diwakar Pingle from E&Y Investor Relations. Thank you and over to you, sir.

Diwakar Pingle — Head, Investor Relations Advisory

All right. Thank you, Neil. Good afternoon, friends. We welcome you to the Q4 and FY ’23 earnings call of Entertainment Network India Limited. To take us through the results and to answer your questions today, we have with us the top management from ENIL represented by Yatish Mehrishi, CEO; and Sanjay Ballabh, EVP, Finance. We will start the call with a brief overview of the quarter and the year gone past by Yatish, which will give a broad highlight of the business trends and what he is observing in the market. And post this, we’ll open it for the Q&A session.

The discussions that we have today may contain forward-looking statements relating to future events and future performance. Numerous factors could cause actual results to differ materially from those in the forward-looking statements. The company undertakes no obligation to update any forward-looking statements to reflect developments that occur after the statements made.

With that said, I’ll now hand over the call to Yatish. Yatish, over to you.

Yatish Mehrishi — Chief Executive Officer

Thank you, Diwakar. Good evening, everybody. On behalf of Entertainment Network India Limited, I welcome you all to our Q4 and FY 23 earnings call. This is my first interaction with you all after taking over the current role at Mirchi. It’s been six months since I’ve returned, but I’m happy to share that I’ve spent almost 11 years at Mirchi [Indecipherable]. Prior to coming back, I served as a Chief Revenue Officer at a leading apparel company.

Moving onto the quarter gone by, the headwinds faced by the media industry post H2 last year continued even in quarter four impacting overall ad spends in the Indian economy. This has resulted in muted advertising spends across all mediums, be it television, print or even digital. Large event sponsorships have dried out in the market and since major events not happening in quarter four. In fact, the radio industry If you look at, the ad volumes have grown at 11%, while Mirchi has again outperformed the industry by growing at a much healthy 16.7% leading to a strong volume market share of 23.9% in quarter four.

If you see ENIL’s numbers, existing business without digital, we have grown at 2.3% with an EBITDA of INR23.2 crores giving a margin of 22.9% and delivering a PBT positive quarter with INR6.1 crores in Q4. If I was to look at on full year basis, we have grown at 31.1% with an EBITDA of INR93.3 crores, which is almost 88% growth in EBITDA at a margin of 22.6% and delivering a PBT of INR19.6 crores before exceptional items. As you know, we look at our business in three vectors, digital, solutions and radio.

So digital [Phonetic] first. We continue to invest and remain focused in growing the segment. Our investments have been very strategic in nature because we firmly believe digital is essential for our future growth and aspirations. We have invested — in line with that, we’ve invested INR7.2 crores in quarter four adding up to INR26 crores in the full year FY ’23. I’m very happy to share digital revenue from all our business segments for the year was INR33.6 crores, which is almost about 12% of our radio revenues in line with our aspiration to have digital contribute to 25% of our radio revenues in few years time.

The next is solutions business, which has shown exceptional growth both on revenue and margin on full year basis. Solutions has grew at 33.5% to overall revenue of INR115 crores with a very healthy margin of 34.3%. And finally, radio, we have grown at 35.7% to INR296 crores consolidating our leadership position by gaining almost 300 basis points in FY ’23.

Coming to our international business, we have rationalized operations in San Francisco as we have shared earlier. Our focus remains to drive overall profitability in the international market. We have toured San Francisco. We are in negotiations with relevant authorities in Bahrain to renegotiate our contract terms to make it more feasible. We remain very confident to all our other international business in New Jersey, Dallas, UAE and Qatar, which are independently profitable and are also growing on revenue. Overall, we are encouraged by the fact our international business even after losses in San Francisco and Bahrain in the quarter four has delivered a positive EBITDA during the quarter.

At overall company levels, if I look at operation of expenses, we continue to remain focused in running efficient operations. This year, we delivered a savings of INR53 crores over FY ’20 operating expenses. Our balance sheet remains very strong. Our cash reserves have grown to INR265 crores as of 31 March and at a consolidated level to INR282 crores.

To summarize, I’m very pleased with the ENIL performance, which has been ahead of its peers across radio and even other mediums, both in quarter and full year in these challenging times. We are satisfied with the true volume traction in radio, the client advertisers numbers coming back on the radio business. Our solutions and digital business are tracking as per plan. The company will continue to invest in digital arena to strengthen our future.

With this, I’ll conclude my commentary on the performance and once again, thank you for joining in and listening to me patiently. I’ll request the moderator to move towards the question and answer session. Thank you.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Deepan from TrustLine PMS. Please go ahead.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Good evening, everyone. Thanks a lot for the opportunity. So firstly, can you provide the split between this solutions and digital and the platform for the quarter four.

Yatish Mehrishi — Chief Executive Officer

Deepan, any other question also. I’ll just note down.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Yeah. So other question, how has been the platform business doing? So what is the kind of metrics we have added over the previous quarter in terms of monthly active users?

Yatish Mehrishi — Chief Executive Officer

Okay. So to give you your answer on digital, the digital content solutions, we went about INR10 crores. Digital platform has almost about INR7crores and digital components and other segments is INR3.56 crores totaling to about INR33.57 crores.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. How will — this digital platform is INR7 crores, is it?

