HT Media Ltd (NSE: HTMEDIA) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Aaditya Mulani — Investor Relations
Anna Abraham — Chief Financial Officer
Piyush Gupta — Group Chief Financial Officer
Analysts:
Unidentified Participant
Lalit Kumar — Analyst
Namit Arora — Analyst
Narendra Khuthia — Analyst
Presentation:
Aaditya Mulani — Investor Relations
Good afternoon, ladies and gentlemen. This is Aditya Mulani from the HT Media Group. I would like to welcome you all to our quarter three financial year ’24-’25 earnings webinar. As a reminder, all the participants will be in listen-only mode. After we are through with the presentation, there will be an opportunity for you to ask questions.
I now hand over to Ms Anna Abraham, CFO, India Ventures Limited and Head, Investor Relations at HT Media Group.
Anna Abraham — Chief Financial Officer
Thank you, and over to you, Anand. Thank you, Aditya. Good afternoon, everyone. Welcome to our earnings webinar, where we will be discussing the results for the 3rd-quarter of the financial year 2024-’25 of HT Media Group.
On the call today, we have Mr Gupta, Group CFO; Mr, Head Financial Controllership and Taxation and members of our Investor Relations team. I trust that you have the opportunity to review the results of Industan Media Ventures Limited. It was announced yesterday and of HT Media Limited released earlier today.
Please note that our remarks during this webinar will align with the presentation slides. These slides, along with the financial statements are available on the stock exchanges and can also be accessed on the Investor Relations sections of our website moving forward, please have a look at the cautionary statement which is now on the slide. In-line with our standard practice, we would not be providing specific guidance on revenue or earnings.
The next slide gives a quote from our Chairperson on the company’s performance of the quarter and I quote, the 3rd-quarter of the fiscal year bode well for the overall performance of your company. Revenue grew in the annual festive season with a corresponding improvement in both business and operational metrics. On a consolidated basis, we reported growth in revenue and an improvement in operational profitability compared to last year as well as sequentially. Print advertising revenues have on the back of price and mix seen improved revenue growth. This, coupled with sustained control on operational expenses have led to margin improvement on a Y-o-Y as well as Q-o-Q basis.
The quarter also saw our radio business post strong revenue growth because of non-FCT business. All the margins continue to remain under endurance. In the digital business, the company continues to post revenue growth and operational improvement. Sustaining this positive momentum across our key business areas and ensuring smooth leadership transition will be our primary focus in the medium-term, while we remain steadfast in our commitment to deliver incredible and trustworthy news and engaging entertainment content through our legacy platforms as well as new-age product offerings.
We now have the agenda for the day. We will update you on the consolidated performance as well as provide an overview of the Print Radio and digital business segments. Following the presentation, we will open the floor for Q&A.
With that, I now hand it over to Mr Dir.
Piyush Gupta — Group Chief Financial Officer
Thank you. Good afternoon, everyone, and welcome to our 3rd-quarter FY ’25 earnings call. We will be tracking your screen. So as you can see on the webinar, the first chart is on the consolidated financial summary. As I just articulated, there is upward momentum in total revenue on an annual as well as a sequential basis. On a Y-o-Y basis, the revenue is up 9% and on a sequential basis, it’s up 11%.
If you look at our EBITDA, which came in at a positive INR46 crores, that’s a 64% improvement on a Y-o-Y basis and a 42% improvement on a sequential basis. Our PAT came in at a negative INR3 crores, which is a substantial improvement and on a sequential basis, a 50% improvement. Our cash position remains extremely strong with December cash balance standing at about INR910 crores, which is the same as it was last quarter.
Deep diving into the business unit performance, let’s have a look at the print performance advertising growth in print segment revenue reflected improved momentum. Financials I’ve already tracked. If you can see the print also grew by 9% on a Y-o-Y basis. Circulation revenue now that we are increasing a certain level of copies, so there are certain amount of print promotion, which is going there, but our copies continue to be on an increasing path, came in at about INR52 crores, the total operating revenue at a 7% growth at INR387 crores.
Operating EBITDA came at INR42 crores and operating margins improved by 400 basis-point. Same situation is on a sequential basis where you can see the growth on-top line at 22% and operating EBITDA growing handsomely to INR19 crores. If we look at the ad revenue growth in print business, English and Hindi. If you track the top-left portion, the English growth is 14% at INR181 crores and Q-on-Q, it’s INR181 crores. Circulation revenue, if you look at it is a decline of 22% at INR13 crores. And on a sequential basis, it’s down 18% for the reason that I articulated earlier.
Looking at Hinti, the ad revenues are up 3% and on a sequential basis up 17% and circulation revenue is on minus 6% on a Y-o-Y basis and a flat on a sequential basis. If you look at the radio performance, there is a very handsome growth of 29% on the top-line with a breakeven performance on the bottom-line and if you look at a sequential basis, the growth is 46% and 88% respectively.
Looking at the digital business, which is a part of HT Media consolidated results, our top-line grew by 32% to INR51 crores and the loss position improved marginally by 24% to 126. Similarly, on a sequential basis, it was down — down 7% on-top line and negative 14% on the bottom-line.
