Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Shemaroo Entertainment Ltd (NSE: SHEMAROO) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Hiren Gada — Chief Executive Officer
Analysts:
Purvangi Jain — Analyst
Unidentified Participant
Sanjeev Pandya — Analyst
Harshit Mishra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY 2026 conference call of Shimaru Entertainment Limited hosted by Valorum Advisors. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference call, please signal an operator by pressing Star and then zero on your touch tone telephone. I now hand the conference over to Ms. Purvangi Jain from Valorum Advisors.
Thank you. And over to you, ma’. Am.
Purvangi Jain — Analyst
Good afternoon everyone and a warm welcome to you all. My name is Parvangi Jain from Valorum Advisors. We represent the investor relations of Shimaru Entertainment Limited on behalf of the company, I would like to thank you all for participating in the company’s earnings call for the fourth quarter and financial year ended 2026. 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 belief 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 decision. 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. Ayya Chakravarti, COO, Mr. Amit Thadia, outgoing CFO and Mr. Ashish Gupta, incoming CFO. Without any delay, I request Mr. Hiren Kara to start with his opening remarks. Thank you. And over to you sir.
Hiren Gada — Chief Executive Officer
Thank you Purvangi. And good afternoon everyone and welcome to our earnings call for the fourth quarter and financial year ended 2026. Let me begin with sharing some of the key financial highlights for the period under review, followed by the key operational highlights and also the strategic roadmap for FY27. For the fourth quarter of the financial year 2026, the revenue from operations stood at around 140 crores. The company reported an EBITDA loss of about 87 crores for the quarter with a net loss stood at around 72 crores.
INR for the financial year ended 2026, the revenue from operations stood at around 583 crores. The company reported an EBITDA loss of about 265 crores for the period while the net loss stood at around 219 crores. With regards to the new initiatives, expenses in the fourth quarter for the financial year 2026amounted to around 57 crores. Adjusting for these investments, the EBITDA loss from existing operations for the quarter would have been around 31 crores. The same expenses for the financial year 2026amounted to 155 crores.
Adjusting for these investments, EBITDA loss from existing operations for the financial year would have been around 110 crores. As you are aware, margins remained under pressure due to the ongoing accelerated inventory charge off, a strategic initiative that we began nine quarters ago. Over this period, inventory has reduced significantly by about 400 crores approximately from about 738 crores to 339 crores. So in H1 FY24 which was September 23rd half year we were at 738 crores inventory and that has now come down to 339 crores as of March 2026 while debt levels have also declined to around 300 crores.
Importantly, Q4 marks the final quarter of the charge off cycle in line with our earlier guidance. These charge offs are purely accounting adjustments and do not impact the monetization potential of our current library or our ability to generate free cash flows. With the strategic inventory charge off cycle now concluded, we believe the business is entering the next phase with a stronger balance sheet, lower debt levels and a healthier content inventory position, providing a solid foundation for long term growth.
Moving to the business segment performance, digital media revenues for the fourth quarter stood at approximately 67 crores, registering a year on year growth of 17% while traditional media revenues for the quarter stood at around 73 crores, down by 51%. For the financial year 2026, digital media revenues grew by 9% on a year on year basis to 275 crores when traditional media segment saw degrowth of 29% to 308 crores. The overall performance during the quarter continued to be impacted by weakness in the traditional business even as the digital segment maintained healthy growth momentum.
Digital revenue growth was led by strong momentum in the syndication business and continued expansion of the Shimarumi subscriber base which increased by over 30% year on year during the quarter on the traditional media side revenues were impacted by a weak advertising environment and the moderation in syndication revenue. The decline in syndication was largely driven by the inherently lumpy nature of revenues along with the high base. In the corresponding quarter last year, advertising performance was further impacted by war related uncertainties which weighed on overall ad spend while major sporting events attracted a larger share of advertising budgets.
Given the ongoing macroeconomic pressures, geopolitical tensions and major sporting events like the ipl, the overall advertising outlook for traditional business is expected to remain subdued in the near term, particularly for non sports categories in other updates Shimarumi Gujarati we released about six new titles for the quarter spanning movies, web series and plays. The platform also saw the world digital premiere of movies such as Chania Todi, Nankatai, Fatime, Gotilo and Shubchintak Hindi Dub Shemarumi premiered its first original Hindi web series Dil Dukha Desire under the Shemaru Premiere banner, further strengthening our original content portfolio and premium digital offerings on YouTube.
The flagship channel Shemaru Filmigan has surpassed 74 million subscribers during the quarter, while the Shemaru Entertainment crossed 61 million milestones across its entire portfolio of channels. The company garnered more than 9 billion views during the quarter, reflecting sustained digital engagement. We also marked an important milestone in our international content strategy with the co production of our first Turkish drama series Aska Makum in partnership with Global Sphere Studios. As we enter FY27, our focus remains on building a strong digital first media business by expanding Shamaru’s presence across digital ecosystems in both domestic and international markets.