Yatish Mehrishi — Chief Executive Officer

Yes. We are just starting that’s what we said. We have just started up our digital platform business.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Because last quarter, they did INR1.8 crores for the same, you’re referring this now at INR7 crores, right?

Yatish Mehrishi — Chief Executive Officer

Yes. This is a full year basis, I’m saying.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

No, no. Quarter four I need.

Yatish Mehrishi — Chief Executive Officer

So I’ll just give quarter four. While I answer your second question on the platform side, our MOUs are about INR4.6 million on both and then — and the platform. So if you look at our — at [Indecipherable] level, it’s about INR4 million and at INR0.6 million on the app. On the quarter’s number, the digital content solution, we have INR2.25 crores, digital platform INR3.34 crores and digital components and other segment is INR2 crores totaling up to INR7.7 crores.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Is it platform or what else is there?

Yatish Mehrishi — Chief Executive Officer

INR3.4 crores.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. Perfect. Thanks a lot. I’ll come back in the queue.

Yatish Mehrishi — Chief Executive Officer

Thank you, Deepan.

Operator

[Operator Instructions] Next question is from the line of Bisht Suresh from Bermas Financial [Phonetic]. Please go ahead.

Bisht Suresh — Bermas Financial — Analyst

Thank you for giving the opportunity. Hello?

Yatish Mehrishi — Chief Executive Officer

Yeah.

Bisht Suresh — Bermas Financial — Analyst

Sir, your takeover Hyderabad based company, it is a cash deal and stock deal, sir? Hello?

Yatish Mehrishi — Chief Executive Officer

I am sorry, Suresh. I think you are mentioning some other company.

Bisht Suresh — Bermas Financial — Analyst

Not mother company, sir. Your takeover, sir, other Hyderabad based teaching company ENIL Tech.

Yatish Mehrishi — Chief Executive Officer

You were mentioning about Spardha, which is Puna based, Spardha, not takeover. I invested in Q3 in Spardha, not in Q4.

Bisht Suresh — Bermas Financial — Analyst

Yes, sir. It is a cash deal or stock sir?

Yatish Mehrishi — Chief Executive Officer

It’s a cash deal. It’s a investment.

Bisht Suresh — Bermas Financial — Analyst

Investment, okay. How much stake we have in that company?

Yatish Mehrishi — Chief Executive Officer

I’ll ask Sanjay, our Head of Finance to answer this.

Sanjay Ballabh — Executive Vice President, Finance

Mr. Suresh, thank you for asking this question. First of all, this investment happened in Q3 of the current — last financial year and it was a cash deal and all it is — of this investment has been uploaded in the NSE and BSE sites. However, for your ready reference, we have invested approximately INR7 crores to get about 11.5% of the equity.

Bisht Suresh — Bermas Financial — Analyst

One another question, sir. Actually ENIL is continue loss making after corona. Next financial year will be — it is profitable?

Yatish Mehrishi — Chief Executive Officer

So Mr. Suresh, this is company policy not to provide any future guidance and we are sorry, but we will not be able to give you any kind of revenue or EBITDA guidance at this moment.

Operator

Thank you. Suresh, I’ll request you to join the queue again for a follow-up question. [Operator Instructions] The next question is from the line of Subrata Sarkar from Mount Intra Finance. Please go ahead.

Subrata Sarkar — Mount Intra Finance — Analyst

Yeah. A few questions from my side. First is on the radio business. You have grown by 13%, I’m talking about Q4.

Operator

Your voice is coming little muffled. Can I request you to speak with the handset.

Subrata Sarkar — Mount Intra Finance — Analyst

No. I am speaking through the handset only. So am I audible right now?

Yatish Mehrishi — Chief Executive Officer

Yes, Subrata.

Subrata Sarkar — Mount Intra Finance — Analyst

Yeah. So first question on the radio side basically. So you have — I’m talking about Q4. So we have seen a growth of 13% on the radio side. So if you can give a breakup like how much because of like increasing the volume and how much is the pricing because — and what is the pricing change? And if you throw some light on the pricing issue because whatever I have understood like we are still way below the COVID level in terms of pricing? So if you throw some color on this and like how you are seeing this environment to build up? This is one thing.

Now, another thing like in terms of ad revenue, I’m talking about radio. So like if you can highlight like what is our government — what percentage comes from government spending and are we because of the election and the — per next election are we anticipating a build up on that side? This is the second question on the radio side. Now coming to the non-radio portion that is our non-FCT as well as digital. So this quarter has been really, really muted in terms of non-FCT and which is just against the trend which we were experiencing in last quarter like there was some improvement like I’m giving your data. Like this time if we leave apart the digital part, like events and all those things, they have done really bad, really — things has not fired. So is this a one-off and particularly like things, if you see the full year results that has improved and we were seeing some [Indecipherable] side. So is this a one-off or like we are still anticipating this kind of a muted environment and response from that part of the business?

