HT Media Ltd (NSE: HTMEDIA) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Aaditya Mulani — Investor Relations
Anna Abraham — Head-M&A, Investor Relations, Treasury and FP&A
Piyush Gupta — Group Chief Financial Officer and Chief Executive Officer Strategic Investments
Analysts:
Deepak Sharma — Analyst
Mehul Pathak — Analyst
Rakesh Wadhwani — Analyst
Presentation:
Aaditya Mulani — Investor Relations
Good afternoon, ladies and gentlemen. This is Aaditya Mulani from the HT Media Group. I would like to welcome you all to our second quarter financial year 2024-’25 Earnings Webinar. [Operator Instructions]
With this, I now hand over to Ms. Anna Abraham, CFO, Hindustan Media Ventures Limited and Head Investor Relations, HT Media Group. Thank you and over to you Anna.
Anna Abraham — Head-M&A, Investor Relations, Treasury and FP&A
Thank you, Aaditya. Good afternoon, everyone. Welcome to our earnings webinar on the second quarter results financial year ’24-’25. The results of Hindustan Media Ventures Limited was announced yesterday and those of HT Media was released earlier today.
Joining me on today’s call to discuss the results are Mr. Piyush Gupta, Group CFO; Mr. Pervez Bajan, Head Financial Controllership and Taxation and members of our Investor Relations team. Our comments during this webinar will follow the presentation slides. These slides and the financial statements are accessible on stock exchanges and on the Investor Relations page of our website.
As we start with the presentation, kindly take note of the cautionary statement on any forward-looking comments during the call. In line with our usual practice, we would not be issuing any specific guidance on revenue or earnings. This slide gives our Chairperson’s comments on the performance of the Company for the quarter, and I quote. “The second quarter of the current fiscal saw an improvement in the overall performance of your company. Our revenue grew and operating profitability increased. This performance can be attributed to our focused efforts on pricing, cost management and efficiency as well as a conducive business environment.
The Print business posted better numbers on the back of pricing-led advertising growth, which, coupled with our emphasis on operational efficiency resulted in enhanced profitability.
While the Radio business was flat, the Digital business saw considerable upside in revenue on a Y-o-Y as well as quarter-on-quarter basis, largely driven by growth of OTTplay business in which we continue to invest.
In the run-up to the festive season during the ongoing quarter, the Company aims to boost growth on the back of a pickup in both retail and commercial market activity. Across businesses, we remain committed to enhancing the audience experience, bringing innovative solutions to advertisers and engaging content to our customers.”
This slide presents the agenda for the day. We will start with an update on the overall consolidated performance followed by the business wise statements after which, we will open for a Q&A session.
With this, now I hand over the call to Mr. Piyush Gupta.
Piyush Gupta — Group Chief Financial Officer and Chief Executive Officer Strategic Investments
Thank you, Anna. Good afternoon, ladies and gentlemen. We’ll quickly go over the second quarter’s performance. So this is a view of the consolidated financial summary. As you can see, there’s been a strong revenue growth on a sequential as well as a Y-o-Y basis.
We’ve grown top line by 12% on a Y-o-Y basis and the same number on a quarter — quarterly basis as well. As you can see, there’s a substantial improvement in EBITDA as well and there’s a positive cash flow during the quarter.
Now we’ve come to the business unit performance. Straightaway, starting with Print business. As is visible from the numbers, there’s an improvement in Print segment operating revenue led by advertising revenue on a Y-o-Y as well as a quarterly sequential basis as our revenues came at INR252 crores as against INR244 crores in the same period last year, which is a growth of 3% and 15% on a sequential basis. And our operating EBITDA came at INR19 crore against a marginal loss in the same quarter last year with a substantial growth therefore.
Moving on to English. As you can see, the advertising revenue has improved Y-o-Y basis, commercial revenue and a quarter-on-quarter basis, better volume in Government segment. Circulation revenue rose sequentially aided by higher number of copies.
