Shemaroo Entertainment Ltd (NSE: SHEMAROO) Q3 2025 Earnings Call dated Jan. 17, 2025
Corporate Participants:
Amit Haria — Chief Financial Officer
Hiren Gada — Chief Executive Officer
Analysts:
Nupur Jainkunia — Analyst
Yash Kukreja — Analyst
Ayush Jalan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q3 FY ’25 Conference Call of Shemaru Entertainment Limited hosted by Valurim Advisors. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Nupur Jainkunia from Valorem Advisors. Thank you, and over to you, ma’am.
Nupur Jainkunia — Analyst
Good afternoon, everyone, and a warm welcome to you all. My name is Nupur Jainkunia from Valorem Advisors. We represent the Investor Relations of Entertainment Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the 3rd-quarter and nine months ended of the financial year 2025.
Before we begin, a quick cautionary statement. Some of the statements made in today’s con-call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings conference call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Now I would like to introduce you to the management participating with us in today’s earnings call and hand it over to them for their opening remarks.
We have with us Mr. Hiren Gada, CEO; Mr. Arghya Chakravarty, COO; and Mr. Amit Haria, CFO of the company. Without any further delay, I request Mr Amit Thaya to start with his opening remarks on the financial highlights. Thank you, and over to you, sir.
Amit Haria — Chief Financial Officer
Thank you, Nupur and good afternoon, everyone. Welcome to our earnings call for 3rd-quarter and nine months ended financial year 2025. Let me first start by giving you some of the key financial highlights, after which our CEO, Mr Gara, will give you some of the operational highlights. For Q3 FY ’25, the revenue from operations stood at INR164 crores, which was — which was a growth of 5.4% on Y-o-Y basis. EBITDA loss for the quarter was INR42 crores and net loss reported at INR37 crores. For nine months ended of the financial year 2025, the revenue from operations stood at INR481 crores, which declined by 5.4% Y-o-Y. Revenue loss stood at INR82 crores and net loss was reported at INR80 crores.
With regards to new initiatives in Q3 FY ’25, the expenses amounted to around INR13 crores, while for nine months ended, for financial year 2025, it was about INR36 crores. And if we — if you were to adjust for these investments, the adjusted EBITDA from existing operations in Q3 and nine months would have been approximately INR29 crores and INR46 crores respectively. Digital media revenues for the 3rd-quarter stood at around INR71 crores, up by approximately 25% Y-o-Y. While for nine months ended for the current financial year, it was INR195 crores, which grew approximately by 14%. Traditional media revenues for the 3rd-quarter stood at around INR94 crores, which declined by around 6% Y-o-Y, while for nine months ended for the current financial year, it was INR26 crores, which was a degrowth of approximately 15%.
I would — I now would request our CEO, Mr to give you operational highlights for the period under review. Thank you.
Hiren Gada — Chief Executive Officer
Thank you, Amit, and good afternoon, everyone. This quarter, we experienced a subdued festive season advertising spend, marking one of the lowest levels in recent years due to sluggish consumer demand. Both digital and traditional advertising revenues continued to face significant pressure. Although we saw growth in viewership across our own digital and traditional platform, monetizing this growth proved challenging in the current weak advertising market environment. Our traditional B2B syndication business also remained under pressure due to deferred deal closures, which was a consequence of the ongoing transitional shifts in the media industry, various players over the past few quarters.
However, we remain optimistic that these deals will materialize in the coming months. Despite the challenging advertising environment, we are pleased to report a revenue growth driven by the strong performance of our digital B2B syndication business. The company’s margins were impacted by ongoing accelerated inventory charge-offs, a strategic initiative that we began last financial year. As you may already know by now, these charge-offs are purely accounting adjustments and do not reflect our business performance. Excluding the effects of these charge-offs and the deferred deal closures, we delivered healthy operating metrics during the quarter, highlighting the strength of our underlying fundamentals. We remain — we remain focused on — we continue to remain focused on strengthening our balance sheet and driving operational efficiencies, positioning ourselves to unlock the intrinsic value over the long-term.
Further, in our digital segment, continues to gain traction, particularly with our Gujarati content offerings. This quarter, we released 14 new titles, including movies, movies or series and plays, expanding our content portfolio. Noteworthy premieres include the blockbuster movie which was the highest-grossing film of 2024 Rado, Udan and the release of original web series Santa. On YouTube, Shemaru has achieved a remarkable milestone of crossing 70 million subscribers, reflecting our growing digital footprint and audience engagement. During the quarter, we launched a new DTI service called, a devotional service available on Tata Play. This launch represents our continued efforts to expand our offerings and cater to diverse audience preferences. Our general entertainment channels continue to perform well, achieving a viewership share of around 7.6% in the overall Hindi GVC journal.
With that, I open the floor for questions — for the Q&A session.
Questions and Answers:
Operator
Thank very much. [Operator Instructions] The first question is from the line of Yash Kukreja from Equitree Capital. Please go-ahead.
Yash Kukreja
Hi, thank you so much for the opportunity. Sir, my first question is, what has been the inventory write-off in Q3 and also nine months FY ’25 and how much are we planning to do in Q4?
Hiren Gada
So inventory so I’ll while Amit gives you the exact number, but I’ll give you just the closing numbers, which gives you an idea of the trend trend but this includes additions and purchases also, but I’ll just give you a sense of in last year, which is December 2023, we were at INR727 crores 12 months ago. And that was a starting point for the charge-off. March, we had brought it down to INR682 crores. The last reported balance sheet, which was a September Six-Month number, we were at INR618 crores and as of December, we stand at INR589 crores. So roughly INR29 crores is an incremental amortization, which includes the addition of content as well. Yeah. So we have brought down the inventory by roughly about INR130 odd crores from in a 12-month period, but this includes addition also. So this is a net of inventory. And what was your second question, sorry? Nine months.