Questions and Answers:
Aaditya Mulani
Yeah. Thank you, Piyush. We will now begin the Q&A session. You can click on the raise hand option, which will enable the moderator to unmute you for posing your query. Please introduce yourself before posing your query and kindly restrict to a maximum of two questions per participant so that we may be able to address questions from all participants. We will now wait for a few moments while the question queue assembles the first question is from the line of Mr Mohit Kumara. Please introduce yourself and ask your question.
Unidentified Participant
Can you hear me, please?
Piyush Gupta
Yes, we can hear you. Good afternoon. Please go-ahead.
Unidentified Participant
So my questions are very specific to HMBL firstly and very specific to the balance sheet. My first question at least. In your current liabilities, you have sundry debt — deposits of INR500 crores. Okay, what are these — why do we need deposits? Are we a deposit-taking? What is happening? I don’t understand.
Piyush Gupta
Also, let me give you a specific answer, you will understand thereafter. I’m presuming that if you’re using the balance sheet, you’re using the 31st March or the September balance sheet, the second-quarter balance sheet, right?
Unidentified Participant
Of course.
Piyush Gupta
Yes. So INR588 crores, the deposit that you take is consequent to our AFE business. So if you understand the AFE business, we take deposits from our prospective advertisers in which we take our investment position. So it’s a reciprocal second leg of the entry on the AFE deal that they have done. We are not a deposit-seeking company under RBI and we don’t see cash deposits. These are all AFE deals with the add for equity deals, thereby the counterparty gives us deposits. And accordingly, we subscribe with a similar amount to their equity or whatever financial security that we are taking.
Unidentified Participant
Fair enough. I understand. Thank you so much. But on the same vein, I wanted to ask you, you announced yesterday also a bunch of acquisitions, so to say. Are these also all AFE, all of them.
Piyush Gupta
All AFE and they are not acquisitions. These are minority investment positions, they are all AFE and they will also give rise to a security deposit like the one that you’re seeing in the September balance sheet.
Unidentified Participant
And your add for property within the AFE, am I correct in assuming that this is, let’s say, give-and-take INR200 crore piece?
Piyush Gupta
Well, we don’t give the specifics, but you will be in the ballpark because there are two asset classes that we deal in, which are financial securities, which would be equity or the — any other — any other securities and the second asset class is equity. I won’t have the exact split right now, but we don’t even give that on the ballpark.
Unidentified Participant
I’m talking about property and for property.
Piyush Gupta
So if you want to take it? When I say AFE, it’s a generic word for both asset classes, equity and property. In the balance sheet, when you look at that security deposit number, that culminates both properties and equities.
Unidentified Participant
No problem. I’m talking about the asset side, not the liability side. So you have listed properties under two heads. One is investment property and one is held-for-sale. So both of these are your AFE properties, right?
Piyush Gupta
Yes.
Unidentified Participant
Yes. And these are approximately INR200, only the property part of it.
Piyush Gupta
Fair enough. Yes.
Unidentified Participant
And you intend to sell all of these. There is no intention of —
Piyush Gupta
That’s what the businesses. That’s what the business is. These are not used for captive consumption and we are not keeping this for a long-term. So as you understand the AFE business, the generic characteristics of the business is that most of these assets are for shared.
Unidentified Participant
So that is my balance sheet part. Can I ask you another question or should I get move the line?
Piyush Gupta
I think please get-in the queue if you don’t mind.
Unidentified Participant
No problem at all. Thank you.
Aaditya Mulani
The next question is from the line of Lalit Kumar. Please introduce yourself and ask your question.
Lalit Kumar
Hi, am I audible?
Piyush Gupta
Yes. Hi, Lalit, please go-ahead.
Lalit Kumar
Hi, sir. This is Lalit Kumar from Best Media Info. I just wanted to ask that as per the recent report, the print industry has been shown on a decline and it is expected to go from 17% to 15% by the year 2025. I just wanted to know is your strategy aligned with the ongoing trends and how is it that you are taking this?
Piyush Gupta
This is a great question and this is one of the things that we keep on debating internally. So yes, we are aligned with the report. I mean those declines, will we track them to the T? Will we be better or will be worse only time will tell. So multiple things which are happening here. One, to extend the life of print, we have an AFE business, as you understand, which I was just answering to the previous — previous caller. Besides that, you know, we are diversifying our business in quite substantial way. And this journey is not a new journey. It’s been there for a while. The latest entrant to this journey is the OTT play platform on which we are currently investing.
But from a — from, let’s say, if I were to just broadly give you a perspective from about eight, 10 years ago, we have print revenues in the total revenue stream to constitute about 85% of the revenues. Today, they are less than 70%. But of course, print is still a substantial part of the overall consolidated revenue, but our diversification journey into digital, into radio, into other digital properties like OTT and Shine and Mosaic Ventures, etc., et-cetera, is something that is slowing — that is showing some traction. And obviously, we are investing with a very clear hope that we’ll be able to diversify our revenue streams. Print has been under pressure for the longest time. It will continue to be do to be so. But at this point in time, it’s still the main — the core of the business at this point in time.