Coming on to the Hindi segment. There’s a marginal decline in advertising revenue on a Y-o-Y basis. However, sequential improvement due to better yields and volume traction. Growth on Y-o-Y basis seen across key commercial categories, except retail, FMCG and industrial, and there’s a decline in circulation revenue on a sequential and annual basis.
On our Radio segment, operating revenue remains flat with a drop in operating margins marginally. Digital, we saw strong growth on a yearly basis across all segments, especially in OTTplay and operating losses on account of investment in OTTplay continues as we continue to invest behind OTTplay.
With that, we come to the end of the presentation. I hand it back to Anna.
Questions and Answers:
Aaditya Mulani
Thank you, Piyush. [Operator Instructions] The first question is from the line of Deepak Sharma [Phonetic]. Please introduce yourself and ask your question.
Deepak Sharma
Yeah. Hi. This is Deepak. I’m an individual investor. My question is on the OTT side. With Reliance JioTV+, do we see a threat over there because they have the distribution? And what’s our strategy with that behemoth looking at us on something where we have been bleeding for the last couple of years?
Piyush Gupta
Yeah, Deepak, great question. Look, we don’t see a particular threat. So first of all, if you segment the market, Deepak, in Reliance Jio, this is basically going through the broadband. Whereas our strategy is to go into Tier 2 and Tier 3 towns, where broadband or fiber is not so easily available.
However, having said that, we also have a Reliance Jio feed coming on to our OTT platform. So that’s the latest tie up that we have done. So that’s also available.
And the last point that I’d like to mention is the pricing. So Reliance Jio, of course, is bundled with the ISP service provider. Here, our pricing is very, very substantially competitive for the Tier 2 and Tier 3 towns, which we’ve been maintaining, we’ve been doing. So with the combination of that, I don’t think there’s a direct head-on competition.
Market sets are very different, the product is very different and the product delivery is very different. So on a OTTplay with a single login, you get seamless access to content, which you can scrape through a multiple platform unlike Jio where you’ll have to — once you are there, you’ll have to open multiple platforms and get into this whole stuff. So the content, the delivery, the pricing and the target audience set is very different in both the products.
Deepak Sharma
Sure. Thanks. My question was on JioTV+, which was launched last month because I think that is operating in the same landscape.
Piyush Gupta
Well, I off the cuff don’t have too much details. So why don’t we send those details across to you? But as I said, my first two-part [Phonetic] of the segment still kind of applies to that because the target audience even for a Reliance JioTV+ because that goes through the broadband wire and the fiber will still hold true. But on the third part, I’ll check up on the content and let you know, but more or less, the answer still remains the same.
Deepak Sharma
Sure, sure.
Aaditya Mulani
The next question is from the line of Mehul Pathak [Phonetic]. Please introduce yourself and ask your question.
Mehul Pathak
Can you hear me?
Piyush Gupta
Yeah. Hi, Mehul.
Mehul Pathak
Yeah. Hi, Piyush, Anna. Happy Diwali.
Piyush Gupta
Happy Diwali to you all. Seasons greetings.
Anna Abraham
Happy Diwali.
Mehul Pathak
Yeah. Thank you. I have a few questions to ask. My first question is on Digicontent. I had reached out to the company secretary twice and second time I heard back from him in a very cliched manner. My question was that if HTDS is a 100% subsidiary of Digicontent, why is HTDS is buying back HTDS shares? It will remain 100%. Usually, a buyback happens when the shares for the shareholders are listed cheaply, not trading at intrinsic worth, and you want to return value to the shareholder. Now here the value — the shareholder is Digicontent. But HTDS is buying back its own shares, which are 100% with Digicontent only. So, I never got —
Piyush Gupta
Okay. So, Mehul, let me try to address and Anna can fill you on the details. Look, if you’ve analyzed the DCL balance sheet, you already know that there is a substantial loan sitting in DCL and this buyback basically resulting into payback of the debt.