So — and last in terms of digital, like how — we have spent INR7 crores this year. So what is our plan to spend next year, entire full year? What kind of expenditure we are planning to make on the digital side? And on the accounting aspect, like would we use all those expenditures directly we will charge on the P&L or we will — like we will capitalize it to some extent? This is the initial questions. I can come to…

Yatish Mehrishi — Chief Executive Officer

Thanks, Subrata. Four were too many, even though they’re initial. So let me answer one by one. The first one you asked on the price and the volume. Yes, the growth has been volume led, but happy to share that the price has bottomed out. We have seen a marginal increase in price, which I would not term many major. It’s about almost about 1 percentage increase in the price, but it’s largely volume led. Our capacity utilization has improved by about 12%. So it’s volume led growth.

To give you a perspective on future, I believe it will continue in the first six months the same. In media, generally, the pricing changes in festive and where there’s demand much higher. So I don’t see in the next two quarters the price going up very, very differently and it will be volume led growth and being as the leaders and with headrooms available, we believe it will give us good market share also and consolidate our position. Price could be in the second half of the year. So that’s the first one.

The second is on government, you ask me, the government contributes about 10% of our volumes. Yes, you are right, when elections happen — when general elections happen, generally, our business on government goes up. So we believe in the second half and not just second half central government, but with the heavy state elections calendar also, there will about five state elections. There also the business will also go up. So we do expect government business contribution in this year would go up as has always been in the last year of central government. So that we believe it will go up. Right now, it is 7.4%.

The third is on non-FCT, yes, you’re absolutely right to bring this that the event business has been very subdued, though on a full year basis, we did really well. If I was to give you in the solution business, there is only one element, the way we define solution business. The event business has not fired, but others which is the TV properties business has not fired, which are our large events like Mirchi Music Awards in different languages. We were not able to do it because there have been very, very subdued environment in the market or sponsorships.

To give you perspective, if you look at any large awards in the movie awards or large music concerts have not happened in Q4, be it to give you certain names, the large event, Filmfare, IIFA were postponed. Supersonic was a loss making event. So lot of our events has not seen traction which are one way sponsorship events. So barring that, if I were to give you some numbers, our solutions business without the TV property which is large chunk in Q4 has grown 82% for us. So that’s the business we have seen in the solution business.

So we are very confident that the solutions business will continue to grow. We believe this is one-off because of the global recession pressure and the overall advertising sentiment have been a bit subdued. It remained in Q4 like this. But going forward in the next half, we believe post Diwali, this should come back and we will be having the same number. So to answer you on this TV properties, I believe it is a one-off quarter for us like them.

On the digital, I’ll ask Sanjay to answer, but just to tell you, yes, we believe we will continue investing in digital the next year also. We believe that’s important to be future proof on the market and we will continue in the same lines. We have been always been very patient spenders. We’re not like VC funded where we just want to burn money, but we are a very — we have a common strategy where we go very, very specific and very strategic nature investment we do. So in line with what we have invested between INR25 crores and INR30 crores, we should invest in the same manner next year also.

Regarding the capitalization, I’ll ask Sanjay to answer.

Sanjay Ballabh — Executive Vice President, Finance

Yeah. So Subrata, what happens that whatever we invest in digital part of the business, we charge-off everything whether it is for creation of content or otherwise everything to the P&L in the relevant month and quarter. We do not go the capitalization route at all.

Subrata Sarkar — Mount Intra Finance — Analyst

And sir, we will continue to do so, sir.

Sanjay Ballabh — Executive Vice President, Finance

Yes, we will

Yatish Mehrishi — Chief Executive Officer

And we have seen traction also, Subrata. If you look at our numbers, whatever we projected numbers for ourselves in the first six months, it’s just been six months if you look at, so it’s not been a long journey, just it has been six months. And if you look at digital is always — the investment goes initially and then you see a hockey stick type of return coming in. So we have started seeing traction. We have just opened up on advertising on our own platform and we firmly believe it will deliver us our expectations in the coming years also.

Subrata Sarkar — Mount Intra Finance — Analyst

Great. sir. Sir, just two questions. One on the non-digital, that solution side. Sir, do you think — please correct me if I’m absolutely wrong, but is this — you have mentioned other cases also. So is this related to the hyperactive advertising scenario in the sports and IPL scenario? So is it hampering, number one, our kind of a business in terms of sponsorship and if so, do you think this is more of a timing issue like in — during like — once that get over or let’s say in other quarters when those events are not there, we may get back to the normal level. This is one on the non-FCT — digital side.

And second, sir, on the digital side, if you can give — throw a little more color like how we are thinking of like monetizing it? Is it intel, the advertisement or we have thought of some different model? So anything on — if you can throw some color on the — like how would you like to monetize the digital asset of our company?

Yatish Mehrishi — Chief Executive Officer

Okay. So let me answer you first on the non-FCT part which you said, yes, this year has been a tough year. If you look at all industry, see media is dependent on other industries how they perform because the other industry spend on the media. Media is also one category which spends on media. But all categories if you look at, Q4 has been bit subdued. So the marketing spend goes down when the markets are — when all industries are not doing well. So we are dependent on from that perspective. So I would put it across to the global fears of recession, which were there, which didn’t impact India largely, but there were certain fears and people then at that time tightened their first thing to spend.