With audience consumption continuing to shift towards the digital platforms, we are focused on scaling reach, improving monetization and enhancing content discoverability across platforms and formats. At the same time, we are leveraging technology and AI interventions to drive operational efficiencies and optimize revenues across business. We are also focused on strengthening our portfolio through curated and owned IPs which we believe will play an important role in driving sustainable growth and long term value creation for the company.
With that, I now open the floor for the question and answer section.
Questions and Answers:
Operator
Thank you very much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter STAR and one on the touch tone telephone. If you wish to withdraw yourself from the question queue, you may enter STAR followed by 2. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Urmesh Shah from Moneyvisors. Please go Ahead.
Unidentified Participant
Yeah, thank you for the opportunity. I hope I’m audible. Yes,
Operator
Sir. Please go ahead.
Unidentified Participant
My first question is on the traditional business. I do understand in your opening remarks you did say that we faced a considerable decline. So what is the reason for that and how do you see it shape up in FY27 and FY28? If you could just give some color on that.
Hiren Gada
Sure. So there are two overall challenges. So one is media industry related, which is an ad slowdown which is due to various questions, various challenges that the economy is facing. Finally, media is a derivative of the economic situation of the country because as various products have to reach the consumer in a buoyant economic market, in a buoyant economy, the propensity to advertise increases and in a subdued economy it reduces. So that is an overall industry level. The other is the steady shift from traditional to digital media which in this financial year definitely we have seen acceleration of at least the advertising spend shifting far more towards digital media as compared to traditional media.
So advertising as a combination of both the traditional media revenues have faced challenge. Now in terms of the outlook, the way we are seeing it, we don’t anticipate any significant growth acceleration from the traditional media business. And in fact, as I also shared during my opening remarks, that the whole focus of the company itself, we have shifted significantly to a digital first kind of thought process and beingness. So in that sense we have positioned and geared ourselves significantly towards increasing our investments.
People focus many other things towards the whole digital media. But yeah, traditional media continues to be a large business for the entire industry. And to that extent we have to manage it through its declining phase or the declining contribution towards digital, towards the entire pie.
Unidentified Participant
So when you say declining contribution, so if I just talk in terms of the product mix Today it is 53 to 47 from traditional to digital. So when you say that digital first is our strategy going forward, what is the shift in the production that you are anticipating? I mean at 60, 40 or you know, what’s your target?
Hiren Gada
I believe ultimately over a three to five year period we should be probably at more than 1 3rd, 2 3rd or probably even 1 4th, 3 4th, somewhere in between that in a three to five year period, we should be moving towards that. Now what will year to year it is very difficult to give, you know, give a color that what it will be in FY27 or 28 because of various factors. But
Unidentified Participant
You
Hiren Gada
Know that in a three to five year point of view, that is the trend is, that is a direction in which it Will trend.
Unidentified Participant
Okay, so next question is on the debt. I mean any term in terms of debt reduction plan going forward. If you could just give some color on that.
Hiren Gada
So as we have, even as I shared even in the opening remarks, that actually even during this period of charge off the cash flow has been in a good position and we have been able to reduce debt, although marginally. And considering the fact that this few months have been an extremely challenging period for the economy and for the industry, notwithstanding that we are committed to the debt reduction process and thought process. And to that extent we have even in this quarter, the promoters have in fact infused capital through a preferential allotment.
And you know, we are as a, as an organization, we are committed towards that. Obviously there is an external world that we are dealing with. We are doing, we are putting in all the necessary input metrics to reach where we want to reach in terms of profitability and cash flow and debt reduction.
Unidentified Participant
Okay, so on new initiatives, our FY26 cost was 155 crores. Right. So in FY27, you know, we kept aside some amount for that also or you know, how is it
Hiren Gada
We have and it will be significantly lower than what it was in FY26. It will probably be less than, less than half of it. I mean right now I’m not in a position to give you an exact number, but from, from what we have overall budgeted for this year, it will be less than half of what we have spent in. Or what you want to add? Yeah,
Unidentified Participant
I think when we urmesh when we’re talking about new initiatives, basically new initiatives for us has been broadcast and our OTT business. But the point is that broadcast is coming in the traditional part and as you heard Hiren said that our focus going forward in terms of all our investments, people, any other focus will be on driving digital. So hence the new initiatives as we see today, as Irene said, while we cannot put a number, but it is likely to come down quite a bit, almost, maybe even less than half of it.
But we can’t put a number, but the focus is clearly towards driving our digital business.
Hiren Gada
And, and just to add to that, within that also, the investment will be largely skewed for Shimarumi where we are seeing very good traction.
Unidentified Participant
So one final question. I know it’s a bit too early considering the numbers right now, but till when can we expect to be EBITDA and pat positive?
Hiren Gada
So I think it’s a very relevant question. We are, as I said earlier also that we are fully committed to we believe in the long term of this business and we continue to invest and we feel that all the inputs are constantly there. We have been pushing all the inputs. So for example, whether it is the Shimarumi, you know, whole where we have reached a certain point overall in the journey, whether it’s all other digital initiatives, YouTube on licensing, syndication, etc. So we have all the input metrics constantly being monitored and worked upon.