Lalit Kumar
Thank you, sir.
Aaditya Mulani
Thank you. The next question is from the line of Namit Arora. Please introduce yourself and ask your question.
Namit Arora
Thank you for the opportunity. Good afternoon. This is Namit Arora from InGrowth Capital. So I have — I have two questions. One is that you have a very strong balance sheet and significant access to cash. So given that, is there a thought process around taking more risk in terms of creating growth avenues? I know you were alluding to some of them, but given the very comfortable financial position. Are there adjacencies that you are looking at in the broad media space that you could sort of be slightly taking slightly more risk to deploy this cash to create growth avenues for the future?
Piyush Gupta
Look, Namit, again, Namit, right? Yes. So Namit, again another great question. But as I said, look, I think everything has to be collaborated not just from an affordability point-of-view, which is the cash on the balance sheet, but also where you’re right to succeed and where the right adjacencies lie. Now being a legacy media company, which has a very strong brand presence, obviously, we are extending ourselves into the digital news genre. And with news, we’re also going into various other languages, which either to we were not there on the digital platforms. We are extending ourselves into other adjacencies like OTT play into Shine, which is a classified engine into Mosaic, which is basically catering to a VC and a PE kind of a stage. So those are the things that we are doing now beyond a certain point in time, I don’t think we would like to just deploy investment for the heck of it because there is something called a right to win and something called the absorption capacity.
So at this point in time, I think we would like to focus on the things that we are doing and we’d like to rather go deep than go wide on this. Our investments in OTT play and in our digital businesses. And digital business is not part here. I’m talking about the sister concern, which is DCL are reasonably substantial and we will keep on doing that because really those are the — those are the avenues where we have a great right to succeed. We have a lot of skill because we’ve been doing that and our investments are currently tracking down.
Namit Arora
Got it. This is very helpful. Thank you for your detailed and candid thoughts. I have one more question with your permission. Can I go-ahead?
Piyush Gupta
Please go-ahead.
Namit Arora
Okay. Sir, you have two listed companies. Now I understand that one is a holding company with a 74% stake, but administratively and otherwise is probably a little cumbersome. Any thoughts on rationalizing that or you think given the difficulties in the Indian environment, you are likely to continue with both the listed companies?
Piyush Gupta
No, we — look, I mean, the simple answer is we’d like to simplify things as much as possible. But given the Indian environment, as you rightly alluded towards, these are a bit of challenges. But you know, if we get — if we get — let’s say, if we manage to bring all our and shareholders together, we would definitely like to follow that stream. But at this point in time, we are continuing the way it is.
Namit Arora
Got it. Thank you for your detailed thoughts and all the best to the entire team.
Piyush Gupta
Thank you, sir. Appreciate it.
Namit Arora
Thank you.
Operator
Thank you. The next question is from the line of Hari S. please introduce yourself and ask your question Mr Harry you will have to unmute yourself. We’ll move on to the next participant for now the next question is from the line of Narendra Utia. Please unmute yourself and ask your question.
Narendra Khuthia
Hi, am I audible?
Piyush Gupta
Yes, please go-ahead.
Narendra Khuthia
Hi, thanks for the opportunity. This is Narendra from Robo Capital. So, sir, my only question is regarding the radio business, right? So could you throw some light on whether radio yields are as compared to pre-COVID levels and what needs to be done to take these yields back to those levels?
Piyush Gupta
No, that’s also a great question, Arendhra. The simple answer is no, they are still struggling versus the pre-COVID level. So there are multiple things that we are trying in the marketplace. Of course, you know, taking yield at this point in time where the digital music or the digital audio is gaining so much traction is not a easy journey, but we are on it for the longest time and there is some improvement in this — in this quarter’s result on a Y-o-Y basis, but of course, that doesn’t take us to a pre-COVID level at this point in time.
However, from an overall audio business perspective, there are lot of new initiatives that we are throwing into the mix. If you see the growth — the handsome growth that you see this quarter is primarily driven by not just by on-air properties, but by off-air properties as well, including events and various other adjacencies, which sit very well with the radio business. So yield is definitely top of the agenda, but it’s a — it’s a marathon. I mean, it’s not a sprint. So we are at it. And hopefully sooner rather later, we’ll be able to bring it up to a pre-COVID level, which has been the stated intent and we are at it, but we’re still far away from the pre-COVID levels.
Narendra Khuthia
Could you share some steps that we are taking towards this, if possible?
Piyush Gupta
Sorry, come again, what’s your question?
Narendra Khuthia
Yeah. So I was asking, could you share what all initiatives are we taking to — for to do this, right?
Piyush Gupta
So multiple, look, I think you know on the digital platform, we are taking our audios — audio properties digitally because a lot of customers are shifting digitally. So that’s where we are now also trying to capture our customers and our listeners so that the revenue basically can come from a different stream. We are doing a lot of events, musical events in various cities where we’ve got a radio property present, which is an auto extension of a terrestrial radio property. So that’s the other thing that we are on to apart from obviously the yield management and the inventory management that we are at any point in time.
