TIPS Industries Limited (TIPSINDLTD) Q3 FY23 Earnings Concall Transcript

TIPS Industries Limited (NSE:TIPSINDLTD) Q3 FY23 Earnings Concall dated Jan. 24, 2023.

Corporate Participants:

Kumar Taurani — Chairman and Managing Director.

Sushant Dalmia — Chief Financial Officer

Analysts:

Ravi Naredi — Naredi Investment — Analyst

Akshay Sam — Sam Capital — Analyst

Anika Mittal — Nvest Research — Analyst

Devanshu Sampat — Yes Securities — Analyst

Ankush Agrawal — Surge Capital — Analyst

Dheeresh Pathak — White Oak Capital — Analyst

Manvardhan Datt — Laurel Advisory Services Private Limited — Analyst

V.P. Rajesh — Banyan Capital Advisors — Analyst

Mayur — Wealth Managers Private Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Tips Industries Limited Q3 FY23 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded.

I’ll now hand the conference over to Mr. Faraz Ahmed from Orient Capital. Thank you and over to you, sir.

Operator

Thank you, and welcome to the Q3 and nine-month FY23 earnings conference call of Tips Industries Limited. Today on this call, we have Mr. Kumar Taurani, Chairman and Managing Director along with Mr. Girish Taurani, Executive Director; and Mr. Sushant Dalmia, CFO. This conference call may

Contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations as of today and actual results may differ materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to

Predict.

A detailed Safe Harbor statement is already given on Page two of the company’s investor presentation, which has been uploaded on the stock exchange and the company’s website as well.

With this, I hand over the call to Mr. Kumar Taurani for his opening remarks. Over to you, sir.

Kumar Taurani — Chairman and Managing Director.

Thank you, Faraz. Good evening, friends, and welcome to the Q3 FY ’23 earnings call of Tips Industries. Our teamwork is paying off and we have been able to report a substantial increase in our revenue from operations. From the nine months FY ’23 ending December 31, 2022, our revenue was up by 33% for the quarter, revenues grew by 15%. We released 243 new songs, which is highest in any quarter so far. These include, 169 new film songs and 74 non-film songs. This quarter has seen a substantial increase in our content cost. For the nine months financial year ’23, our content cost was at least INR43.5 crores. On a year-on-year basis, it has increased by 81%. For the quarter, content cost was INR18.7 crores, up by 49% year-on-year.

Our new releases have performed very well. To put in perspective, our two songs of release crossed 55 million plus views. Our latest release by Yo Yo Honey Singh Yai Re has crossed over 35 million views along with, which is Tujhe Dekhe Meri Aankhen and Gal Ban Gayi, which has crossed over 20 million plus views.

Our subscriber numbers continue to grow on YouTube. We have now 78.6 million subscribers. And our YouTube views for Q3 2023 was — were about INR41 [Phonetic] billion, which is an increase of almost 105% in our views over the correspondence — corresponding quarter last year. We will continue to invest in quality in music to achieve our vision of becoming the number [Technical Issues] there in the industry. You may already know that we have hired, Mr. Sushant Dalmia as our CFO to strengthen our team.

Now, let me hand over the call to Mr. Sushant Dalmia to share the financial highlights of the quarter.

Sushant Dalmia — Chief Financial Officer

Thank you, sir. First, I would like to wish everybody on the call a very happy and a prosperous New Year. As you know, at Tips Industries [Technical Issues] content cost [Technical Issues] as and when it is recovered. Now, let me take you through our financial highlights. Our revenue from operations for Q3 FY ’23, stood at INR51 crores as compared to INR44.2 crores in Q3 FY ’22. That is an annual growth of 15%.

Operating EBITDA stood at INR25.9 crores for Q3 FY ’23 versus INR27.7 crores in Q3 FY ’22. So operating EBITDA margin was at 51% for this quarter. Our profit after tax for Q3 FY ’23 stood at INR20.2 crores versus INR21.5 crores in Q3 FY22, with a PAT margin of 40%.