Now I understand your point of view that the cap table, a 100% subsidiary will still remain to be a 100% subsidiary. But once you reduce the cap table and reduce the debt, etc., return ratios will improve. But I’ll ask Anna to kind of elaborate on that as well.
Anna Abraham
Yeah. So Mehul, Happy Diwali to you too. I think Piyush addressed it. The cash — there is the cash-generating company, it’s HT Digital Streams. However, their parent company Digicontent Limited, does have a substantial loan which impacts the consolidated results from the interest costs charge that the consol results bear on such a loan. And of course, there’s a time line for repayment as well.
So therefore, it is important for Digicontent to be able to pay back the loan. And since the cash is in the operating entity, the buyback enables the cash to be sent to the parent company for a repayment of the loan sitting in the parent company, which impacts the overall — benefits the overall financials of the consolidation.
Piyush Gupta
Yeah. So apart from the return ratios improving, Mehul, you also have to understand, HTDSL, which is the OpCo under DCL is not being starved of any capital requirement. I mean this is the surplus cash that it is generating and which is — it is using to pay down the debt at the parent company level is all that is happening. So at the end of the day, it is accretive for shareholders only.
Mehul Pathak
Piyush, one thing is this was not — what you have stated is not part of the company secretary’s response to me. Okay. Secondly, you all know even — there was a separate call with Anna when the merger and all that was being discussed that I had and we all know why the debt is there on the Digicontent books also. Okay? Now —
Piyush Gupta
Well, the debt is there on the Digicontent. If you’ve been — and Mehul, you’ve been tracking this company for a while, this entire business was purchased for a certain price and hence the debt came onto the books. Now by multiple buybacks, this debt has been partially retired and therefore, the return ratios are improving. And all this is happening whilst the operating performance in the wholly owned subsidiary is doing well and all the investments are going in. I think that’s the sum and substance. So it is definitely accretive to all the shareholders in improving the ROCE ratios.
Mehul Pathak
Yeah, I know. But when it’s a 100% subsidiary, obviously the very fact that that is the finance structure designed, there is always going to be some issue or the other in taking money from a subsidiary to the parent. So either in form of a dividend or a buyback or whatever. And I am sure all this would have been thought through before having this sort of a financial structure. Nevertheless, my point is that all this financial engineering optics are not healthy and doesn’t look good.
Anna Abraham
Mehul, I am sorry.
Mehul Pathak
So that is my — that is my feedback.
Anna Abraham
Yeah. We take your feedback. However, we are not doing anything which is inappropriate or not allowed by law.
Mehul Pathak
I’m not saying that it is not —
Anna Abraham
We are following a process which is allowed by law to settle the financial liabilities. If the merger had happened, the financials and the entities would have looked different. But in the absence of that merger happening, which was also the privilege of the minority shareholders to decide, if there is a financial liability, it has to be settled. Otherwise, there are repercussions, which fall to the company and its share — its stakeholders as well. So we are, with full disclosure, with full transparency, following actions, which are important to settle the liabilities of the company as it exists.
Piyush Gupta
And Mehul just — Mehul, sorry, just a point. I mean, this whole piece around financial engineering, stroke, the capital structure should have been known, etc., etc., I don’t think I buy into any of this thing. This is all happening to improve the intrinsic value of the underlying value of the shares. I mean, if you are managing to retire your debt in a timely manner, I don’t see what’s wrong in it. And there is no financial engineering here. You tell me a better way of retiring the debt, I’ll be happy. I mean this is all happening because the operating company is churning out decent free cash flows.
Mehul Pathak
In future, how do you plan to transfer profits made by the HTDS to Digicontent — is it always going to be — is it always going to just buyback?
Piyush Gupta
No, no, no. Mehul, the debt is finite. Operating performance is good. Once the debt is retired, everything belongs to the shareholders, right? I mean, whether it will be a dividend, whether it will be something else, I can’t say right now. But at the end of the day, whatever cash is being created belongs to the shareholder.