Now also the point to be understood is radio is a very heavily regulated business and there is a lot of royalty and license commitments and fees that you have to pay to the government. So there are various proposals that at the industry level are pending with the government to take some ease off the sector. Some part of that the government has already relented and the balance we are hoping at some point in time will be given. So with those things coming into being, the economics will change very substantially — substantially for the better of course, but that’s only something that time will tell.
Narendra Khuthia
Okay, sir. All right. Thank you so much and all the best, yeah.
Piyush Gupta
Thank you.
Aaditya Mulani
Thank you. The next question is from the line of Yash R. Please introduce yourself and ask your question.
Unidentified Participant
Am I audible?
Aaditya Mulani
Yes. Hi, Yash. Please go-ahead.
Unidentified Participant
Yeah, hi. First of all, congratulations for a good set of numbers as far as a revenue numbers are concerned for English. I would like to know as to what — I mean, we’ve done well. So would like to know the reason behind it. What are the verticals that have contributed and whether we have this revenue on account of a greater volume or is it because of pricing that has improved drastically?
Piyush Gupta
Okay. So let me request my colleague to take this question? Yeah.
Anna Abraham
In — we had — the volumes in the advertising market this quarter was not very robust. So it’s — it is a — it is pricing and mix that has helped in the revenue growth as was articulated towards the first part of the conversation. We’ve also — this is a festive quarter so that comes handy. We also had a whole lot of initiatives and events during this quarter as well, which also helped us garner our additional revenue.
Unidentified Participant
Okay. Sorry for cutting — sorry for cutting in my — I didn’t make myself clear. My question was with regards to previous year. So I can see a decent amount of growth, 23% over previous year as well. I understand that quarter-on-quarter would not be comparable because we have festive during this quarter, but what about the comparison versus previous year?
Anna Abraham
I was actually giving you the comparison versus previous OMI, market volumes have not grown versus previous year. However, we have been able to grow pricing. It is a combination of the absolute price increase as well as the categories because there is a difference in pricing between categories also. So there is a mix impact, there is a pure pricing impact. And as I mentioned, we’ve been able to garner more revenue from special initiatives and events this quarter vis-a-vis quarter of last year.
Piyush Gupta
And if I may just add to what my colleague just said, look, as I was explaining to one of — one of the other participants on this call earlier, you know, so the industry reports are also not predicting a exponential growth in the print revenues, which is how it’s playing out in terms of volumes. So really the next lever that we have is on the pricing, which Anna is alluding towards. So we’ve been on to pricing, but given the festive buoyancy, et-cetera, et-cetera, that was a good opportunity and we managed to capitalize very well on that. So that’s definitely given a flip to the P&L. And the other initiatives which Anna was articulating are these various events and off-air or off-property events that we have done, which help us garner handsome revenues.
Unidentified Participant
What events would these be, if you can just give an example?
Anna Abraham
So we have multiple events or that happens both in English markets and in Hindi market. So a leadership summit is a big event that we had. We also have other initiatives like you know, in the HDR mine, etc., which happened this quarter.
Unidentified Participant
Okay. And which are the verticals that contributed to the growth?
Anna Abraham
Yeah. We do give segment financials, so you can see that radio has both grown.
Unidentified Participant
Okay. I know I’m talking about the print vertical per se, print business per se, English part, because I can see a comment that says a key commercial categories except FMCG, BFS and industrial, but there has been no word on the sectors that have done well or the categories that have done well.
Anna Abraham
Most of the other side sectors. So auto has done well, real-estate has done well. Retail has done well. So we’ve only quarter the ones which have not done well.
Unidentified Participant
Okay. That’s great. That’s great. Whatever the circulation revenue, I think I missed that point. Why is there a degrowth not just versus previous year, but previous quarter as well? Is this because of the drop-in copies?
Piyush Gupta
Well, not exactly. As I was explaining to the — to your colleague earlier, we are on a journey to increase our copies in the marketplace. And for that, we are giving a certain amount of discount as a you know initial — initial discount for the copy. So that’s bringing down the circulation revenue. So the realization for copy to that extent is coming down slightly, but we are increasing the number of copies with the hope that our circulation can increase.
Unidentified Participant
And so I mean what about the copies, are they flat versus previous quarter or where-is it?
Piyush Gupta
No. So basically previous quarter they are going up, but on the revenue, you will find that the revenue is going down because there is a cost associated to that which is coming, which is only the initial cost. Once the copies have become structural, the cost goes away and the copies stay.
Unidentified Participant
Okay. So this is — the cost is just a discount is what you’re talking about, right?
Piyush Gupta
Yes.
Unidentified Participant
Okay. Okay. All right. That’s about it from my end. Thank you.
Aaditya Mulani
Thank you. The next question is from the line of Mehul Parik. Please introduce yourself and ask your question.