Now for nine months ended December ’23, the revenues from operations stood at INR134.8 crores, an annual growth of 33%. Operating EBITDA stood at INR75.5 crores for nine months ended December ’23, INR65.9 crore. That is an annual growth of 15%. Our profit-after-tax for nine months ended December ’23 stood at INR58.2 crores versus INR48.6 crores last year, with a PAT margin of 43%. The decline is due to substantial increase in content cost.

With this, I would like to hand over the call to the moderator for the Q&A session.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions]. We take the first question from the line of Mr. Ravi Naredi from Naredi Investment. Please go ahead, sir.

Ravi Naredi — Naredi Investment — Analyst

Thank you very much to give me this opportunity. Sir. almost results are good. Content cost rising continuously, how we may see this. Few words need from you for this is new launch for future. That is my question.

Kumar Taurani — Chairman and Managing Director.

Actually, Mr. Ravi, we have already mentioned in our earlier meetings on music business, we need new content and as I told you earlier as well, we will — we have a fixed budget that this year we have to invest so much money in the content. So we have a revenue targets. We have a bottoming targets. And even content budget also is there. So we are accordingly working towards that and its absolutely under control.

Ravi Naredi — Naredi Investment — Analyst

Definitely under control. So what is the target for financial year ’24, our content cost.

Kumar Taurani — Chairman and Managing Director.

2024, the next year, I think our total content and marketing cost around the budget will be around INR80 crores, you can say INR85 crores to INR90 crores.

Ravi Naredi — Naredi Investment — Analyst

And sir, this content, whatever we have booked in first year because that is our tradition, how much revenue we may generate in a first year or second year?. Can you give some idea about this?

Kumar Taurani — Chairman and Managing Director.

I think we don’t have any calculation like that, but you can say whatever investment we are doing — so we by a content worth INR10 crores and maybe first year, we are recovering INR3 crores or INR3.5 crores. So I expect the balance money, I will recover in next four to five year’s time. So you can accordingly –make the calculations accordingly how much we can recover for next three, four years.

Ravi Naredi — Naredi Investment — Analyst

Okay, okay and sir, whatever digital advertising grow, at same percentage our invests grow.

Kumar Taurani — Chairman and Managing Director.

Not the same, but it’s substantial. It’s a major thing for the industry is growing, because the digital advertising and digital content is through films, web series an so many other products as well apart from music. So, exactly don’t know how much will be on the music and how much, but you can say music will be the crucial and big part of that.

Ravi Naredi — Naredi Investment — Analyst

Okay, okay and the 5G will definitely help us, right.

Kumar Taurani — Chairman and Managing Director.

Absolutely, 100%, big way.

Ravi Naredi — Naredi Investment — Analyst

Okay, thank you, thank you very much.

Operator

Thank you sir. We’ll take the next question from the line of Mr. Akshay Sam from Sam Capital. Please go ahead, sir.

Akshay Sam — Sam Capital — Analyst

Hi, Mr. Taurani. So just a few questions. Thank you for the opportunity. So, sir, in this quarter, we almost — we almost invested in 243 songs, which is almost equal to for the total year of FY22 what we are doing, right. So can we expect [Foreign Speech] — can we expect growth rates for pickup going ahead or you think would be advertising slowdown that we have seen in the industry that the growth rate will be moderate a bit as well.

Kumar Taurani — Chairman and Managing Director.

I think advertising slowing down for last two, three months is not actually affecting Tips. So we are maintaining our — because of our releases and quality releases. So. I don’t feel it will [Technical Issues]. And I think that two-three days back, I was reading an article where Hindustan Lever was telling people that businesses is back, economy is back and that they are increasing their advertising revenues this year.

So I think it will come come back to normal situation. And I feel it will grow further to big guys. So I’m not actually worried about this.

Akshay Sam — Sam Capital — Analyst

Yeah. I mean with such an increase in content cost, I mean you initially historically able to make 20%, 25% growth rate. So can we expect that to go up further because now you’re investing for the whole year — for the quarter what we used to invest in the whole year, right.

Kumar Taurani — Chairman and Managing Director.

Yeah, yeah, I always maintain. Last two to three years, I am telling this that next another two to three years I don’t see any problem. Our revenue will be up by 25% to 30% and again bottom line will be up by 15% to 20%. After having such a huge — after deducting all the content cost same year, huge content cost, we will maintain that.