Now whether a dividend will be announced or it will be reinvested back into the business, I can’t say now. But you know as well as I do that this is only improving the return ratios of the company. I mean, you know this whole piece around financial engineering. I don’t know what is financial engineering here.
Mehul Pathak
And even if you buy back another 50%, Digicontent will remain the 100% owner of HTDS. That is my point.
Anna Abraham
We are not trying to change the ownership, Mehul. We explained why we are doing it. I think we’ve made our point. We will move on from this, please, as I said.
Mehul Pathak
Okay. The second thing is I am — in the past also I raised this point, feedback to the Digicontent Board, the Board meeting — quarterly Board meeting gets over in 25 minutes. I don’t know how you can do a business review of a company in 25 minutes when you are not shared even INR1 with the shareholders in the last three years. So — but you explained that it is enough. But I’m just saying that these are observations.
Piyush Gupta
Well, Mehul, I’d rather not comment on this whole thing, but I can tell you the meetings — the shareholder meeting, the Board of Directors meeting, there’s a proper review which is done on the business performance. All the feedback is taken on Board. Now whether 25 minutes is good enough or not, I really don’t want to comment on that, but that’s a full-fledged review is always undertaken.
Mehul Pathak
No, it’s okay. Piyush, my point is, can you please convey my feedback to the Board? That is all I am saying.
Anna Abraham
Yeah. Mehul, we also have the shareholders’ meeting of the DCL. You are welcome to join there and share the feedback directly as well.
Mehul Pathak
Yeah, because I have not seen any other company, Piyush, if that is possible, many other companies should be able to do that. Only Digicontent is able to finish in 25 minutes and no other company in India. I have not seen.
Piyush Gupta
Fair enough. Fair enough, [Indecipherable].
Mehul Pathak
Third point, on the Hindustan Media, I have seen there are two new investments, in the notes of accounts and even in the covering note of the quarterly result. Can you please share what these investments are? And what is the strategic objective of these investments in the HMVL quarterly report?
Piyush Gupta
Mehul, let me get back to you. I don’t know what investments we — OTTplay the single biggest investment where we are investing and I think we —
Mehul Pathak
No. No, HMVL, there are two investments. If you can — if you don’t mind, I’ll just take a second and read it for you. There is one of INR8 crores and one of INR56 crores in this year — in this quarterly report.
Piyush Gupta
Okay, Mehul. So let us study. We’ll come back to you. Let me just get my hands on it.
Mehul Pathak
There is — see, first is in Samast Technologies — Samast Technologies Private Limited and Appreciate Platform Private Limited.
Piyush Gupta
Mehul, these are AFE investments, which we undertake and you know the AFE model. These are AFE investments. If you do a Google search, you’ll understand these are AFE investments.
Mehul Pathak
What is AFE?
Piyush Gupta
The ads for equity, which is a cash-neutral platform where we invest ads against equities. I think you’re aware of that.
Aaditya Mulani
Dear, participant sorry to interrupt at the moment, but we will request you to fall back in queue, please, for any follow-ups.
Mehul Pathak
Okay.
Aaditya Mulani
[Operator Instructions] The next question is from the line of Rakesh Wadhwani. Please introduce yourself and ask your question.
Rakesh Wadhwani
Hi, team. Thank you very much for the opportunity. I’m Rakesh Wadhwani from Nine Rivers Capital. Sir, my question is with respect to the ad revenue. We have seen a very good improvement in the ads business, — Print — advertisement in the Print from the English and lesser growth or the degrowth in the — from the Hindi. Any reason for that?
Anna Abraham
Yeah. So there’s been — the commercial revenue even for Hindi has actually grown fairly well. The — however, overall revenue for Hindi is slightly depressed because of government revenue. So the share of government revenue in the previous year was substantially high, since it preceded a national election. And therefore there is — that government revenue has seen some softness in the Hindi and you will see that consistently in the industry and not just for us and that’s impacted the overall growth for Hindi. Commercial even for Hindi continues to be healthy.