Unidentified Participant
Good afternoon, Piyush and Anna. Yeah. Okay. So I have one of my question is the tie-up that we have with BSNL, where we are offering OTT play on BSNL network. So I — they are offering it free-to their subscribers. So are we getting paid-for something or is it — and is it up for the subscriber or is it a lump-sum amount?
Piyush Gupta
So, first of all, that tie-up you know, is having a sputtering start. I mean, BSL being a government organization is into various discussions with us the full-fledged tie-up has still not come into the beam. But whatever services that we are providing to them, we are getting paid. So BSNL might be providing it to their customer-base, et-cetera, for a discounted price. But whatever services we are providing at this point in time, we are obviously getting paid-for it. But as I said, that tie-up has to come into full blue, it’s still not there.
Unidentified Participant
Okay. Are we expecting it to happen?
Piyush Gupta
Well, you know, it’s a multiple discussion process, discussion with BSL, BSL is discussing with a lot of service providers, so we will have to wait-and-watch.
Unidentified Participant
Okay. And the expenses on OTT play that we are doing every year, are we expecting it to go down in future or will continue at these levels?
Piyush Gupta
Go down for sure. Okay.
Unidentified Participant
Okay. Thank you.
Aaditya Mulani
Thank you. The next question is from the line of Asim. Please introduce yourself and ask your question.
Unidentified Participant
Good afternoon. Am I audible?
Aaditya Mulani
Yes, please. Please go-ahead.
Unidentified Participant
Yeah, hi. So I would just like to ask one question related to the events. You alluded to the fact that you’ve got a significant revenue coming from there. But if you can just detail which segment would this additional revenue be under, like would it be under the print or radio? And how much would that be? If you could just quantify it?
Piyush Gupta
Well, it will be under both the segments, but I’ll ask Anna to give you the details.
Anna Abraham
Yeah. So we have it under front and we have it under radio. We will not be able to quantify it for you. But across categories, we have had advertisers participate in the initiatives. In print, we had it in Hindi locations and in HD locations. It is nothing. Every quarter we do have similar initiatives. It’s not that this has been specific to this quarter. Just that it’s two scaled events happened this quarter and it happened together. Otherwise every quarter we do have some level of events happening?
Unidentified Participant
Okay, all right. And if I can just understand from the events side, would you say from your margin standpoint, is this more or less accrete — accretive than the normal maybe print ad volumes or radio ad volumes.
Piyush Gupta
Well, one thing that you need to understand is that you know, well, they are all different. So first of all, there are some events which are continuing for a very long-time like the leadership summit. Now these things will already have an IP created to that, so they will have a better margin. There are some that we are doing very technically, they might or might not have a margin and some we do, you know to garner a certain amount of revenue to make a segue into a certain segment, which might be at a marginally negative margin also.
So basically, if you want to paint a general picture, I would say the on-property revenue will be generally always more profitable because it’s automatically got a brand associated with it. But if the event has become branded over a period of time, obviously, it can come to those levels or exceed, but the ones that are done tactically for a specified reason might or might not have those kind of margin profiles.
Unidentified Participant
All right. Understood. Thank you very much.
Aaditya Mulani
Thank you. The next question is from the line of Mehul Pathak. Please unmute — introduce yourself and ask your question.
Unidentified Participant
Hello, Anna, can you hear me?
Aaditya Mulani
Yeah. Please go-ahead.
Unidentified Participant
Yeah. Congratulations on good set of numbers. On the top-line.
Anna Abraham
Well, I’m happy, that you are happy.
Unidentified Participant
No, I’m not. Entirely happy. Please.
Anna Abraham
As long as you smile, I’m happy.
Unidentified Participant
No, the ad revenue going up is definitely a pleasant sign and…
Piyush Gupta
With your good wishes and your blessing, they be able to take it even farther up. Let’s see. But there’s not a forward-looking statement. This is just to you.
Unidentified Participant
Okay. Two questions. The first is that other expenses on a half yearly basis are up INR80 crores. So usually seen that whenever top-line goes up, the bottom-line, you know also significantly goes up and therefore, accretion to the bottom-line is just not happening here. So some color on…
Piyush Gupta
Yeah, we are also okay.
Unidentified Participant
And I to say let me complete my — let me complete my question. No. So some color on the bottom-line, you know on the expenses first with some breakup if you can share as to how much of that is strategic and how much is you know to generate revenue. So for example, if it is strategic, the other expense, then I would say that, okay, in future, it might give. So at least some, I would say, you know color on the management thought behind the increase in expenses and the other thing is when will — when can we hope that the top-line will grow faster than the expenses? So that is question number-one.
Piyush Gupta
Okay. Go for question yeah.
Anna Abraham
So maybe entire — the invest — other expenses cost that you’re seeing is largely on account of our investment in OTT play because except for salaries, all the other costs of OTT play tends to set-in this particular line and therefore an OTT is also a separate segment. So you can see what the costs are and therefore most of it. And that is really the reason for our increase in cost and some related invest on account of the events. Every other cost is completely under control and in-line vis-a-vis. So that’s the — that’s the answer to your first question.