Output of course, depends on fact, you know, a few external factors. I think if they, you know, if they fall in line, I think we, you know, we should have a very good period ahead.
Unidentified Participant
Sure, sir. Thank you. I’ll join back with you. Thank you.
Operator
Thank you. Participants with Questions may enter. Star and 1. The next question is from the line of Shubhangi from Robo Capital. Please go ahead.
Unidentified Participant
Yes,
Operator
Ma’. Am.
Unidentified Participant
Thank you for the opportunity. Just wanted to know your outlook on top line growth and ebitda margins for FY25 and FY28.
Hiren Gada
FY25, 26,
Unidentified Participant
27 and 28,
Hiren Gada
27 and 29. So I just actually addressed this in the previous question that given the current overall scenario it is an extremely. It’s very difficult for us to give a guidance. But we are working constantly on all the input side metrics, whether it is on cost optimization, on all our revenue levers that we can push and AI and digital focus. So there’s a very large AI initiative on multiple fronts that we are working on. So all of those inputs are constantly being fine tuned and worked upon. The output which is growth of top line and bottom line positivity are beyond a point not in our hand.
And as we know for last almost three to four quarters, the media industry has been severely challenged in terms of overall ad spend. So as we see and as we speak, given the current economic scenario, this is likely to remain challenged for, for some more time. Till that time it is very tough to give any outlook, any hard outlook.
Unidentified Participant
Thank you. That’s all the best.
Operator
Thank you. The next question is from the line of Sanjeev Pandya from LanSource. Please go ahead.
Sanjeev Pandya
Can you hear me? Yeah. Okay. I will look a little beyond. I represent terminal value investors. You know, they are large investors and they invest for terminal value. So I will not be focusing on, you know, your current results and even your short term outlook. So my question relates to the, to the business model volatility, how exactly when you conceptualize. So it’s okay for you to stop me and then say that no, this is too deep a question. And Maybe taken, in fact, I’m looking for that can be taken offline, you know, directly.
So if you think I’m going too deep into the subject, please, you can stop me, sir. So this is about business model volatility. In every, you know, valuation table, in every discounted cash flow. One of the ways by which we price the cost of capital is when we look for lower volatility or some kind of risk management where the downside is taken care of by the company in your business. I mean, the outside perception is that media is by its very nature very, very volatile. As you can see, you can’t look beyond the next quarter, let alone into the far into the future.
So unlike, let’s say a commodity company where we know that the industry is always going to be there, you cannot see the same thing of let’s say a media company. So from a business model angle, have you given this some thought?
Hiren Gada
Okay, I think it’s an extremely good question. I have two ways to answer it. One is I will talk about a very brief aspect over here, but I will definitely mind having a longer discussion offline. But I think for now we can have a very small brief answer to it. So actually, contrary to what you are saying, media industry has probably one of the most stable and best long term value predictability. Okay. And particularly that is exactly how we have built our business. And to give you just few examples I want to talk of.
So we believe in the, and not just we believe we have demonstrably seen through empirical evidence in the long term value of content ip. Okay. And to give you an example, I mean we have a movie perpetually owned, a movie called Amaragbar Anthony. Now this movie when video cassettes were being sold. So technology has been evolving and actually expanding the consumption and scaling the business over many decades. But you know, content has been the only constant rather. So whether Amar Akbar Anthony got, you know, sold on video cassettes on BCD or DVD, consumed on television, on YouTube or on digital media, I think it has worked at the conceptual, at a fundamental level that content has worked and it has kind of been consumed across whether it is whichever media that the audience, whichever media has been at that time consumed by audiences.
On similar note, you can think of movies like welcome Jabbi, Matt Ferreira Ferry, etc. Which we own perpetual rights to and which you can easily identify or relate to in terms of their long term value and monetizability. We have in fact experienced the growing monetization trend. Yes. What we have seen in fact, contrary to what you Said the short term prediction is unlikely. It’s very difficult because there will be too many variables in any given quarter. But what we have in fact experienced is that in the short term we end up over, we end up being more pessimistic or underestimating.
And in the long term, sorry, overestimating in the short term and in the long term we actually end up underestimating. I clearly remember when we did our ipo, the contribution of digital business at that time was in single digit. And today, as we saw and we just shared and spoke earlier, we are at roughly 50, 50%. And the outlook, we can say with far more certainty over the next three to five years is going to be between two third and three fourth thereabouts of digital contribution. So actually the very solid predictability of this business, the cash flow generation ability of this business is phenomenally high.
What we do with that cash flow, how we are investing that cash flow into Future Avenues, etc etc. Is a different matter. But if you see the core underlying cash generating ability of this business and predictability, in fact it is extremely solid.
Sanjeev Pandya
Right. So that opens up to further questions for which
Hiren Gada
I would like to take this offline because this, you know, so I’ll stay with a
Sanjeev Pandya
Small one.
Hiren Gada
So I’ll
Sanjeev Pandya
Just play with the small one. Am I permitted that?
Hiren Gada
Yeah, you can. I mean, please.