Rakesh Wadhwani
No, because other players in the industry, their revenue degrowth is far like a big — more than us. Ours is 2%. For other players, it is more than 5%. That is a very good thing. But any reason why — I’m talking year-on-year, I’m not talking quarter-on-quarter.
Anna Abraham
Yeah, yeah. From Y-o-Y itself. So quarter-on-quarter actually, government revenue has substantially improved because quarter one had the code of conduct because of which there was a depression in the volumes from the government advertising. And therefore, on a quarter-on-quarter, the government volumes have improved. I am talking Y-o-Y itself and both the industry and us are seeing a decline on the account of the fact that base had a significantly higher government revenue as it preceded a national election. And that revenue is slightly subdued now. Commercial revenue has grown.
Rakesh Wadhwani
Understood. One more question from my side. With respect to the future upcoming, how you are seeing ad rates as well as the Print segment — also advertising device segment growing for both Hindi as well as English?
Anna Abraham
So as we have spoken in the past, we’ve been on a journey to improve our pricing in the Print advertising and we have seen success in the last two quarters. So the pricing has improved for us consistently. And therefore, that should hold us in good stead. Festive has been a fairly decent start and we just hope to keep the momentum up for the rest of the quarter and it will depend on that.
There are certain economic fact indicators, which are showing — which is showing a slight plateauing in the overall economic environment and the consumption patterns which could see some pluses, minus here and there. However, on pricing etc., we’ve been able to achieve what we’ve set out to do to some extent.
Rakesh Wadhwani
And with respect to the demand for the advertising across Hindi as well as English belt, we are getting the same demand or English belt is getting more demand and more ad rates and Hindi belt is getting lesser demand and lesser rates? Across both are same or –?
Anna Abraham
Yeah, we are seeing similar uptick in commercial revenue. Of course, category by category and depending on the relative importance in their various markets, there could be some changes.
Rakesh Wadhwani
Okay. With respect to the circulation, we have —
Aaditya Mulani
Participant, sorry to interrupt you. May we request you —
Rakesh Wadhwani
Sure, sure. Fine. Thank you.
Aaditya Mulani
The next question is from the line of Deepak Sharma. Please unmute yourself and ask your question.
Deepak Sharma
Yeah. Hi again. Sorry. So earlier this year we invested into EazyDiner. Is that the same methodology of what Mehul was asking? And could you just explain more on that?
Piyush Gupta
Yeah. Okay. Yeah, that’s the same methodology, what Mehul was asking. And I think in the previous investors interactions, we’ve covered that. This part of our business is the ads for equity business, whereby we take investment positions in multiple companies. And we don’t invest cash. It’s basically the advertising commitment that we give from our side. These are long-term contracts.
Of course, there is a classical investment process of valuations and various other terms etc., etc., which are agreed basis which all these investments are made. The Samast Technology, which Mehul was saying, and the EazyDiner which you are referring are both part of the AFE portfolio. And I think I’ve comprehensively discussed this in the earlier calls. This is a pretty substantial part of our business and a pretty profitable part of the business as well.
Deepak Sharma
Okay. So there is no risk to the — so it’s not a typical investment which we’re doing. It’s just only the barter part of it. What I’m able to understand.
Piyush Gupta
Yeah. Think of it like this. Yeah, exactly. Risk in a sense, I mean, of course, it’s a minimalistic risk, but — it is barter in the manner of speaking.
Anna Abraham
There’s no cash at risk.
Deepak Sharma
Okay. Okay. So if the guy can refuse to not advertise into our system, that’s all?
Piyush Gupta
Yeah, that’s all.
Aaditya Mulani
Thank you. The next question is from the line of Rakesh Wadhwani. Please unmute yourself and ask your question.