So I believe Q4 became issue that reason. Otherwise, I don’t see it happening every time. We are not — this is the first time in 14 years we were not going to do it. So IPL has also been in the same time. So it’s nothing to do with sports than this time events don’t happened. Sports and entertainment both are bread and butter for Indian consumers. So they look at both the events very differently. So I don’t think either of the niche, I would say, complement each other. So I would not be worried about the sports investment happening and that’s the reason the [Indecipherable] have not happened. It’s largely with the overall market sentiments. So that’s on your FCT, we’ve answered it.

The second on the digital thing, as I said, it’s a combination of revenues what we do. So there are key things that platform. When you own a platform, you get consumer data, so you can monetize on those basis. You put up stories, it could become subscription, it could become advertising funded. So it’s a combination of strategy and also with our social media assets and everything going up, our solutions business also gets helped by this for our social media assets. So our revenues from solutions also increase. So I would not say there’s one strategy. It’s a mix of three, four things. Last quarter, you also spoke about our audio inventory platform MPING [Phonetic], which also gives us revenue. So digital is a very cogent strategy which covered both revenue from the platform, plus advertisers also.

Operator

Thank you very much. The next question is from the line of Ansh Manek from Equirus Securities. Please go ahead.

Ansh Manek — Equirus Securities — Analyst

Good evening. Thanks for the opportunity. Sir, with respect to the radio revenues, if we want to compare the realizations too the pre-COVID level, what would be the discount level?

Yatish Mehrishi — Chief Executive Officer

That’s about — Ansh, about 35% on the quarter basis. And it’s compensated by the increase in volume, which is 36%. So the volume and price have complemented on these things.

Ansh Manek — Equirus Securities — Analyst

Okay. Got it, sir. And the second part, sir, we understand with respect to Q4 trend regarding the headwinds for the advertising spend. If you can share the outlook for the — outlook just for April. So it would be really useful.

Yatish Mehrishi — Chief Executive Officer

Ansh, generally, we don’t and Sanjay had also mentioned in the — before this that we don’t provide guidance. But to give you a perspective, it’s been in line with expectations.

Ansh Manek — Equirus Securities — Analyst

Okay. Got it. And the third part was with respect to capital allocation, so we have handy cash balance. So if you can share the capital allocation part?

Yatish Mehrishi — Chief Executive Officer

So more precise with your question, Ansh?

Ansh Manek — Equirus Securities — Analyst

So I understand that most of the cash may be used for the investment purpose, right? So whether the investment would be in the business of radio or more towards the non-solution — solution-based business?

Yatish Mehrishi — Chief Executive Officer

Okay, Ansh. So the entire cash balance currently as we closed the year stands at INR265 crores. And as you know that radio as a business is always front loaded in terms of heavy capex investment, which the company did. Now we are at the very sweet spot of being in the middle of the 15 year term. Most of our stations has just covered 7.5 and eight years of the license period of the current license regime. Coming back to your question, basically, our capital allocation will be completely guided by the company’s investment into the digital space. That is anyway the new stream of the business coming up and we expect to invest similar amounts, which we did in the last year — last financial year.

And other than that, our overall working capital management is going to be tighter. We are collecting out dates [Phonetic] better. We in fact collected dates far better than we did last couple of years — in FY ’23. And therefore, you can expect some kind of decision coming out of the management of the company in coming quarters, though, we are not in a position to give you the right details of that or intricate details of that, but there are lot of discussions happening in the company within about allocation of the cash we have in hand.

Ansh Manek — Equirus Securities — Analyst

Okay. Perfect, sir. Thanks.

Operator

Thank you. Next question is from the line of Sameer from Prince [Phonetic]. Please go ahead.

Sameer — Prince — Analyst

Hello. I just wanted to understand that currently what loss we are having of other businesses, these continuing the businesses. how long this will continue and how much is left to write-off?

Sanjay Ballabh — Executive Vice President, Finance

So let me take this question, Sameer. Basically, the impact you are seeing in our current year financial about the exceptional item that’s present losses we have faced in international business, nothing related to domestic operation at all. So let me tell you that based on the conservative accounting assessment in line with our auditor’s assessment as well, we have taken that entire hit in the FY ’23. That amount stands at INR17.78 crores. And currently we do not expect any further value erosion in terms of network to happen in FY ’24.

Yatish Mehrishi — Chief Executive Officer

So if you look at, Sameer, both domestic and international, even in international business, whatever we have closed on has happened in FY ’23. We don’t foresee anything in FY ’24. So I don’t see any further losses in existing business happening.

Sameer — Prince — Analyst

Got it. And any chances of an uptick in the private of our India business? I mean, ad revenue are we increasing that or will it remain stable in FY ’24?

Yatish Mehrishi — Chief Executive Officer

Sameer, as I said, I was answering earlier in media, it’s not like other industries have increased price any month. Generally, it’s — anyway, it’s a volume driven thing as the volume — as the demand increases, we can always increase price and generally, this happens in media. The prices go up before the festive period that’s when the demand starts. So I would say early second — end of first half, early second half is when it starts looking at. So generally, the first quarters are not where the pricing goes up.