Sanjeev Pandya
So this is exactly why, you know, terminal value investors, people who look at long term sustainable, you know, cash flows would value your company more highly than the next quarter watchers. How exactly you manage this volatility? Through your business mix, which would be a strategic mix of the business and any tactical measures that you might take, you go through a particular cycle. Like you said, there is a digital cycle to your ratio of your old content inventory. Those also have shifting patterns depending on the age of the population, etc.
I mean Amar Azbar Anthony may be interesting to a 60 year old, but may not be interesting to a 20 year old. So there would be some kind of a decay. Do you have information on how your portfolio would pan out over a period of time?
Hiren Gada
Absolutely, we have and we do. Finally, we also understand the fact that content, there is a content, certain amount of content decay that happens and that is what we have to manage, the life cycle of that content. We understand certain content has higher shelf life, certain has lower shelf life. So all that is part of our DNA. I mean we have been, we deal in thousands of movies, we’ve been doing this for decades now. So we have a certain understanding of this business and this is exactly what we manage across our portfolio, across our own acquisition models that we build.
We have a proprietary value valuation model where this life cycle shelf life is actually an important part of the whole consideration whether we want to pay a premium or not. And all that is, I mean rest assured, all that is, you know, mapped. And this thing, I would only thing I would like to say here is that there is. So anyway, this is a deeper question. I mean it’s not really pertaining to a particular quarter or a particular year. So I think I would like to take this offline. We have, I mean there are many, many more examples I can give about you know, content which, you know, content of 20, 24 and 25 which doesn’t perform at all.
And during content of 1972 which actually delivers like 10x in terms of revenue. I save my
Sanjeev Pandya
Questions for direct meeting. I’m hoping you’ll give me some personal time.
Hiren Gada
So I would suggest you can reach out to Valorum Advisors and they will help you set up even they’ll be able to answer and then I’ll set up the meeting.
Sanjeev Pandya
Okay, thank you. Thank you.
Operator
Thank you. Participants with Questions may enter STAR and 1. The next question is from the line of Harshit from Robo Capital. Please go ahead.
Harshit Mishra
Hi sir. Thank you for the opportunity. Am I audible?
Operator
Yes sir, please go ahead.
Harshit Mishra
Yes, I just wanted
Sanjeev Pandya
To understand that we have 87 crores of in this quarter.
Hiren Gada
Take up.
Harshit Mishra
Yes. Breakup of the 87 crores. How much loss was from Shema Rumi and you know like that.
Hiren Gada
So we’ve given a number on the investment. Right. In this quarter it was about 55,55 crore. New initiatives was for this quarter. 56 crores. Yeah. Which is 50 Fixes combination which has two businesses in it broadcast and.
Harshit Mishra
Okay. All right. And just from Sema Rumi. Do you have that breakup with you?
Hiren Gada
No, no, we don’t give that breakup.
Harshit Mishra
Okay. All right. Thank you.
Operator
Thank you. The next question is from the line of Rajat Shah, an individual investor. Please go ahead.
Unidentified Participant
Hi sir, just had a question regarding the inventory. We have written down 275 crores or this year and I think we stand at around 339crores. So what is the plan going forward?
Hiren Gada
We have not written down 275 crores. But anyway you ask your question.
Unidentified Participant
Yeah. So what’s the target inventory level and till when do we write it down? Like keep writing it down.
Hiren Gada
I think you missed my opening comments because I elaborated very a lot on that. This is the last quarter. So after this the Charge of the accelerated charge off is over now it is in normal course.
Unidentified Participant
All right, all right. So cash flow wise we are very much positive. So all of this seems very much non cash. So on that front we are very well. Yeah. So thank you so much.
Operator
Thank you. The next question is from the line of Tanmay Golecha from 361 Capital Markets. Please go ahead.
Hiren Gada
Hi. Hi. Sorry I missed a bit of the call. I just wanted to understand the guidance for FY27 and 28. From what fronts do we see the most coming in of our segments? And now that the accelerated
Unidentified Participant
Inventory write off is ended, do we see a positive pat coming in?
Hiren Gada
I just actually spoken about this earlier so two questions you had. One is where do we see the growth coming from? As we have clearly said in the opening remarks also that digital is the segment where we have seen growth in this year, in the last couple of years and overall industry has also seen much more growth on the digital and degrowth on the traditional side. Actually the industry advertising spends have actually degrown by more than 15% on traditional side but digital has grown. So our whole focus as an organization is on to be the digital first, to be a digital first organization.
And that is really where we are looking forward to the growth. And on the guidance wise hard numbers as I said is very difficult to give in the current scenario of geopolitical and economic impact of all the various fallout of the geopolitical situation. So we have worked on the input side metrics, I can talk about that. Which is focusing on the investment on digital side on the content strengthening on the IP front focusing on various productivity aspects whether it’s through AI, through other cost rationalization and optimization measures and strategically focusing on content segments, whether it is outside Hindi, whether it’s Shimarumi etc.
Etc. All those things are very much in place and on a constant tracking and monitoring from our end by our team. So that is something that we are very much doing now. How it translates into growth and how much bottom line right now it’s very tough to actually give numbers.