Yash Kukreja
Okay, yeah and my — I have two bookkeeping questions. Sir, second is interest cost has increased in Q3 so just wanted to understand what is the debt level as of December? And are we sticking to the guidance of reducing the debt by 100 cm in next two years.
Amit Haria
So debt for December is INR331 crores. So in September again we were at 338. We are at about INR331 crores. And we are — I mean, our effort to reduce it by INR100 crores over the next two years is definitely fully on and we are committed to reduce that. And I would say we have reasonable visibility. There was, as we shared in the opening remarks, deferral of few digital — sorry, a few television syndication deals, you know, and once those kind of materialize, a substantial portion of that would go into the debt repayment part. So we are confident of reaching that near about their number in by end of FY ’26.
Yash Kukreja
So sir, your debt as of September was INR338 crore. And as of December it is 331 crore. So we have reduced by INR7 crores that correct?
Amit Haria
Yes. Yes.
Yash Kukreja
So sir, then interest cost has also gone up. So how would you explain that?
Amit Haria
So we would — we had taken a temporary borrowing for acquisition of content during the quarter. And on account of that, there is an incremental interest cost which has which has been incurred.
Hiren Gada
So as we shared, I’ll just take a step-back. As we shared last quarter also that there were some content availability at some good prices, which we had picked-up during this last about three, four months, some of which we — we had to reserve to some additional borrowing, which has through subsequent cash flows, we have repaid by — before the — by — it would have been a temporary two months or a Three-Month kind of borrowing, which has been kind of repaid back. So the debt level has been maintained, but in the interim, the number would have gone up and therefore, there is a higher interest cost payout on that account.
Yash Kukreja
Okay, got it, sir. And my sir, last question is, there has been 23% jump-in the employee cost in Q3. And so sir, as per our previous communication, most of our senior-level hirings were done. So wanted to understand if this was one-time expense or will this trend continue?
Amit Haria
It is a one-time expense on account of the annual PLI or bonusing, which happens generally at the Diwali time around that time.
Yash Kukreja
Okay. So sir, just wanted to confirm our employee cost will be around that 30 only sorry. Wanted to understand if our employee cost will be around that INR30 cR figure only for the remaining year?
Amit Haria
Yes, it should be around that figure.
Hiren Gada
Yeah, should be around that figure. Yeah, in the next quarter.
Yash Kukreja
Okay. I’ll come back-in queue. Thank you so much, sir.
Operator
Thank you. Thank you. Ladies and gentlemen, you may press star and 1 to ask a question. A reminder to all the participants, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Ayush Jalan [Phonetic] who is an Individual investor. Please go-ahead.
Ayush Jalan
Hi, good afternoon. Thank you for the opportunity. Sir, you had initially guided for FY ’25 spend on new initiatives at around INR60 crores to INR65 crores. Now we are currently at around INR36 crores. So do we stick by that guidance or would you reduce it right now?
Hiren Gada
I would — I mean, our aim is to finish be probably in the range of about INR50 odd crores — between INR50 crore and INR55 crores and we are confident. So we — I — my sense is that we will be about INR10 crores lower on the investment than initially what we had estimated at the beginning of the year.
Ayush Jalan
Okay. Thank you, sir. That was my only question. Wish you all the best for the future, sir. Thank you.
Hiren Gada
Thank you.
Operator
Thank you. The next follow-up question is from the line of Yashku Kresha from Equitree Capital. Please go-ahead.
Yash Kukreja
So thank you for taking up the following question. So sir, could you help me with the operating cash-flow number as of nine months as of December.
Amit Haria
It is B2 for the nine months ended, there is net positive cash-flow of INR7 crores because of which the debt has come down compared to March levels.
Yash Kukreja
Okay.
Hiren Gada
But this also includes the investor investment in the content extraordinary investment in content. If you were to add that back, it’s upwards of around nearly about INR50-odd crores range on account of operational business, we are positive by INR7 crores, including the investment in new initiative content, etc., everything.
Yash Kukreja
Got it, sir. Okay. So any update on that GST matter?
Amit Haria
So as we have updated in the earnings, the financials that we have received released. However, the update is that we have got the notice and company has finally replied with the relevant authorities denying such claims. We are waiting for the further course of action with the department.
Yash Kukreja
Got it, sir. And sir, my last question is, as you mentioned that demand has remained subdued in the — in previous quarters. So sir, I wanted to understand that our digital segment has been growing. So what is the client profile there that is helping us that is contributing to this growth, like what segment is there?
Hiren Gada
So Yash, the growth in digital segment has been largely driven by our digital syndication business. The demand stress on advertising continues to be there both on TV and on digital. Digital may be a slightly lesser than TV. TV is seeing serious crunch on-demand. But the growth has been driven largely by the content that we syndicate to digital platforms. So that’s where the growth has come from.
Yash Kukreja
Got it, sir. And sir, my last question is, so considering the write-off, how do we look at it like in the next year, so how will be going to write it off? Like what is the target?
Amit Haria
We had mentioned that this additional write-off that we are — or the accelerated write-off that we are planning is planned till FY ’26. So it would be on the same lines.
Yash Kukreja
Okay. Got it, sir. Thank you so much. Thank you so much.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants you may press star and one to ask a question ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star on one to ask a question. And as there are no further questions from the participants, I would now like to hand the conference over to Mr Hiren Gara from Shemaru Entertainment Limited for closing comments.
Hiren Gada
Thank you. Thank you everyone for participating in the Q3 earnings call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach-out to our IR Managers, Valorem Advisors. Thank you.
Operator
[Operator Closing Remarks]