So I would be bit ready that to say that the price might go up in quarter one. It will remain — happy part is that we have now bottomed out in the last year. We have gained price in the quarter four, though marginal and we believe that the story is going to go up. Very happy to see a lot of clients coming back, but the clients are much more than they were at pre-COVID levels. So the client attraction to the medium is at all-time high. The volumes are at all-time high. Yes, price remains a concern for us, but I believe it will take few years to go back to the pre-COVID levels. It’s not going to happen only this year. It will happen over a few years and to start with, it might happen in the second half of the year. We have large volume headroom. So if there is money on the table, I would rather have play the volume and then not let go the revenue in the current situation, the current market situation.

Sameer — Prince — Analyst

Got it. Just a last question. Are you working to reduce cost accordingly because the prices are similar not going up.

Yatish Mehrishi — Chief Executive Officer

Yes. That’s a continued thing, be it even if the price was going up, we are very, very clear on running a very efficient operations. As I mentioned in my opening remark, we have saved almost INR52 crores against pre-COVID levels. So it will continue doing that and we keep innovating. Anything that COVID has — the only positive the COVID has held us to relook at our all models again. So we keep inventing — reinventing our real thinking how do we start business, how do we do business today and making our operations more and more efficient. So as we said in FY ’23, we’ll save INR53 crores and that will be a continuing thing even in FY ’24. We’ll have very tight slip.

Sameer — Prince — Analyst

Great. Thank you so much.

Operator

Thank you. Next question is from the line of Shekhar Mundra from Ivok Commercial [Phonetic]. Please go ahead.

Shekhar Mundra — Ivok Commercial — Analyst

Yeah. I just wanted to understand what would be our EBITDA without the digital business in FY ’23.

Yatish Mehrishi — Chief Executive Officer

Just a moment. In FY ’23 would be INR93.3 crores, which was a growth of 88% at a margin of almost 23%.

Shekhar Mundra — Ivok Commercial — Analyst

And what would be the split of this INR93 crores between the traditional and the solution business?

Yatish Mehrishi — Chief Executive Officer

Yeah, just a minute. INR40 crores is non-FCT and INIR50 crores, you can take it as remaining.

Shekhar Mundra — Ivok Commercial — Analyst

I’m sorry, I didn’t get you.

Yatish Mehrishi — Chief Executive Officer

INR40 crores non-FCT. And the balance would be on the flip side.

Shekhar Mundra — Ivok Commercial — Analyst

Okay. And how much have we invested in the digital business till now like till date since we have started investing?

Yatish Mehrishi — Chief Executive Officer

About INR30 crores to INR35 crores.

Shekhar Mundra — Ivok Commercial — Analyst

That was this year’s investment, right or the — I’m asking about the total investment like in digital.

Yatish Mehrishi — Chief Executive Officer

I said total investment. That would be in the end of the last year. So largely investment in this year only.

Shekhar Mundra — Ivok Commercial — Analyst

And what was the revenue from the digital this year?

Yatish Mehrishi — Chief Executive Officer

Total revenue as I said, it’s about — if I consider total, it’s 10% of our radio revenues — 12%, about INR7.93 crores.

Shekhar Mundra — Ivok Commercial — Analyst

INR7.93 crores. And what’s our plan like — what this INR30 crores where have we exactly invested, like is it to build…

Yatish Mehrishi — Chief Executive Officer

That was quarter four at INR7 crores. Overall, digital from all segments was INR34 crores for the full year.

Shekhar Mundra — Ivok Commercial — Analyst

Okay. So if we have invested like INR30 crores — for the year at INR34 crores, the revenue, so even digital also at a breakeven or are we making losses in digital? How is that working?

Yatish Mehrishi — Chief Executive Officer

So the way digital is — as I said, it’s a composite revenue from all our business segments. We are investing in the platform. The platform has given about INR7 crores odd this year, only the platform revenue. But if you look at the digital revenue of INR34 crores, INR10 crores come from our content solution. We do shows like What Women Want, Kareena Kapoor Khan Show, that type of shows we have given INR10 crores. The platform has given INR7 crores, which is where the larger investment is happening and digital components from our solution business gives us about INR16 crores odd.

Shekhar Mundra — Ivok Commercial — Analyst

Okay. All right. Got it. So — and where is the INR30 crores exactly invested and is it to build up your YouTube number of followers, your social media followers? So where is that INR30 crores invested?

Yatish Mehrishi — Chief Executive Officer

Couple of things we bring on the platform side, build a platform, build up a app. So there is lot of on the tech side, which had happened — which largely has happened in FY ’23, which is a continuing thing, but this investment happened in FY ’23. Then we’re making your content bank. We have about almost more than 3,000 hours of stories, content available on our Mirchi Plus app. So investment goes on that side also. Apart from — we do very less performance marketing. Unlike other players, we are not — we are playing a patient game. We don’t want to just burn money and gain more and more subscribers because that’s the right way to do it. And so we have very less on the marketing, but largely content acquisition, content making and the tech side.

Shekhar Mundra — Ivok Commercial — Analyst

And so what’s the plan? Like for the next year, I understand we plan to spend more INR30 crores. So that is also mostly on the content acquisition side only?