Unidentified Participant
How much inventory do we have left to write off?
Hiren Gada
No, that our accelerated charge off is over. Rest is all normal inventory which we have closed the year at 339 crores.
Sanjeev Pandya
Okay, I think that’s all. Thank you.
Hiren Gada
Yeah,
Harshit Mishra
Thank you.
Operator
Thank you. The next question is from the line of Amit Mehendale from Robo Capital. Please go ahead.
Unidentified Participant
Thank you. Thanks for the opportunity. My first question is on the digital business, how do you see revenue growth there for Next two, three years and also some ebitda, you know, the margins, if you feel that will be upgraded. Yes, I think this is also here. I think the digital business as you see this year also as you know, as Hiran called out in its opening comments, this quarter we have grown by about 17% and at an overall annual level we have grown by about 9 odd percent. And I think the momentum that you see around digital business over a period of time now I think is likely to continue and our entire investment and our entire strategic focus will continue to drive our digital businesses whether it is on the various platforms.
We have various platforms as you know. So we expect the growth momentum to continue and we are prepared and we have prepped ourselves in terms of all our investment and all our plans and strategies around that. To quantify it would be very difficult to do. But we think that the healthy clip of growth of digital would continue to maintain at the same pace. We will hope that it is better as of now. That’s the kind of outlook that we have on the digital front. Could you comment. I also missed the earlier part of the call.
Could you comment on the margins? Like what were the margins for FY26 and how do you see, you know, over say two, three years as the business scales up on the digital side? We have not called, we have not spoken about our margins on the digital. There are, if you look at broadly from a digital business point of view, there are two large buckets. One is our DVP business which is our YouTube and a small amount of reasonably small amount of Facebook business that we do meta meta. And on the other side is OTT and OTT which is our Shamaru Me which is, you know, we have also called out very strong performance metrics in terms of a 30% plus of cyber growth OTT business as you know, not just US and overall industry itself is a negative margin business.
And as you scale, you can scale higher, your margins will only grow. So we are very in this kind of an environment at an overall macroeconomic and geopolitical situation where the overall pressures appear on numbers. We have always been very prudent and cautious in scorpion scaling of our OTT business. So Shimarumi, we have scaled significantly over the last few years while we have kept the burns at a prudent level and that is what we continue to do. We will continue to do so while the other parts of the digital business is margin accretive and that also has seen focus and will continue to stay focused.
So at an overall level there are Two parts to it. One is margin accretive and one is both. We are driving one, the one which is not margin aggregated. We are being a little prudent. We have been prudent. We will continue to be prudent. But we are seeing growth on both fronts actually. Right, sir. And could you give breakup of the 56 crore that was earlier on initiative some broad breakup like top two three items.
Hiren Gada
There are only two businesses in that the Broadcast and Shimarumi.
Sanjeev Pandya
Only two business.
Hiren Gada
I can say without putting numbers. Definitely the investment was significant. The amount was significantly higher on broadcast front compared to Shimaruni in the last financial year.
Unidentified Participant
Okay, perfect. I think that’s it for my end. I also have, you know, I would also like to discuss the terminal value part on the legacy businesses. So I would also like to join. If there is a call, I’ll forward it with the ir. Thanks.
Hiren Gada
I request that anyone who may want to have any further, you know, query, we would love to answer. We’re happy to, you know, connect with everyone. But you can reach out to Valorum Advisor. That’s my request.
Unidentified Participant
Thank you.
Operator
Thank you. The next question is from the line of Chirag, an individual investor. Please go ahead.
Harshit Mishra
Hello, Am I audible?
Operator
Yes sir. Please go ahead.
Harshit Mishra
Yeah. Yeah. Good afternoon sir. So sir, my question was.
Hiren Gada
Yes, please
Operator
Proceed sir.
Harshit Mishra
So sir, can you please provide the revenue split like how much comes from YouTube, how much from OTT and how much from syndicate, syndication, business etc.
Hiren Gada
Unfortunately we do not report revenue in that manner. We have been for last, I mean more than 10 years we have been reporting traditional and digital and that kind of is the, you know, split that we have been kind of giving for last many years.
Harshit Mishra
Okay, so one more question, sir. How is the content acquisition strategy evolving for FY27? Specifically, what is the mix between Hindi catalog and regional content? And are you seeing any inflation in acquisition costs?
Hiren Gada
Okay, so I’ll address it in this way. See the overall content. As we have been talking throughout this today’s discussion, the focus on content acquisition is largely going to be digital led. Now within that, whether it’s the language mix of Hindi, Gujarati or even other languages like south etc. I think that is something that we will. Each business has mapped out their own strategy. But there is a. Whether it’s on the acquisition front or on the creation front, it will both be driven by digital.
Second is on traditional side, the content acquisition strategy will be very opportunistic based on some opportunity to license and syndicate and bundle it along with
Sanjeev Pandya
Our
Hiren Gada
Existing library catalog. The Other aspect of your question was on the cost inflation. So finally, cost of content is linked to revenue and recovery. So where the digital media business, we have overall seen revenues go up. So the costs have also commensurately been going up. And where traditional media, the revenues have been going down, the costs have been going down. Our focus always, normally when we do an acquisition is an 18% IRR. It’s really not
Harshit Mishra
Whether the
Hiren Gada
Cost has gone up or down. It doesn’t matter as long as there is a monetization and a potential to make an 18% IRR.
