Earnings Call Transcript Analysis Report #
Financial Performance #
Key Financial Metrics #
- Q4 FY25 Revenue from Operations: ₹204 crores (approx. 3% YoY growth).
- Q4 FY25 EBITDA: ₹2.4 crores.
- Q4 FY25 Net Loss: ₹5 crores (approx.).
- FY25 Revenue from Operations: ₹685 crores (approx. 3% YoY decline).
- FY25 EBITDA Loss: ₹80 crores.
- FY25 Net Loss: ₹85 crores (approx.).
- Expenses on New Initiatives:
- Q4 FY25: ₹15 crores (approx.).
- FY25: ₹51 crores (approx.).
- Adjusted EBITDA (after adjusting for new initiative investments):
- Q4 FY25: ₹17 crores (approx.).
- FY25 (Adjusted EBITDA Loss): ₹29 crores (approx.).
- Accelerated Inventory Charge-offs:
- A significant factor impacting margins and profitability.
- FY25 accelerated charge-off: “between Rs. 150 crores to Rs. 160 crores.”
- Digital Media Revenues:
- Q4 FY25: ₹57 crores (approx. 1.25% YoY growth).
- FY25: ₹252 crores (approx. 11% YoY growth).
- Traditional Media Revenues:
- Q4 FY25: ₹148 crores (approx. 3.3% YoY growth).
- FY25: ₹433 crores (approx. 9.69% YoY decline).
- Debt Reduction: Reduced by ₹37 crores in FY25.
Revised Guidance or Forecasts #
- Debt Reduction: On track to reduce debt by ₹100 crores in two years (FY25 & FY26), implying a target of ~₹63 crores reduction in FY26. However, this is subject to re-evaluation.
- Accelerated Inventory Charge-offs: Expected to continue in FY26 at a similar rate as FY25, with FY26 being the last year for this accelerated process.
Areas of Growth or Decline #
- Growth: Digital media revenue (FY25: +11% YoY). Positive EBITDA in Q4 FY25 after six quarters.
- Decline: Overall revenue (FY25: -3% YoY), Traditional media revenue (FY25: -9.69% YoY), primarily due to TV syndication business. Significant EBITDA and Net Loss for FY25, heavily impacted by inventory charge-offs and new initiative investments.
Strategic Initiatives & Business Updates #
Major Strategic Announcements #
- Accelerated Inventory Charge-offs: A strategic initiative started five quarters ago, significantly impacting current profitability but aimed at cleaning the books. FY26 will be the last year of this accelerated process.
- Acquisition of Aikyam: To gain end-to-end control of broadcast licenses for ShemarooTV, Shemaroo Umang, and Shemaroo Marathi Bana, fortifying the business and offering nominal cost savings.
- Focus on Balance Sheet Strengthening & Operational Efficiency: Key focus for the next fiscal year.
New Products, Services, or Markets Discussed #
- ShemarooMe Gujarati: Released 13 new titles in Q4 FY25 (movies, web series, plays), including digital world premieres and original web series.
- YouTube: Shemaroo FilmiGaane crossed 71 million subscribers; over 10.5 billion views across portfolio channels in Q4 FY25.
- Broadcasting: Two original shows released in Q4 (Bade Haveli Ki Choti Thakurain, Jamuniya).
- Deiveegam (Tamil Devotional Service): Launched as a paid subscription service with Tata Play (DTH platform), not a standalone channel.
Significant Operational Changes #
- Cost Rationalization Measures & Investment Strategy Realignment: Being undertaken in response to market dynamics, particularly the return of major GECs to Free Dish.
- No New Channel Launches Planned: Due to market changes with “big four GECs” entering Free Dish.
Ongoing or Completed Projects #
- Channel Breakeven Status: One channel broke even ~1.5 years ago, another is near breakeven. Shemaroo Umang is the primary channel requiring substantial investment. Chumbak TV has not broken even but shows a positive outlook.
Market & Competitive Landscape #
Insights about Industry Trends #
- Consolidation in Broadcasting: Negatively impacted Shemaroo’s TV syndication business.
- Subdued Advertising Outlook: Expected in the near term due to macroeconomic pressures, geopolitical tensions, and major sporting events (IPL), particularly for non-sports categories.
- Return of Major Broadcasters (GECs) to Free Dish Platform: Expected to affect viewership across categories and lead to redistribution of advertising spends.
- Direct-to-Mobile (D2M) Technology: Viewed as a potential new distribution mechanism for existing apps/content rather than a standalone revenue model changer for Shemaroo.
Competitive Positioning Statements #
- Actively monitoring market impacts and realigning investment strategy.
- Chumbak TV is one of the few channels not impacted by the entry of big four broadcasters on Free Dish.
Market Challenges or Opportunities Mentioned #
- Challenges: Subdued ad environment, increased competition on Free Dish, decline in TV syndication.
- Opportunities: Growth in digital media, potential for B2B licensing business to recover in FY26. Positive outlook for Chumbak TV.
Comments about Market Share or Positioning #
- Broadcasting GEC channels have a viewership share of around 8.2% in the overall Hindi GEC genre.
Risk Factors & Challenges #
Concerns or Challenges Acknowledged by Management #
- Margin Pressure: Expected to continue due to ongoing accelerated inventory charge-offs.
- Decline in TV Syndication Business: Significant impact on FY25 topline due to industry consolidation.
- Challenging Advertising Environment: Near-term outlook remains subdued.
- Impact of Major GECs on Free Dish: Affecting viewership and ad spends, requiring strategic realignment.
Regulatory Issues Mentioned #
- US Tariff on Films: Management believes it is unlikely to have a major impact on Shemaroo, as it’s likely aimed at US-produced films shot abroad or new releases, not catalog content or foreign films in general. Industry bodies are examining and preparing representations.
Supply Chain or Operational Constraints #
- Not explicitly detailed as supply chain issues, but the TV syndication decline due to industry consolidation represents an operational constraint on a key revenue stream.
Statements about Market Uncertainties #
- Overall advertising outlook