Yatish Mehrishi — Chief Executive Officer

Yes. So we want to build a content. We have just started opening up our platform for advertising. So far, we were just building content. You need to build some critical mass before you really go and get the numbers right. So we believe another year or so, we’ll give you that. And the revenues from the platform will start breaking down in this year and hopefully FY ’25, we’ll see much more healthier revenues from the platform. Digital revenues will continue to grow from all segments, but from pure platform, it will take a year, year and a half. And you’ve seen as the numbers grow, then the revenues give you a hockey stick type of growth. And initially, it will be very, very trickled down.

Shekhar Mundra — Ivok Commercial — Analyst

All right. Got it. And what’s the plan for the content, like how much content do we plan to acquire? Or is it — I mean, or will the rate of content addition slowdown after a couple of years, like what’s the plan there?

Yatish Mehrishi — Chief Executive Officer

See, it’s been very, very early days for us. We keep running lot of experiments and keep learning every day. We’ve been very concentrated on certain languages. India is a large country with so many languages and all. So we’re re-working on the strategies. I would not be in a position to share how many hours and all right now, but yes, we look at opportunities, white spaces available in the market, which languages are doing well. It’s a non-music platform, which we are working on. So it’s on podcast, stories and all. We see — even if you look at any report, they’re going to grow big time. And that’s the reason we want to look at all languages, figure out which are the white spaces where we want to grow. And from that, we design our strategy to look at the content, but just keep growing. So we have now in-house also and out. So it’s not — not everything is outsourced, not actually acquired. We have a strong 300 member creative team who also helped us driving this content and then, we also acquire. So it’s a mix of both.

Shekhar Mundra — Ivok Commercial — Analyst

All right. Got it. And on the capacity utilization side for the radio business, what would you say the capex utilization for FY ’23?

Yatish Mehrishi — Chief Executive Officer

See we were about 69% and a few level this year. This is to give you a perspective, it’s at 13 minutes an hour for 17 hours. So we still have lot of headroom available and I think Mirchi is at the best space in this with the headroom available to utilize all the volumes coming in the market, though at a lower price, but competition doesn’t have so much volume available. So we are really, really in a very sweet spot right now at our 70% capacity utilization and which I said is measured at 13 minutes an hour for 17 hours. So lot of inventory still available for us.

Shekhar Mundra — Ivok Commercial — Analyst

Okay. All right. Got it. Okay. Thank you and all the best.

Yatish Mehrishi — Chief Executive Officer

Thank you.

Shekhar Mundra — Ivok Commercial — Analyst

And one last question, just one last question. Hello?

Yatish Mehrishi — Chief Executive Officer

Yes.

Shekhar Mundra — Ivok Commercial — Analyst

Yeah. So — and on the stock price front, our stock price has not been doing well. And so are there any plans of like doing buybacks to create value for shareholders because we have the cash available also?

Yatish Mehrishi — Chief Executive Officer

Shekhar, not in a position to disclose that. We keep discussing with Board. I hope you give us recommendation that people keep buying.

Shekhar Mundra — Ivok Commercial — Analyst

Okay. All right. Thank you.

Operator

Thank you. Next follow-up question is from the line of Deepen from TrustLine PMS. Please go ahead.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Yeah. Thanks a lot for the opportunity again. So just want to understand the price realization difference between our Mirchi Plus app and as well the YouTube ads which we’re realizing earlier.

Yatish Mehrishi — Chief Executive Officer

Deepan, it’s very difficult to quantify because it varies at a different level. I can tell you on the margins. Whenever you sell your own inventory, the margins will always be better. Revenues is a function of you’ve just started doing it. So YouTube has been built — our social media assets at on YouTube, Facebook has been built over here. It should take some time and there is a well oiled machinery which is selling it, but I can tell you the margins are always better because it’s your own platform.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. And so this digital business excluding platform for the Q4 looks like it has fallen from the previous year and last quarter also. Is there any specific reason for that?

Yatish Mehrishi — Chief Executive Officer

Can you repeat it?

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Digital business portfolio revenue excluding that platform number, so are we seeing some declines? So what is the reason for that?

Yatish Mehrishi — Chief Executive Officer

So I think the TV properties contribution would have gone down that’s the only difference I would see the digital business going down because the TV properties business will do well. So the elements from TV properties would have gone down.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Well, that’s the [Indecipherable] solution overall, right? So you’ve signed digital which you were used to refer even before platform. That used to be in the range of INR7 crores to INR10 crores quarterly run rate, right? So that if we exclude the platform also, now that is around INR4 crores, INR4.5 crores. So that’s why…

Yatish Mehrishi — Chief Executive Officer

Yeah. So as I said, last sponsorship events have not happened. So you look at digital content, we did Gauri Khan in quarter three. Quarter four we did a Kareena Kapoor Khan show. So couple of activities we have got there because of network sponsorships being there. So from that perspective only, I would say it’s been little muted, but otherwise, it’s been on track, Deepan.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. And has been the MPING business doing? So what kind of contribution we can expect this year? And over three year period, what kind of contribution we are expecting from them?

Yatish Mehrishi — Chief Executive Officer

MPNG has been very, very exciting for us, has been just four months, Deepan. I don’t want to extrapolate to a year, but if you look at AR, it’s very, very healthy. One business we are very excited is about MPING. So I don’t want to give you a number for the full year. But yes, it can be very high double-digit crores business in few years.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. So what kind of streaming players we have already tied up, so what kind of activities we are doing to scale up this business? If you can throw some light on that?