Rakesh Wadhwani
Hi. Hi, team. Thank you for the follow-up opportunity. I have a second question with respect to the circulation revenue. We have seen circulation revenue coming drastically across Hindi as well as English format and an English format is lesser — like the negative growth is lesser. But in Hindi, the degrowth is very high at 12%. Any reason for that?
Anna Abraham
So English, we have actually grown circulation revenue on a sequential basis and it’s kind of flat on this thing. Hindi has seen some decline in copies, but it is across the industry, commodity had been heightened over the last one year. It has come down to slight reasonable levels at this point. So the entire industry did see some correction in the copies. So no impact on share as such, but correction in the —
Piyush Gupta
Yeah. But — and also just to add to what Anna is saying and whilst we are speaking, I mean, this whole rationalization of unproductive copies, etc., which happened, brought it down. Our realization for copies are absolutely intact. And market by market, wherever there’s opportunity to take a print order, we are on that journey any which ways.
Rakesh Wadhwani
Okay. Because if I can correlate the lesser the circulation revenue or the lesser the circulation, it impacts the ad yields also. So it should not happen —
Piyush Gupta
And that’s the reason I said the unproductive copies. So of course, it does. So there is — by market, by addition and looking at the competitive position, you keep on optimizing the copies. There are some markets where you will bring down the copies because they are unproductive and they are not doing anything to your pricing, therefore the ad revenue and circulation revenue. But there are markets you’ll be increasing your copies because there’s a bigger opportunity to take a bigger market share of ad revenue and therefore get the circulation revenue going as well.
Rakesh Wadhwani
For the full year, what will be the circulation revenue growth or it will be degrowth for full year? Any guidance on that?
Piyush Gupta
Well, there’s no guidance on that, but I can tell you that the philosophy is to serve the market to the market’s capacity. And obviously, as you rightly pointed out, revenue is the clear yardstick. So as long as you can grow readership to a level which will drive revenue, we will do that. But just putting in copies where it doesn’t have a commensurate impact on the revenue is not something that we’d like to do very often.
Rakesh Wadhwani
Okay. One last question with respect to the Digital. I’m a little new to this company. So forgive me if my question is very simple. So in Digital business, what we are doing, we have an app — and we — how is the revenue model? Or how does the business work? And can you explain me in that small?
Anna Abraham
So it varies a little bit depending on whether you’re looking at HT Media consolidated digital segment or Hindustan Media Ventures Limited digital segment. So in Hindustan Media Ventures Limited, the Digital segment only pertains to the business that we have incubated from last year, which is called OTTplay, which is an aggregator model in the OTT space. So we are an aggregator of various OTTs.
However, we offer the content through a unified single login platform and not just a bundling process. So that’s OTTplay. And the revenue there is from subscription of the various packages that we have, which we are offering to the customers. When it comes to HT Media consolidated results, the Digital segment additionally has some other businesses like Shine, which is our jobs portal — and jobs and learning portal. It also has the Mosaic business, which has properties such as VCCircle and TechCircle, which is in the venture space and the tech SaaS space.
And a small business called Digital Entertainment, which is into digital streaming on a YouTube channel. So those are the four businesses which come in when we talk about HT Media —
Rakesh Wadhwani
Okay. That was very helpful. Thank you very much and Diwali wishes in advance. Thank you.
Anna Abraham
Thank you.
Aaditya Mulani
Thank you, all. With this, we come to the end of the Q&A session. If you have any further queries, please reach out to the Investor Relations team. Our contact details are given in the presentation and are also mentioned on our websites.
I now hand over to Piyush for closing remarks.
Piyush Gupta
Thank you, ladies and gentlemen, for making the time to join the quarterly earnings call for Q2 ’25. I wish you and your family members seasons greetings and a very happy and prosperous Diwali. And we look forward to seeing you in the third quarter’s earning call.
In the meantime, if there are any questions or clarification that you require, please feel free to get in touch with our Investor Relations cell, and we’ll be more than happy to furnish the information. Thank you so much, and all the very best.