Harshit Mishra
Okay, sir. Yeah. Thank you so much, sir. Thank you. Good day.
Operator
Thank you. Participants with Questions may enter STAR and 1. The next question is from the line of Rajesh Jain, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Am I audible?
Hiren Gada
Yes. Yes, Hello. Yeah,
Unidentified Participant
So. So my first question was that when do you expect Shimarumi to achieve a EBITDA break even and what would be the key milestones required to get there? Hi, Gaurav. Shimaru me. Oh sorry, sorry. This is Rajesh. I’m sorry, my. My bad. So Shimaru me, you know, as you know, I think a couple of questions back I had spoken about is is our OTT business and OTT business, I mean not just us, I think very few, you know, industry wise, it’s something which is not cash burn kind of business. So hence, and as we scale, as we scale the size of this, as we scale this business, there will continue to be cash burn.
The only thing that we are going to do is as we scale like we have done this year to a very large extent, the scaling of Shimadumi will largely be thereby keeping the cash burn to a minimum. So we will be prudent in our objective of scaling Shimaruni. So as of now, breakeven is not the objective. The objective is to drive more subscriber base, driving long term value and creating further dominance in Gujarati where we are already dominant and gradually expanding our footprint to other IP curations, creations in Hindi and other languages.
So our milestones are very clearly around driving skills scale through, increasing the subscriber base, increasing the permanent life base of our subscribers and getting further dominant in Gujarati and expanding across other languages. Those are the milestones that we are chasing in Shimaru Me. But while we are doing that, we will be doing it as I said, I repeat once again, we will be very prudent in terms of keeping our cash burns low. But EBITDA positive or EBITDA neutral is not objective on Shimadhu Mundi.
Hiren Gada
I will just add to that. I think what we have achieved here is a significantly high market share and a significantly high mind share amongst the core Gujarati consuming audience. And today, you know, one can very proudly say that we are by a very big earnings mile. We are, you know, I had literally from whoever would be the next number two. So that I think and what that does is gives us a very strong headroom. One is to expand the market. Go and expand the market and for which we need to, you know, do certain more investments.
Because please understand one thing that this business, once you have reached that kind of position then the lifetime value of the user base that you have actually comes into play. And that is a significant number. Now that point is still some time away and current objective for this business is to change that and reach that point rather than focus on lowering costs etc. Because the moment you do that you will lose lifetime value, whatever of the audience. And that really is the focus. And while doing all of that, do it in a prudent manner that we don’t so to say break the bank on this.
Unidentified Participant
Okay sir, thank you. That answers my question. My next question was regarding the money that we spent on new initiatives. So if I’m not mistaken, last year we had given the guidance that we will spend 75 new and kids,
Hiren Gada
Your voice is cracking. I’m not able to hear. Mr. Rajesh,
Unidentified Participant
Hello. Am I audible now?
Hiren Gada
Hello? Yeah, now it’s better.
Unidentified Participant
Yeah. So sir, my question was regarding the money that you spend towards new initiatives this year. So I think you spent 155 crores this year. And last year you had given the guidance that you were going to spend 75 crores. So my question is that why did you exceed your guidance by 80 crores.
Hiren Gada
As I said at the beginning of the call also that a large part of that was spent on television on the broadcasting business. And this particular year due to combination of various factors, the lower, the slower advertising revenue front and the entry of the big four broadcasters channels on the free to air free dish. You know this because of that the anticipated loss that we started with or the investment that we started with at the beginning of the year had kind of went up significantly throughout the year while we did various course correction and all of that.
But you know, this is a business where many costs are committed upfront and revenue
Sanjeev Pandya
Doesn’t translate.
Hiren Gada
You know, it takes time to pull back and reduce. And you know, which we have done now in, in the ensuing period. But and many of that you will see the impact of that visible in the next year. But yes, last year we have been continuously updating the fact that both this combination of slowdown in traditional media advertising and the entry of the big four on the free to air space has had a impact on the, on the revenue front.
Unidentified Participant
Okay. So sir, what would be our guidance for next year?
Hiren Gada
I just spoke about it earlier. It will be less than half is what we anticipate. Again, given the fact that this year the we are beginning on a, in a kind of condition of situation of economic turmoil because of the geopolitical situation, we also, you know, are not able to give a more solid guidance. But yeah, as of now we have not. We have based on everything that we have budgeted for the year, it is less than half of what we spent last year.
Unidentified Participant
Okay, so my next question was regarding your inventory level. So is there a change in the amortization policy going forward from now? So, so that we don’t have to do an accelerated inventory charge off?
Hiren Gada
So we have of course. So to give you the context of this inventory, the inventory charge of policy actually was changed nine quarters ago. Okay. And what we saw at that time we took a decision to accelerate the charge off on a set of inventory and the rest of it anyway is following the changed charge of policy. And I’ll quickly tell you what has changed. One is that earlier a lot of the charge off was linked to the deal or transaction happening which was kind of one in five year event. And that in a way led to some amount of, you know, bloating or whatever that carrying that inventory for a longer period.