Akshay Sam — Sam Capital — Analyst

So, second is more like a bookkeeping question. So say, it’s your — the movie releases six months from now and you’ve already paid advance now. So would you put advance cost in this quarter or would you put the advance costs with the entire cost when the music releases?

Kumar Taurani — Chairman and Managing Director.

In the musical releases, we rent our entire amount. I will keep this money whatever we paid as advance as advance only in books and we write-off all the amount when our first song gets released.

Akshay Sam — Sam Capital — Analyst

That advance cost you will write-off now, not when the music releases.

Kumar Taurani — Chairman and Managing Director.

Yeah, advanced cost, we don’t write off. We write off altogether.

Akshay Sam — Sam Capital — Analyst

Okay, altogether. Sir, also could you give us kind of a flavor of what we can expect in the coming year of new releases in the Telugu and some of the other. What is there, publicly we know, but other than that, anything else the kind of releases we can give in music.

Kumar Taurani — Chairman and Managing Director.

Yeah, we have quite a good releases this year. We have quite a big content in South Indian — South India, Tamil and Telugu. Plus in Hindi also, we have three-four films — making three films Merry Christmas, Ishq Vishk and [Technical Issues], three films we are going to release. And there is another two or three films, big films we’re talking with outside producers.

So we have — and also there is a re-creation of our Tips song. We have — there are so many songs in regional languages, spiritual. So that, as usual going on.

Akshay Sam — Sam Capital — Analyst

Okay, thank you sir. I will join back in the queue.

Operator

Thank you, sir. We will take the next question from the line of Mr. Ankush Agrawal from Surge Capital. Please go ahead, sir. Mr. Ankush, your line is unmuted, sir. Please go ahead with your question. Mr. Ankush, please go ahead with your question, sir. As there is no response from the current participant line, we will move onto the next question. The next question is from the line of Anika Mittal from Nvest Research. Please go ahead. Ms. Anika, your line is unmuted. Please go ahead with your question.

Taurani, sir, are you able to hear me?

Kumar Taurani — Chairman and Managing Director.

Yeah, I can hear you.

Operator

Ms. Anika. So, I am moving on to the next question as we not getting any response from the line.

Kumar Taurani — Chairman and Managing Director.

Yeah.

Operator

The next question is from the line of Devanshu Sampat from Yes Securities. Please go ahead. Sir, Devanshu, can you hear us sir? One second sir. Mr. Devanshu, can you hear me sir? Sir, Mr. Devanshu, please go ahead with your question, sir.

Anika Mittal — Nvest Research — Analyst

Yeah, can you hear me?

Operator

Yes, sir.

Devanshu Sampat — Yes Securities — Analyst

Yeah, good evening, sir. I think the other two participants also, I could hear them. So there is some issue with the line over here. Anyway. I just have two questions, sir. So can you give me a sense of the concentration of revenues from the top three or five platforms in our licensing business?

Kumar Taurani — Chairman and Managing Director.

Top three, I think there is one from the YouTube. And then there is I think then should be [Technical Issues]. And, third one will be maybe Sportify or Facebook.

Devanshu Sampat — Yes Securities — Analyst

So, including Sportify and Facebook, maybe the top-five, what is the revenue contribution from them combined if you can share that?

Kumar Taurani — Chairman and Managing Director.

Yeah, I cannot give you the [Technical Issues]. But I can tell you as usual 75% — 70% to 75% comes from digital revenue and balance 25% from other streams like the public performance or publishing TV station on that.

Devanshu Sampat — Yes Securities — Analyst

Okay, okay got. And just another question, since people have been asking about the slow down in advertising and all those things. So is there a possibility of music licensing terms changing away from minimum guarantee and fixed fees, given the state of economy and all the conditions. If that is the case, what can be the impact because I am assuming that the 20% plus growth assumptions that you are taking would take into consideration some of the hike from these numbers, right [Technical Issues] also. Can you give me a finite number?

Kumar Taurani — Chairman and Managing Director.

Actually, if you see, I don’t have a major business like that. And actually or YouTube or maybe other parties, except one or two parties, I have all the parties, a profit-sharing kind of a business. So my model is very clear. I don’t want to get any extra money like the other companies baby getting. So I am very say that way. And I don’t see any major impact will happen to such.