Unidentified Participant
When will we start seeing the rate of — change of top-line has to be higher than the rate of change of expenses. So five, six years five, six years we are waiting. When will we see that happen?
Piyush Gupta
So, let me try to triangulate two or three conversations here. You know, one of — one of one of other investors on this call was basically talking about making investments in future looking businesses, which is currently the OTT play and the digital business, which is not sitting here, but that’s where it is going, right? The second thing is how do we — how do we bulletproof or hedge our print revenue streams, which are under perpetual pressure and the pressure has only gone from back towards post-COVID. Now the whole thing is there will be some tactical plays, there will be some strategic plays.
Now if you basically break-down the segment separately. If you look at the print revenue separately and divorce that from the investment P&L of OTT play, etc., etc., you’ll see that the operating leverage really what you’re talking about is indeed in this quarter on the print side flowing down to the bottom-line. So the revenues are growing much faster than the expenses. But what vitiates the picture is because OTT play expenses are sitting, which by the way, themselves on a Y-o-Y basis are 65% lower than the same quarter last year, but there are still substantial expenses happening there. And that is the business for future that we are in the in on the journey of creation at this point in time. Hence that is the picture. But print itself, the operating leverage is growing.
Now on the investment P&L, we are very prudently, you know, making those investments in a calibrated manner to see that the outcomes — outcomes really impact — now if these businesses do all scale-up in the next four, five years, then of course, you’ll have that operating leverage flowing from all the business and all the revenue streams.
Unidentified Participant
Yeah, we are saying using the word if so…
Piyush Gupta
What-if this is five years, I mean, I can’t give you a five-year statement. What I’m saying is we are investing for a business, we believe will create a long-term sustainable value-creation for all shareholders. Now we are on this journey and we’ve been transparently sharing with all our shareholders. Now whether that will go into a 30% EBITDA business or a lesser or a more number, only time will tell we found the space and we are very diligently investing in the space. Let’s see what eventually comes out when this business becomes mature.
Unidentified Participant
Thanks. Can I ask my second question or I go back into the queue.
Piyush Gupta
If you can go back-in the queue, may that be appreciated.
Unidentified Participant
Okay. Fine.
Aaditya Mulani
Thank you. Next question is from the line of Mohit Kumara. Please introduce yourself and ask your question.
Unidentified Participant
Can you hear me please?
Aaditya Mulani
Yeah.
Unidentified Participant
So this is specifically related to OTT play now. You don’t give very lot of forward-looking statements but it is like common knowledge that there are about a 125 million paying viewers in India for OTT and all YouTube and Netflix and what have you everything in the world that’s a roundabout figure can somebody looking at your company or investing in your company at least assume that you will take 1% of that market out of INR125 million, is that a fair assumption to make?
Piyush Gupta
Well, that is definitely a fair assumption. I think it will be more than that, but one thing, if you want to tour that equation into economics, you will have to basically from the total addressable market, you’ll have to go to the value proposition that is what is the subscriber paying you, then you’ll have to basically go into the cost of acquisition and then saying which are the — which are the mature subscribers who are now coming, let’s say, on an automatic like because you’re talking about YouTube and Netflix, most of these are on auto renewal property.
So we are basically we will definitely — we are definitely addressing more than 1%. But at this point in time, there is a certain AR2 and there is a certain acquisition cost that we are — we are getting out-of-pocket on. And those are the metrics which have to go up and the addressable market will definitely be more than 1% because if there are 125 million or INR12.5 crore people there with a bouquet of 30 plus OTDs that we are giving them for a fraction of the cost of the sum of parts, we will be able to address a much bigger market than 1%.
Unidentified Participant
I’m just trying to be pessimistic at the moment to be honest. So let’s say 1%?
Piyush Gupta
Yeah. No. So fair enough. So call that as your baseline, but I’m saying we will go beyond the baseline there.
Unidentified Participant
So you will be very disappointed if it’s 1%, let’s say, in two years, three years, you will be disappointed at least.
Piyush Gupta
Well, me personally, absolutely.
Unidentified Participant
Okay. So as of this movement, you are showing — all these are ballpark figures. So as of this moment your digital, if I annualize your nine months, it’s approximately INR50 crores your revenue. And if I just take an average of, let’s say, 200 ARPU, I went to your site and saw the different schemes. So you have approximately 2 lakh users right now. Am I correct in that or is that unfounded?
Piyush Gupta
You know, we — yeah, well, that’s not correct, but we will not like to share that on a public call, but that number is not correct.
Unidentified Participant
Okay. Okay. So I won’t try to take you to tell me something. But my first question was that it is reasonable to assume that you’ll — if this business is to be successful, you will have 1% of the market, let’s say 10 lakh users, let’s say INR200 RPU, let’s say, in a couple of years, you should at least be doing INR200 crore, INR150 crore of business per year from this stream. If you want to be…
Piyush Gupta
I absolutely agree with you for your broad calculation. I agree.