So the visible, optically the number looked higher. Whereas now we are not doing that since last nine quarters. We are for content which we own long term. Right. Which is 10 years. And above that we
Harshit Mishra
Are charging
Hiren Gada
Of equally in a 10 year period. So that is one major case. Rest all the charge of policy broadly remains the same. So I don’t anticipate already we have brought it down to by 400 crores. I don’t anticipate, you know, there may be some quarterly fluctuations here and there based on what we have bought, what we have traded or sold. But by and large I don’t see any, you know, any charge of any such situation coming back.
Unidentified Participant
Thank you so much. My last question was regarding your Dubai subsidiary. So can we get an update on the operational status there?
Hiren Gada
At this point I would say it is on a low key. We have formed it for the web 3.0 metaverse kind of thing. That entire ecosystem is kind of right now on a slow Burn. So we have not really, you know, stepped up any investment over there. So we have kind of kept it on a, you know, slow, slow, soft pedal kind of thing as and when. So we have various development initiatives in place for the web3, metaverse, etc. But considering the fact that this ecosystem has kind of slowed down, we have ourselves slowed down that investment.
Unidentified Participant
Okay, so and my last question was that Shimaru Josh has now completed around seven to eight months since its launch. So could you share some color on its current ERP performance reach, revenue run rate, anything concrete that you know, that can help us? Shamaru Josh, I think has, I think the. It has moved. It has gone through its own trajectory and it’s still work in progress as we move in the Hindi film business. But the revenues and the GRPs have moved positively, but not to the extent that we would have wanted it to.
Having said that, the monetization, considering the overall ad industry challenge that we are going through, which has been talked about now ad nauseam, the impact of the same is being felt on that also. And hence the overall channel is not at the level that we wanted to do, but it is going through its own pace. That’s how I would place it right now. That’s all from my side, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Gaurav, an individual investor. Please go ahead.
Unidentified Participant
Hello. Thanks for the opportunity, sir. Hello?
Harshit Mishra
Yeah. Yeah. Hello.
Unidentified Participant
Yes. Yes, sir. Yes. The accelerated inventory charge of your done. Will it help us on a bit some margin front or just the ROE front of the business?
Hiren Gada
Sorry, I. I’m not able to hear your question. Hello? Hello,
Unidentified Participant
Can we, can you hear me sir, now?
Hiren Gada
Yeah. Hello.
Unidentified Participant
Accelerated inventory charge of your turn. Will it help our business in terms of EBITDA margin or the ROE side of the business?
Hiren Gada
Both ways. Right. The balance sheet has shrunk because the inventory has come down. So obviously the capital employed has come down to that extent. So that is one. And of course the charge off itself as the accelerated charge off reduces the additional charge of that we have been loading the inventory, the P and L for last nine quarters that will go away. So, so yeah that both impact should be visible.
Unidentified Participant
Okay sir, so my next question is of not tax front. How will be the tax form going forward, sir, since we can carry forward these losses.
Hiren Gada
So we will have, we have created deferred tax asset as a part of this and as the, you know, as the company goes into profit from for next foreseeable period at least we will be consuming the Deferred tax assets. So to that extent we should, we would not have it, I mean we would not end up not having a tax liability for next foreseeable few years.
Unidentified Participant
Basically
Hiren Gada
We have this tech shield due
Unidentified Participant
To the losses that has been created.
Hiren Gada
Yes.
Unidentified Participant
Okay, sir. And so like my last question would be on the broadcast front, how do you see the broadcast business and has it improved advertising in this quarter? Sir Gaurav, I think we have, I think you, I don’t know whether you joined late or not, but a lot of discussion have already happened on this. The overall traditional media business, which is a lot of it is advertising depending has been under serious challenge now for not just this quarter quarter, but for quite a few, four, five quarters.
It has been under stress because the overall ad economy has shrunk because of various reasons, macroeconomic and so on and so forth. And now off late we have the geopolitical issues adding on top of it. So all these things put together, the overall advertising business has come under pressure and coupled with that, the search on the digital businesses front, which has continued and even for our company as we have spoken about, both these things put together have put serious pressure on the traditional business, which is the television business.
And hence it has been a very challenging year on that front. And going forward also, I don’t see that challenge changing, you know, drastically going forward, at least in the near and immediate future that stress will continue to be so because the overall economic and environment situations have not changed. Okay, sir. Okay for my last question. The content you acquisit acquisition we do from here. Do we own this new contents perpetually or aggregated basis? Which
Hiren Gada
Content are you talking about?
Unidentified Participant
The content we are acquiring now these last two, three years going forward.
Hiren Gada
No, that is our model itself is a mix of both partial ownership and complete ownership. So broadly we kind of maintain that mix of partial and complete because some part of the business is your aggregation or use based business. So that we only license the content for a period and some of it we own it. So it’s a combination of both.