On the contrary, the way our content, our music [Technical Issues] is performing, think some of the platforms, I feel still to be clear. I feel I’m not performing as number two player. So I think it’s the way beyond our expectations. I think we will in the next two next two three years, I’m committing 25% to 40%. But I feel we can — we have a really potential to do much more than that, which we are trying. So lets be positive and I am very confident that better results will come.

Devanshu Sampat — Yes Securities — Analyst

As well as revenue sharing model, a lot depends on the slowdown, right because we heard Saregama call. They are saying that we are sort of in a different position because we have [Technical Issues] and we have [Technical Issues] so, we have nothing to worry about over here. What you are saying is the opposite. So potentially.

Kumar Taurani — Chairman and Managing Director.

I don’t know about them, but my my business model YouTube — I don’t think YouTube pays any anyone any MG. The MG players are new players, more or less, players who can [Technical Issues] my dealers — we were discussing our new deal with them. We don’t know where we will go about that. So but other companies like YouTube or Sportify, major companies, they are on a profit sharing business with all, not with me, all the companies. So. I don’t see and my business is increasing. On even YouTube, I see a jump. It is doing well. So, I don’t see it is affecting my business.

Devanshu Sampat — Yes Securities — Analyst

Okay, say in this quarter, are there any contracts that are not included, but are up for negotiation, there no — that is not part of your revenues.

Kumar Taurani — Chairman and Managing Director.

Two, three parties, we are negotiating and I think soon, we will let’s keep fingers crossed. I think it can be a game changer I feel.

Devanshu Sampat — Yes Securities — Analyst

So these parties are, they were never clients or they were just clients and they have.

Kumar Taurani — Chairman and Managing Director.

Yeah, some of them are never clients. Some of them are clients, but renegotiations are happening. Both case is happening.

Devanshu Sampat — Yes Securities — Analyst

Very good, okay, understood. Thank you, and all the best. Thank you.

Kumar Taurani — Chairman and Managing Director.

Yeah.

Operator

Thank you sir. We’ll take the next question from the line of Mr. Ankush Agrawal from Surge Capital. Please go ahead.

Ankush Agrawal — Surge Capital — Analyst

I believe I’m audible now right?

Operator

Yes, sir.

Ankush Agrawal — Surge Capital — Analyst

Yeah, Taurani Ji, first question is, if I see quarter two and quarter three, our revenues are flat. But typically our quarter three is the biggest quarter for us, right. And this quarer, [Foreign Speech] why this is flat quarter-on-quarter.

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech]. so, please analyze us on a yearly basis. [Foreign Speech]. I think we are behind on target that way.

Ankush Agrawal — Surge Capital — Analyst

Taurani sir, [Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech].

Ankush Agrawal — Surge Capital — Analyst

[Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech] we booked at the same month because of GST and because of all of those, the tax, TDS and all that. [Foreign Speech].

Ankush Agrawal — Surge Capital — Analyst

Annual deal [Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech], we book in the same quarter.

Ankush Agrawal — Surge Capital — Analyst

[Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech] please understand [Foreign Speech] and because of that, there are major implications of GST. I have to give in the proforma invoice [Foreign Speech], but it’s not happening. So, we will do this. We book the same month. [Foreign Speech] we always say please analyze our performance on a yearly basis.

Ankush Agrawal — Surge Capital — Analyst

[Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech].

Ankush Agrawal — Surge Capital — Analyst

[Foreign Speech] Okay, Thank you.

Operator

[Operator Instructions]. We take the next question from the line of Anika Mittal from Nvest Research. Please go ahead.

Anika Mittal — Nvest Research — Analyst

Hello, am I audible now?

Kumar Taurani — Chairman and Managing Director.

Yeah.

Anika Mittal — Nvest Research — Analyst

Okay, so sir, very good evening. And my question is on the basically layoff side. Actually, we are seeing the layoff and cost cutting from the organization and the cutting in the advertisement cost as well due to the rising inflation. And OTT spending by the players like Netflix, [Technical Issues] lower-than-expected subscription, those likely to impact our revenues as well So, if that is the case, do we have any alternative revenue streams to compensate the advertisement from because advertisement YouTube has a major impact on revenue sir.