Unidentified Participant
Fair enough. And when will this expense of yours absolute — see any running any business use, which on a tube light in your office, expenses are always there. But when will the chunk of the expenses peter off in this because you initially told us in previous calls that you had been expensing everything, nothing is capitalized in this business, everything is expensed, right?
Piyush Gupta
Yes.
Unidentified Participant
And when do we expect this to Peter off the expenses?
Piyush Gupta
Well, if you just compare the segment on a Y-o-Y basis, the expenses this quarter versus the 3rd-quarter FY ’24 is down 65% if you see that, right?
Unidentified Participant
Yes.
Piyush Gupta
And if this journey continues, you can already extrapolate that how the numbers will go-forward. Now the only trick is expenses, again, you’ll have to break-down in two or three big buckets, right? Some will be direct expense, which is the CAT kind of expense, cost of acquisition of customers, then basically renewal has a certain kind of expense and then you have the SG&A kind of expenses, right?
So the moment the product itself establishes and embeds itself into that 1% or 2% or 10% or what have you, the CAT itself goes away and then obviously, the economics change very substantially. The only other second part outside of expense is the ARPU as you’re talking about 200. Now if it is 200, I mean it has a mix of people who are currently on a discounted scheme, people who are currently on a full-price scheme and everything in-between. So once that number settles at somewhere close to 200 as you’re saying, the economics become very, very different.
Unidentified Participant
Yeah. So, but I would also be a participant…
Aaditya Mulani
Sorry to interrupt. May we request you to fall-back in queue for follow-up questions, please?
Unidentified Participant
There is no follow-up question. I was just having a discussion with him on the same point.
Piyush Gupta
Okay. You can have one last point to make.
Unidentified Participant
Yeah. I would like to sort of register what you can only call as a complaint right now. There is Mr Avilash, who is the CEO of CEO of OTT play separately, right?
Piyush Gupta
Yes.
Unidentified Participant
So his interaction with the public and if you just make a simple Google search and he has interviews with other people if you go to the news part of the Google search, this is discussed, and I’ve said this once before also in some two, three con-calls ago. Whatever he says in public, your shareholders have a right to hear that directly from you or from him. And since this is becoming a very big part of your business, I am sure all your investors would deeply appreciate if Mr Avinaj was here to answer questions because if you just Google right now, there is an interview with somebody called Media Brief in which he is confirming that the thing that BSNL has done and he’s confirming that some big event on live sports is going to come, a big announcement is going to come.
Don’t you feel that your investors who come on this call deserve to hear it before anybody A and directly from him B, all this. We should hear this, right? You are very steadfast…
Anna Abraham
Heard your point. What you hear on this call is factual and which should be what is taken as the correct picture. There may — we are the representatives of the company to be able to disclose this information and to give you the factual position.
If yes, I get it, but there are sometimes expectations also which are conveyed and therefore, if at all you want facts, please take what we are seeing as facts. And in the meantime, we have registered your point and we will ensure that the street is not getting many different information but the factual information please refer to our call.
Unidentified Participant
Thank you for your time.
Aaditya Mulani
Thank you the next question is from the line of Hari S. Please introduce yourself and ask your question.
Unidentified Participant
Am I audible, sir?
Aaditya Mulani
Yes, please go-ahead.
Unidentified Participant
Okay. This from my individual investor. My question is regarding this cash holding has increased for this quarter. What is the reason? And the second one is regarding this holdings holding the cash for because it has become a huge investment like maybe should be reported as a separate end because are there any provisions being made on the investments or are there in the profit or not? Oh, that would be helpful. Thank you very much.
Anna Abraham
Yeah. So yeah, we heard you. I think there is a bit of a disturbance, but let me try and address what we thought we heard you. There has been cash generation on the back of better operating performance of the company, better working capital release and you were alluding to the investments that we do as part of AAP, I think. And there also as we articulated earlier, the journey is always to ensure exit and generate cash. On that also we’ve been successful.
So we all of those has to operate — all of those has contributed to the better cash that you’re seeing in the books and we reported that as well. And on whenever we publish our financials, any provisions, etc., are clearly separately called out. So you have information on those. Any mark-to-market movements are also any profits that we make are part of our other income. So I think all appropriate disclosures are in-place as and when we give the detailed financial statements and the balance sheet.
Unidentified Participant
Okay. Thank you very much.
Aaditya Mulani
Thank you. The next question is from the line of Yash R. please introduce yourself and ask your question. Dear participants, I would request for follow-ons, please limit yourself to one question only.
Unidentified Participant
Okay. Hi. So with regards to the staff cost, I can see there is a slight uptick in the cost versus previous quarter, so that would be around 4% to 5%. What’s the reason we are the same? I mean since the year…
Piyush Gupta
You mean the previous quarter means sequentially versus the second-quarter you mean, right?
Unidentified Participant
Correct, correct. So it was 120 if I am not mistaken, it is 140. So there’s a small uptick. It’s slightly lesser than 5%.
Piyush Gupta
Yeah. So we had — in-quarter two, I mean, there are some available components which get paid on a half yearly basis, which there was some reversal in-quarter two analyze us adjusted for the reversal, it’s cost.