Yatish Mehrishi — Chief Executive Officer

Deepan, we have only looked at audio OTT players and we have tied up with most of them. You ask for it and we have — all large audio OTT players have been tied up. We’re still not opened on video, which we can do, but we don’t want to do, concentrate on only audio OTT and most of the players have been tied up.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. So audio OTT business currently what kind of ad revenues they are doing currently? And what kind of potential this audio OTT can go upto?

Yatish Mehrishi — Chief Executive Officer

Sure. So I’ll tell you how it works. If you look at Spotify today, if you consume Spotify without subscription, there is hardly any ads. In India, the way audio OTT or digital has been sold is largely by display ads or — in audio OTT has been largely playlist. It could be a Maruti playlist or a Britannia playlist. In stream advertising has never happened in India. Being the leaders in the audio advertising space when I say radio enterprising, we have the largest team strength and I think the potential is very, very huge with our reach to number of cities, number of clients and our sales force. The potential is very, very high and I don’t see any of the existing streaming player can look at it.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Okay. And so regarding this payout — our dividend payout, so we have a huge cash available with us and we are spending only INR30 crores, INR40 crores in the digital. So what are our plans to give it back to shareholders in terms of dividend or buyback? So are we coming off some kind of details on that front? That will do for quite long period of time investors have been foreseeing this for a long period of time.

Yatish Mehrishi — Chief Executive Officer

Yeah. So Deepan, I completely agree with you. You are absolutely right on that point. It is really we are listening to this kind of comments and questions from the investors for a very long time. We made the Board aware of this, but as you will appreciate, this is completely Board’s view and we will be only able to come back to you the moment we get any kind of green signal from them.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Because the stock price has not been moving up, because the cash is piling up. So if you do some action on that, our ROE will improve and stock also will improve on that from. So [Indecipherable] payback for company. Thank you.

Yatish Mehrishi — Chief Executive Officer

Definitely, noted. We have already communicated to our Board about the investor feedback. We will again get in touch with them.

Deepan Sankara Narayanan — TrustLine Investment Solutions — Analyst

Thanks. That’s it from me.

Yatish Mehrishi — Chief Executive Officer

Thank you, Deepan.

Operator

[Operator Instructions] Next question is from the line of Subrata Sarkar from Mount Intra Finance. Please go ahead.

Subrata Sarkar — Mount Intra Finance — Analyst

Yeah. Just two follow-up questions. One is like how much cash flow actually we have generated from this yea,? basically if you highlight the number like cash flows from operation and then how much free cash flow basically after the capex of INIR34 crores on digital?

Yatish Mehrishi — Chief Executive Officer

Okay. So Subrata, actually, we have uploaded our results in the stock exchange sties. So you will get minute details from that, just to give you the answer. Our net increase in cash and cash equivalent for the year is INR38 crores almost, which is majorly fenced by INR32 crores from operating activities and about INR6 crores from investment activities — investing activities.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. Perfect. Sir, now just if you can make — help us to understand like if there is some [Indecipherable], like one thing which we are aware like generally radio being localized business. Generally, they do relatively better in terms of advertisement when the economy is not really at doing great basically, when there is some pressure on the economy and they are like local –our business being largely local like the local, they try to communicate through this radio. So which is — I suppose there is some similarity currently in the Indian context when rural demand is not picking up and like there was some pain in the system.

So is — this type of economy, is it great thing for hours in terms of ad revenue generation? Because what I can remember like historically we have done fabulous previously during this kind of a scenario. So is it right or what is the difference this time in this context. And second sir, like if you can throw some light in this context only, some light, like how can we get as a outsider some understanding of the ad revenue on radio? How can we delayed ad revenue on radio to some other parameters which we can look into and get a feel of how it will do in terms of ad revenue in radio?

Yatish Mehrishi — Chief Executive Officer

Okay. Subrata, to answer your question, yes, when the economy doesn’t do well, mediums like radio do well. To give you a perspective, pre-COVID, our contribution from large clients or retail clients both as corporates and retail what we say used to be 50/50. Now the retail contribution has gone up by 15%. It’s almost like 65%, 35%. It’s the corporates which are not spending. The retail guys are spending much more, which is a very healthy sign for radio medium because the shop front or the car agency is trying to spend money at a local level. The large corporates are holding back to manage because overall market have been tight. So large corporates are not spending.

So you’re right in a economic situation like this, mediums do well, but this time, it’s been a bit different and the large corporates have not spent much. But the retail clients are spending much. As I said in my earlier remark also that the clients — number of clients are much higher than pre-pandemic also. So that’s a very, very healthy sign for the medium, the volumes are very high. The number of clients are very high. So — and they are coming back again and again. So it’s a very healthy sign. It just needs the economy to revive and get the right sentiment to come and then we leverage the business as we have always done in this medium.

Operator

Thank you. The next question is from the line of Ansh Manek from Equirus Securities. Please go ahead.

Ansh Manek — Equirus Securities — Analyst

Thanks for the opportunity. Sir, what would be the utilization level last year in case of radio business?

Yatish Mehrishi — Chief Executive Officer

Full year basis you are saying?