Kumar Taurani — Chairman and Managing Director.

So maybe what you’re talking is for such a huge organizations where they have 100,000, 200,00 employees. They are cutting down 1,200. We are not such a huge organization. We have only 60 people and very controlled organization.

Anika Mittal — Nvest Research — Analyst

No, no, I’m not talking about your organization. I’m talking about, basically on the digital ad spends and the capex by the end players, OTT players like Netflix. If they are cutting down their cost, what kind of impact do we see on our revenue.

Kumar Taurani — Chairman and Managing Director.

Yes, yes, I’m coming to that. So, Netflix is a film company and we don’t have any dealings with them. Maybe operationally, they — whatever series comes on their shows on their platform, they take some — if they want the music rights, so they take rights from us. They also pay us money. So, we don’t have any major dealing with Netflix. But we do have a major dealing with YouTube. But YouTube, we are even going month-on-month basis even on compared to last year, this year, we are on target. Whatever we budgeted that this much money will come from YouTube, we are achieving that target. So, I don’t see any problem and this thing happened — every two-three years, there is some dull months come and but — and then again it’s picks up. So, I think it’s a temporary phase and it’s not even temporary basis, it is not effecting Tips. So, I’m actually not concerned very much. But and still there is so many other platforms and other deals are going in place. So I feel that this whatever I’m committing this 25%, 30%. it’s easy to achieve. So and we are touchwood achieving so-far. So there is no complaints about that.

Anika Mittal — Nvest Research — Analyst

It means you are confident about the 25%. 30% year-on-year growth, right.

Kumar Taurani — Chairman and Managing Director.

Absolutely, absolutely.

Anika Mittal — Nvest Research — Analyst

Okay, that’s all from me. Thank you.

Operator

Thank you sir. We’ll take the next question is from the line of Mr. Dheeresh Pathak from White Oak Capital. Please go ahead.

Dheeresh Pathak — White Oak Capital — Analyst

Yeah. Thank you. Sir, this — hello, am I audible?

Kumar Taurani — Chairman and Managing Director.

Yeah, yeah.

Dheeresh Pathak — White Oak Capital — Analyst

Okay, in the presentation, you showed content cost, let’s say, nine months, it is INR45 crores, full year like y INR60, so just to get a sense, sir. On an average, how much new content is available for bidding in any year in terms of value in crores.

Kumar Taurani — Chairman and Managing Director.

See, actually, there is INR800 crores, INR900 crores of content all India is being produced. Maybe. because of competition, the cost will be go another INR100 crores, maybe say INR1,000 crores. In INR1,000 crores, INR50 odd crores is not a big thing for us and we are not in this bidding game. Other players may be doing that. So we really pinpoint one off any full event, then we go to talk to that producer and [Technical Issues] don’t bid for it. If you are interested and we are interested, that’s it and across in first meeting, we will close the deal.

Dheeresh Pathak — White Oak Capital — Analyst

Okay, okay, so our –You take both the right, you take master right, as well as publishing rights.

Kumar Taurani — Chairman and Managing Director.

Yes, absolutely, total rights.

Dheeresh Pathak — White Oak Capital — Analyst

And video — video rights of that –that also.

Kumar Taurani — Chairman and Managing Director.

Yes, yes, yes, it’s a common practice. Everybody takes that rights.

Dheeresh Pathak — White Oak Capital — Analyst

Okay, the cost that you charge to the P&L, the content cost, that shows up in other expense in the annual report, right.

Kumar Taurani — Chairman and Managing Director.

Yeah.

Dheeresh Pathak — White Oak Capital — Analyst

Where –there is this advertisement and promotion and then there is music acquisitions. So both combined together, is this INR30 crores you’ve shown in last year include add expense also, right, in the presentation.

Kumar Taurani — Chairman and Managing Director.

Yeah.

Dheeresh Pathak — White Oak Capital — Analyst

There is no royalty item. Some companies have a royalty line item. We don’t want have royalty item.

Kumar Taurani — Chairman and Managing Director.