Unidentified Participant
Okay, thank you. That’s it for my sir. All the best.
Hiren Gada
Thank
Operator
You. The next is a follow up from the line of Amit Mendele from Robo Capital. Please go ahead.
Unidentified Participant
Thank you. My next. Yeah, my follow up was on the revenue growth for OTT business. Can you provide some color on that? Like what is the current reven? What do you expect in next two, three years? Normally Amit, we do not provide details on the revenue numbers but as we have called out, you can see A very healthy subscriber base increase which we have talked about a 30% and a large part of the revenue growth on the OTT business is driven by subscription growth. And that’s what you know, we are focusing on.
Our focus is on creating long term value and on keep increasing our subscriber base and increase. Expand the Gujarati market and get into other languages. That’s where I would put it. But it has been a very healthy clip of growth for sure. Right sir. And the burn for OTT is more on the subscriber side or what side of business is it more for acquisition, customer acquisitions like cac. So our business is an SVOD business. We don’t have an award business. So yes, the burn is. I mean the burn is led by a lot of.
It is led by customer acquisition and also content. You know, this is interested in content. So broadly
Hiren Gada
The last three large cost lines are on content, on customer acquisition and on the technology front. So I think it’s all combination of now difficult to identify and say which is, you know, which causes what I mean it’s an aggregation.
Unidentified Participant
Right sir, Thanks. I think, you know, if there is so many time left it will be, you know, great to understand more on the strategy going forward. You know, you would know better that there is another listed player that tried doing OTT for many years, didn’t work out. So what are we doing differently here that you know or what lessons have we learned from, you know, that side that we can incorporate here? Any color on that that will be critical any time. A larger question, Amit And I think this would require a larger conversation because we have been in this business for four, five years and it has been growing steadily.
We have our objectives and our strategy very clearly cut out. But that would require a larger conversation. I would suggest that you get in touch with us through Valvam and if you want to have a. Happy
Hiren Gada
To meet and discuss. Yeah, I would just say one point that when we started the business also we were very clear about the fact that this, as the OTT consumption grows it will be a segmented business and we need to identify a sharp segment and be focused and own or you know, have a dominance on that segment. And which is really the focus that we, which we took it and which is broadly fair to refer to it is Gujarati language. And that’s what we stuck to. We’ve not really deviated into anything else and single mindedly focused on that.
And I think that is now giving us the kind of strength and confidence in the future of this business.
Unidentified Participant
Right, sir, sure. Thanks a lot. I’ll take it offline.
Hiren Gada
Yes,
Operator
Thank you. The next question is from the line of Sanjeev Pandya from Lansource. Please go ahead.
Sanjeev Pandya
Yeah, so this is a follow up on the risk side, although it remains a terminal value question. You have certain amount of debt now the debt has to be paid with the probability of one. What would be the optionality in the. On the, you know, on the written off inventory where you could get sudden bursts of windfall profits that this often happens in various kinds of cyclicals. So even though you are saying that the inventory is written off, there would be a certain optionality of revenues that could potentially still come from there.
Do you have some kind of color on that possibility and how much of that could as a proportion of the debt?
Hiren Gada
I can. So I again would like to quote one or two examples over here or put it in a little different way. I mean irrespective of the fact, and this is something we have been continuously alluding to and saying that irrespective of the fact that there is an accelerated charge off, it doesn’t mean that that movie or that its content is not being consumed, it is being heavily like depending on its own trajectory and its life cycle, it is being consumed. That space has not changed or the trajectory, whatever it has been following has not changed at all.
So the monetization ability of that content has not at all changed. So I mean, I can give some example over here. I mean, you know, if you think of you know, Amar Akbar Anthony itself or a movie like, you know, say I don’t know, beta or something which you know is regularly heavily consumed on, across all media, television, digital, etc. Etc. The value of that on the balance sheet is zero. So
Unidentified Participant
Yeah,
Hiren Gada
But it is. Does it mean that it’s not getting monetized or lesser monetization? No, I mean our team is as aggressively. It doesn’t look at what is the cost side of that or it is on the balance sheet side. It’s Beta is being looked at as a piece of content with its inherent potential and being monetized in that fashion.
Sanjeev Pandya
Okay, we can’t get a color on as a proportion of the debt. How much of the debt can be considered as paid from
Hiren Gada
The life. As I told you earlier, this is beyond the scope of this quarter and years discussion. It’s. We can have a
Sanjeev Pandya
Separate
Hiren Gada
Discussion on that which I am happy to do as I invited you earlier, also happy to do all of that. But right now, I mean you. I am not able to give you. I also need to go back, do some working, and come back. Right.
Sanjeev Pandya
Right. Thank you. Thank you, sir.
Operator
Thank you. To ask a question, you may enter. Star and 1. As there are no further questions, I hand the floor back to the management for closing remarks.
Hiren Gada
Yeah. Thank you so much, everyone, for participating in today’s 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 Manager, Valorum Advisor. Thank you.
Operator
Thank you very much on behalf of Shimaru Entertainment limited that concludes this conference. Thank you for joining, and you may now disconnect your lines. Thank you.