Unidentified Participant
Okay. And just one more question. Can you give us the copies that are there per se for the quarter for English and language per se?
Piyush Gupta
That’s not an information that we are disclosing.
Unidentified Participant
Okay. Okay. Thank you.
Aaditya Mulani
Thank you. The next question is from the line of Mehul. Please introduce yourself and ask your question.
Unidentified Participant
Mehul Patha, Independent investor. Can you hear me, Pyush? Anna?
Aaditya Mulani
Yes. Please go-ahead.
Unidentified Participant
Yeah. Actually larger level question and that is, no last five years, INR700 crores of net-worth is gone. It is wiped out. Now last three years — last — I’m little disappointed with the Chairperson’s no statement for the quarter. There is nothing in it for the shareholder. Yes, certain business-related micro statements have been made. But you know, now it has last three years salaries have increased in the company. Salaries have gone up, let’s say, from INR329 crores in ’21 to INR413 crores now. So it’s almost a INR90 crore increase in the last three years. So internal stakeholders have been kept happy. The external stakeholders, even now there is nothing and I don’t think even this year, there is likely to be a dividend. When I look at the performance, it is not going to happen.
So I had this call with Anna and there was another gentlemen in your company where you know, I had requested that I would like to know does the company have an internal goal for all their senior executives or at least for the Board on return on capital. Now what is the purpose of this business? Why is it running? No, if the cost-of-capital in India is, let us say 12%, if you are below 12%, the business does not have the right to exist. Now what is the purpose of running a business that will never make 12%? And 12% if you see on return on capital may mean around INR200 crore of net profit from. So I don’t see that happening.
On the other hand, money is being retained within the business. And you all are investing in various businesses and return on capital is not visible to me as a shareholder. So did Anna have a chance to have a chance.
Anna Abraham
So let me try to address. So two-parts to this question level. So you know, I totally hear what you’re saying. On the point, I totally heard what you’re saying. If you want points, I think you should definitely bring them to the AGM. Happy to have a discussion on that. But coming — coming on to the net-worth is gone, therefore, the market capitalizations might be various places. And I don’t want to say this whole stuff, but you look at various other listed media companies and you can look at-the-market capitalization of them in 2018, 2018, ’19 before the pandemic and now there is a bit of a challenge and that’s the only reason that we are trying to because of a strong balance sheet, invest in a forward-looking businesses so that the and the ROEs and the return on invested capital, all those matrices can show-up.
Now obviously, we are trying our level best and these are all thought-out decisions which are happening with every stakeholder in the way we are transparently bringing it to all our investors every quarter. Now whether the switch will flip in 1/4 or one year, really tough to say, but with all earnest, the management is putting their best foot forward. The — you know, on the market capitalizations, etc., et-cetera, if you just look at the competitive set-in the listed space of print media companies and radio media companies, etc., et-cetera, you’ll see that we are much lesser impacted. But we are because we had a strong balance sheet, we have a wherewithal to kind of invest in future looking businesses so that we can create long-term — long-term value for all shareholders, majority and minority.
Regarding your other point on the employees, etc., et-cetera, I don’t think we are giving anything other than market — market increments here. We’ve gone through multiple rounds of rationalization in COVID before COVID and after COVID, but that’s where we are and I don’t think it’s fair to compare that we are not doing anything for the external shareholders. We are trying to very — you know, very, very diligently trying to build businesses for tomorrow. Now how they will pan-out, we will keep all the shareholders in the know, but it’s really — we won’t be able to predict what will come out five years or four years. We are trying our level respective.
Unidentified Participant
Yushy, I’m not grudging internal — no stakeholders — stakeholders getting signings, I welcome it. No. My point is, while you’re saying that compare the market cap of other print companies, other print companies have distributed INR2,000 crore INR2,000 crores each DB Corp and has shared, which even HMVL has not done. So we are way behind in terms of performance even on Hindi. So I have not heard anything back, but what is the glide path? And if you can discuss with Ms Bharthia and come back to our shareholders and say that, okay, after three years, we are looking at 15% return on capital. Now do you internally have a target? Is anybody thinking return on capital?
Piyush Gupta
No. That we are all the things they hold, but just for the positive time, we are definitely thinking about it, but I don’t think I have anything new to say. We are definitely thinking, hence, we are trying to invest not various other companies which are the competition set that you name are trying to create businesses of tomorrow. We are trying to do that. Now how that will come out, we will see, but that’s the journey and we’ve got this balance sheet and we are utilizing our balance sheet to create long-term value. Now let’s see whether we are successful or not.
Unidentified Participant
Thank you.
Aaditya Mulani
Thank you. 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 investor presentation and are also mentioned on our websites. I now hand over to Piyush for closing remarks.
Piyush Gupta
Thank you. Thank you, dear investors. Thank you for joining our earnings call. We hope to — hope to see you again in the next earning call, which is the full-year FY ’25 earnings call. Cesars, greetings and all the best to everyone of you.