Whatever content we buy, we buy all content outright basis. We don’t that we pay you later royalty and charges less and we keep on paying royalty. We don’t do those kind of things from beginning. This practice, we follow from 1988. It’s lump sum deal. 100% ownership will be transferred TIps, And we pay one-time fee, that’s it. And we charge that in our balance sheet same quarter.

Dheeresh Pathak — White Oak Capital — Analyst

Okay, okay, but if you take the publishing right, you’re supposed to give the lyricists and the composers certain amount of money [Technical Issues].

Kumar Taurani — Chairman and Managing Director.

Yes, that is the law of the land and we monetize that right through IPRS. There is a society for that, and they collect all the moneys from various platforms and they give us 50% and they 50% directly distribute to the artist.

Dheeresh Pathak — White Oak Capital — Analyst

So, you [Technical Issues] your portion, so you do not have to [Speech Overlap].

Kumar Taurani — Chairman and Managing Director.

Yes.

Dheeresh Pathak — White Oak Capital — Analyst

This ability to acquire rights in perpetuity without any royalty, this thing in Bollywood — I do not think present. Bollywood, typically deal our royalties.

Kumar Taurani — Chairman and Managing Director.

No, no, except one or two companies, everybody acquires music right lumpsum basis.

Dheeresh Pathak — White Oak Capital — Analyst

It’s not that the big banners, let’s say, Karan Johar, and the people who are bigshots, they want royalties. They will not do perpetual deals.

Kumar Taurani — Chairman and Managing Director.

Maybe they also have a different, different deals with different companies. Maybe with one company, they are doing royalty, maybe another company, they do outright lumpsum deals. So all those things are negotiation and deal to deal basis.

Dheeresh Pathak — White Oak Capital — Analyst

Okay, okay. One customer would be what percentage of the revenue, if you can share.

Kumar Taurani — Chairman and Managing Director.

One customer, I didn’t understand that.

Dheeresh Pathak — White Oak Capital — Analyst

The largest customer, [Technical Issues] typically company has to distribute, right. Largest customer is so much percentage of revenue. [Speech Overlap].

Kumar Taurani — Chairman and Managing Director.

Basically, it’s for all the industry worldwide is YouTube. Our big customer is YouTube. And YouTube becomes around you can say from 40% to 55% YouTube contribution any music business, you can say.

Dheeresh Pathak — White Oak Capital — Analyst

So the monetization.

Operator

Sorry to interrupt you, Mr. Pathak, may we request you to join the question queue, as we have participants waiting for their turn. Thank you.

Dheeresh Pathak — White Oak Capital — Analyst

I will, thank you.

Operator

We’ll take the next question from the line of Mr. Manvardhan Datt [Phonetic] from Laurel Advisory Services Private Limited. Please go ahead, sir.

Manvardhan Datt — Laurel Advisory Services Private Limited — Analyst

Thank you for this opportunity. Most of my doubts have been clear. Just wanted to understand, it was our observation that given the volume of content that Tip puts up versus the hits [Technical Issues] especially on YouTube, it does much better than most other competitors. So just wanted to understand the approach and how are we managing to do that and sort of is there a focus on particular languages [Foreign Speech].

Kumar Taurani — Chairman and Managing Director.

See, we have experienced people working for us. Plus, we also have our own experience for last — w are doing this business –, I’m doing this business for last 44 years, 45 years. And even my son or [Indecipherable] or other guys Pravin, Kaushal, Kavitha, and so many other people we have in [Technical Issues] business. So everybody is in this business for five years, 10 years, 20 years. So, there, good experience of this music.

So and we try to at least or 70%, 80% of the major major source, we all listen to those songs. And actually if you see, we don’t have much work to do. We have only these 40, 50 customers. And if we do a deal for two-two years also, we have to sign just 25, 30 contracts a year. So our major time goes into creation of content and that’s our main game. Creation of content is the big thing in any music business. So our focus is there.

So we try that how much is possible, we should have a very good quality content, which can last long. [Foreign Speech]. So it’s really some new learnings also. So this is actually basically experience of that.

Manvardhan Datt — Laurel Advisory Services Private Limited — Analyst

Okay. Sir, YouTube algorithms [Foreign Speech]

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech]. YouTube, touchwood, we are really doing well. [Foreign Speech]. We have a really second to second control on that.