Ansh Manek — Equirus Securities — Analyst

On the quarterly basis, sir.

Yatish Mehrishi — Chief Executive Officer

On quarterly, it was. 56%. This year, it’s 62%. Sorry, on all verticals, if I were to say, all put together, it was just radio. Against 66% last year, this year it’s 76%.

Ansh Manek — Equirus Securities — Analyst

In case of radio, right, sir?

Sanjay Ballabh — Executive Vice President, Finance

No, no. Radio was the earlier number which Yatish said. So it was 56% for the last quarter Q4 FY ’22 and it is 62.6% current Q4 FY ’23.

Ansh Manek — Equirus Securities — Analyst

Okay, sir. Thank you.

Sanjay Ballabh — Executive Vice President, Finance

Yeah.

Operator

Thank you. The next question is from the line of Manoj Shah from Maxco Investments [Phonetic]. Please go ahead.

Manoj Shah — Maxco Investments — Analyst

Yeah. Thank you for the opportunity. My first question is with to the pricing. Any comments on how is…

Yatish Mehrishi — Chief Executive Officer

Manoj, can you repeat it? Be a but louder, please.

Manoj Shah — Maxco Investments — Analyst

Yeah. Can you comment on the pricing, how is this compared to Q4, right, okay? And second, as you have seen there is a shift from earlier as it has been some [Indecipherable] media to television to mobile. So how you are trying to retain customers on the radio? So what the industry is doing and trying to retain the customers towards them?

Yatish Mehrishi — Chief Executive Officer

So a couple of points on the first. On the price, let me address there. As I said, yes, the price pre-COVID level is still down by 35%, but I would say in FY ’23, it’s bottomed out. In Q4, we have seen slight uptick on the price. So I believe now we can always look at the price on a upward trend, though, it will take few quarters to go to a healthy price and maybe the pre-COVID levels will take a year or more to come back at that level. So I don’t think it’s happening in other six months. So that’s on the price, Manoj.

The second, you are saying if I understood correctly, you mentioned in the listeners have moved from radio to digital or TV. See the media is — the entire media industry has become fragmented. There is lot of content available, be it radio, television, OTT apps. So it — now we’re no longer fighting a media. We’re fighting a time of a person and radio being the most economical medium, it’s poor ones medium, it’s subscription free and it’s — companion medium will always remain. And that’s the reason if you look at our listenership numbers still persist and the advertiser interest.

The biggest answer I would give is the number of advertisers are increasing, That means the medium is working and people believe in radio.That’s the reason advertising goes up. So I think the biggest indicator that the medium is healthy comes from when the advertiser is spending money on our medium.

Manoj Shah — Maxco Investments — Analyst

Okay. So [Indecipherable] earlier like people are traveling, they’re listening to the FM radio channels and so on kind of thing. So now with everything moving back to the mobile, so it’s basically [Indecipherable] as you are saying that to get the customer’s time or the client’s time, so are you saying that the radio or this medium is lagging behind from the OTT or the mobile, people are spending more time on the mobile capital? And do you think we are reading on news that FM radio by default should be there in the future phone. There is some industry-wide request there. So anything you are doing further on that?

Yatish Mehrishi — Chief Executive Officer

Yeah. So it’s a welcoming thing. Lot of radio listenership happened on mobile. It still happens on mobile. There are certain smartphones, certain platform where mobile phone was not there. So we welcomed that decision. So — and that’s what I would say on the radio, because the listenership does happen on-the-go. A lot of people are — mobile has become a very personal medium and because it’s a medium for all levels of all set of people, it continues to be. And because all consumptions happen on the mobile that is the reason I would say. But otherwise as I said, the listenership is still very, very healthy. People do listen at home, listen in cars, the way the traffic is going up, people listening on mobiles in metro or the car listenership.

We have done internal research even in cars, even with streaming devices available, your own music available in cars. 85% people listen to music through radio only because it’s not about just listening to music. It’s about your friend has a job. It’s is a companion medium, you get to know about traffic, get to know what the utilities. So the listenership in cars is going up. Listenership in mobiles is very, very high. People are back on road. So radio is a great companion medium. So I would say the listenership is very, very healthy with this vision of advisory on smartphones being [Indecipherable] being compulsory. It’s a very well coming thing.

Manoj Shah — Maxco Investments — Analyst

And how do you feel like on this current year and maybe similar to next year, you have a lot of collections lined up. So do you expect the volumes to go up with spending by the government or the political parties?

Yatish Mehrishi — Chief Executive Officer

Yes. Always it has happened. If you look at empirical data also, the last year before the general election has always been very, very active on government spend, not just the central election because there are five state elections also happened in the last year. So it’s always a very, very active season for government spending and we do believe this year also it will be the same.

Manoj Shah — Maxco Investments — Analyst

Thank you.

Operator

[Operator Instructions] As there are no further questions, I will now hand the conference over to the management for closing comments.

Yatish Mehrishi — Chief Executive Officer

Thank you, Nirav. Thank you once again for joining in and listening to us patiently. Thank you for your questions. We work hard to drive ENIL revenue and profitability ahead and good day to you. Thank you very much.

Sanjay Ballabh — Executive Vice President, Finance

Thank you.

Operator

[Operator Closing Remarks]