Manvardhan Datt — Laurel Advisory Services Private Limited — Analyst

Great sir, fantastic. Thank you sir. Thank you.

Operator

[Operator Instructions], We take the next question from the line of Mr. V.P. Rajesh from Banyan Capital Advisors. Please go ahead, sir.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Hi, thanks for the opportunity. Few questions as I’ve — as most of my other questions have been answered. So first one, in terms of your content acquisition, you are saying that you also create content. So out of this INR45 crores, how much was your own content versus the content you got from third party.

Kumar Taurani — Chairman and Managing Director.

I think in this INR40 crores, major will be acquired because this year, in nine months we have released two big films, Freddy and this one PS1. So you can say around 60%, we acquired and 40%,we have created in-house you can see that.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Out of this INR45 crore figure, right.

Kumar Taurani — Chairman and Managing Director.

Yeah, yeah, approximately I am telling you. This will be the figure.

V.P. Rajesh — Banyan Capital Advisors — Analyst

And out of that 40%, how much is coming from TIps films or the films.

Kumar Taurani — Chairman and Managing Director.

Tips films has not given us any film till now. Those films will come this year, this maybe one film, we release in February, music-wise, February or March. And then — two, three, four films will come next year.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Okay, sir, if you look at your entire [Indecipherable], what would you say you, percentage home homegrown [Indecipherable] yourself versus acquired in a period of time, like how would you bifurcate that.

Kumar Taurani — Chairman and Managing Director.

You’re asking for this year or for long, long-time, you are asking.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Long-time because I’m just trying to as you said like lot of the content of this quarter was acquired. So I’m just trying to understand over a longer period of time, I think that’s what it looks like.

Kumar Taurani — Chairman and Managing Director.

I think we have 500 film music right in totality and I think among that, we have our own production movies, 35 or 38 films original and there is another 10, 12 movies dubbed in — Punjabi film dubbed into Hindi or Hindi film dubbed into Tamil and Telugu. So, you can estimate around 8% around 7%, 8% created by own and balance acquired outside I would say. Overall, I’m telling you [Technical Issues] 30 of them so far.

V.P. Rajesh — Banyan Capital Advisors — Analyst

So now are you seeing that your own content creation percentage is increasing from this longtime 8% to 10%, is that the way to understand metric.

Kumar Taurani — Chairman and Managing Director.

Earlier it used to be a huge film market music and that time music cost was not the way what we are paying now, content costs and earlier it was whatever we invested in music rights, we used to recover all the money — whatever invested in three to six month’s time or maybe one year-one year. But now recovery is really par par. So we have the mix that properly that if we are creating non-film, our own content, that costs us less. And films, whatever we are acquiring, it’s really expensive to acquire. So because of that, we do a mixed non-film music, re-creation of our old songs and then some film music, we have. We do have a proper mix so, it cannot be really expensive. That’s why we do that.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Right. So are we right, non-film content that is [Technical Issues] that percentage is increasing over time so that you don’t have to pay third parties. That’s what you are telling.

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech].

V.P. Rajesh — Banyan Capital Advisors — Analyst

[Foreign Speech] sorry, yes you’re right. What I mean is that what you have produced yourself [Technical Issues] production itself. And then the last question, so what is your arrangement with TIps films now that you have two separate companies. We have appointed a separate valuer that will tell us how we do arm’s-length kind of business between Tips films and Tips music. [Foreign Speech] we don’t want to pay more. We don’t want to pay less. What is the –and they also won’t sell us or they won’t want or we will not allow them to get more money from us. So, we have appointed a valuer [Foreign Speech] And then that valuation, whenever the valuer will be ready, we will talk to our auditors and auditors will finalize it and then we will send them to board and they will give us green signal and then we will finalize.

Kumar Taurani — Chairman and Managing Director.

But you have the exclusivity on all the releases that have been produced with respect to [Indecipherable]. [Foreign Speech] shareholders we say, we are ready to pay market price and. And actually, [Foreign Speech] because it’s you can say [Foreign Speech]compared to other people. So we shouldn’t tell them to [Foreign Speech].

V.P. Rajesh — Banyan Capital Advisors — Analyst

Got it, thank you so much. That’s all I have.

Operator

Thank you sir. We’ll take the next question from the line of Mr. Mayur from Wealth Managers Private Limited. Please go ahead, sir.

Mayur — Wealth Managers Private Limited — Analyst

Good evening, sir. Thank you for taking. am I audible?.

Kumar Taurani — Chairman and Managing Director.

Yeah, yeah.

Mayur — Wealth Managers Private Limited — Analyst

[Foreign Speech] in industry also we don’t disclose subscription revenue, advertisement revenue [Foreign Speech]. Can we index it, can we say [Foreign Speech]if that was 100, how much the subscription revenue has grown in this period related to the overall revenue. [Foreign Speech] because of the lack of information. [Foreign Speech] subscription revenue in general is improving, not improving in certain quarter or [Foreign Speech] Justice a suggestion.

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech] subscription [Foreign Speech] is less than 5% subscription, 95% even today add revenue base. [Foreign Speech] nothing is free in this world. [Foreign Speech]. So nothing is free and we don’t allow to [Foreign Speech] our content is not available. We are not here to do [Foreign Speech].

Mayur — Wealth Managers Private Limited — Analyst

[Foreign Speech] just the overall trend [Foreign Speech]

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech] I’m not committing but let us see. I will explore with my team. We will see this.

Mayur — Wealth Managers Private Limited — Analyst

Sir, [Foreign Speech] content acquisition also, as well as we say that [Foreign Speech] I understand this, but hits also play an important role. Sir, let’s say, just as an example [Foreign Speech] I’m not this quarter, I’m saying, but let’s say [Foreign Speech], March to September quarter, we released almost 400 songs. Of 400 songs [Foreign Speech]. So I know [Foreign Speech], but as on today, how [Foreign Speech] how do we understand this portion [Foreign Speech]

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech] I should be happy. [Foreign Speech] 70% to 80% [Foreign Speech].

Mayur — Wealth Managers Private Limited — Analyst

[Foreign Speech] it is based on the revenue which we earn and not based on views.

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech].

Mayur — Wealth Managers Private Limited — Analyst

[Foreign Speech]. Overall, so number one — the number sorry [Foreign Speech]

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech]

Mayur — Wealth Managers Private Limited — Analyst

Sir, last question. [Foreign Speech] just but I’m trying to read what [Foreign Speech] I’m just trying to clarify, so we are saying 20% to 30% growth. If you look at FY23 [Foreign Speech], if we wants to grow at 30%, so next quarter Q4 will either be flat or it can be negative, is this right reading or we are saying FY23 should be actually much more than that because [Foreign Speech] I’m reading in between the lines. Just trying to understand. Clarify sir.

Kumar Taurani — Chairman and Managing Director.

So again it’s depending upon the deeds [Foreign Speech] 175 should be my target this year, right, [Foreign Speech] again, I told you, depending upon deal to deal [Foreign Speech] we are very safe this year as we are very closer to that.

Mayur — Wealth Managers Private Limited — Analyst

Right, right, right.. Thank. [Foreign Speech] broadly [Foreign Speech]

Kumar Taurani — Chairman and Managing Director.

[Foreign Speech].

Mayur — Wealth Managers Private Limited — Analyst

Sir, P&L [Foreign Speech] INR85 crores. Okay, okay. sir, thank you. [Technical Issues]

Operator

Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. Kumar Taurani for closing comments. Thank you and over to you sir.

Kumar Taurani — Chairman and Managing Director.

Thank you so much. Please keep faith in us. We are really working very hard and we promised that 25%, 30% or 15%. 20% bottom-line [Foreign Speech] yeah, this is profitable for the company, we will take that kind of steps. [Foreign Speech] We are careful of our business and plus [Foreign Speech] maybe this year or maybe next two to three years [Foreign Speech] 60%, 70%[Foreign Speech]. [Foreign Speech] subscription, short content [Foreign Speech] We will see one big jump will be there. [Foreign Speech]. That is my hppe and we are all working towards that. Thank you. Thank you so much. Thank you. [Operator Closing Remarks]