Average set of numbers, digital revenues doing well but traditional revenues again hit. Here are my notes from their concall.
Expenditure on new ventures was ~20cr. in this quarter (up from earlier levels of 16cr.). Expenditure will depend on cash being generated from core business rather than borrowings
Digital revenue breakup (47.6 cr.):
o Youtube: ~66% (~31 cr.)
o Telco <10% (~4 cr.)
o Syndication & ShemarooMe: remainder
o Got into a strategic tieup with spotify for Bhagvad Gita podcast
Confident of breaking even in the two TV channels in FY23
Debt is 248 cr., inventory has come down to 700 cr.
Ranking and ratings of MarathiBana has remained stagnant due to launch of new peer (Sun Marathi). 4 marathi channels in the free domain
Shemaroo TV has got more traction
9MFY22: Advertising led business has grown faster than industry (35%+) but subscription based business has degrown significantly. Syndication business has shown minor growth
ESOP approval has been taken to attract new talent
Continuously invests into new initiatives, like launched dubbed Korean content on TV
What’s impressive that are able fund their OTT business through internal accruals. Other business are firing all cylinders to fund such consistent investment.
What’s stops Shemaroo from producing series for Netflix and all (similar to Tips industry). I just don’t get why management wants to compete with all biggies (OTT)
Why don’t just produce content publish it every where.
Still find it to be very undervalued company
4 channels (sony pal ,star parvah etc) has withdrawn from dd free dish , as per some articles on internet they were getting around 1000 crore of revenue from advertisement , (can some pie shifts to Shemaroo tv?) , Also some news of new Shemaroo channel soon to be on air on dd free dish
Average set of numbers again, key highlight was launch of new TV channel in Hindi GEC space to take advantage of withdrawal of 4 channels from FTA space. Notes below.
Expenditure on new ventures was 14.1 cr. in this quarter and 67.3 cr. in FY22. Expect this to be ~50 cr. in FY23. Although, in Q1 this will be higher due to launch of Shemaroo Umang
Digital revenue breakup (47.1 cr.):
o Youtube: 50-60% (24-28 cr.)
o Telco <10% (5 cr.)
o Syndication & ShemarooMe (remainder): 14-18 cr.
Confident of breaking even in the two TV channels in FY23
Debt is 248 cr., inventory has gone up to 715 cr. (from 700 cr. in last quarter)
Shemaroo TV viewership has doubled in last 9-10 months, this generally leads to revenue traction with a certain lag. Shemaroo TV is positioned towards male target audience (crime shows, etc.)
Launched third satellite Free-to-Air channel (FTC) named ‘Shemaroo Umang’ in April 2022 in Hindi GEC space (slightly different from Shemaroo TV as Shemaroo Umang is positioned towards female audience, drama shows). This was on back of exit of 4 major GEC channels from FTA space. In FTA space, there is 2’500-3’000 cr. advertising pie (the 4 GEC channels were accounting for 1/3rd of this). Tactically, it made sense to launch at this point of time as DD free dish auctions happen only once a year
Competitive market dynamics in MarathiBana? Currently there are 5 Marathi movie channels (3 from Zee) and 6th one will be launched soon. In free-to-air, there are 4 Marathi channels out of which Shemaroo is one (1 is GEC rest 3 are movie channels). Of the total advertising pie, management thinks that 20% of this would be going to FTA channels
Currently, Shemaroo TV (Hindi GEC channel) is doing better than MarathiBana
Expecting challenging quarters from advertisers in FMCG and auto industries in next 2-3 quarters
Traditional Syndication: Back to 60-70% of FY20 levels. It will not go back to earlier levels because of management’s focus away from this business line. A lot of content which was earlier syndicated is now used exclusively for own B2C initiatives
Expect ROEs to come back to 15%+ levels in 2-years
Disclosure: Invested (position size here, no transactions in last-30 days)
Another average set of numbers from the company, company is finding it hard to go beyond 100 cr. of quarterly revenues. Key highlight for me was that their broadcasting business will breakeven this quarter.
Expenditure on new ventures was 14.4 cr. (vs 14.1 cr. in FY22Q4) in this quarter. Expect this to be ~50 cr. in FY23. Will break even on TV broadcasting business (Marathi Bana, Shemaroo TV) by end of current quarter
Digital revenue breakup (48.1 cr.):
o Youtube: >60% (29 cr.+ vs 24-28 cr. in Q4FY22)
o Telco <10% (4.8 cr. vs 5 cr. in Q4FY22)
o Syndication & ShemarooMe (remainder): 14 cr. (vs 14-18 cr. in Q4FY22)
o Confident of growing this business line by 20% CAGR in next 2-3 years
Debt is 268 cr. (vs 248 cr.), inventory has gone up to 719 cr. (vs 715 cr.)
Shemaroo Umang started at #2 ratings and monetization has started in July 2022
Shemaroo TV ratings have increased by 70% from bottom reached 10-11 months back, advertising revenue comes with a 6-8 weeks lag
Shemaroo Marathi Bana: channel number was changed due to technical changes and Shemaroo lost 70-75% reach because of that + Star launched a Marathi movie channel. Shemaroo brought in episodic content to increase viewership. Surpassed earlier viewership numbers because of that (revenue should follow with a 6-8 week lag). Experimented with devotion content which delivered very good nos, then followed it with devotional serials (Ramayan dubbed in Marathi), and now trying general serials
ShemarooMe Gujarati has played out very well and company has captured a very large mindshare
Advertising pie: GEC (7’000 - 8’000 cr.), Marathi (900 - 1’100 cr.). From the three TV channels, combined revenue potential of 300+ cr. is possible in next 2-3 years
Launched telugu services in USA; tied up with a large telugu partner in India, used own marketing team in USA, currently free for trial until 15th August
In traditional media, syndication was a smaller contributor and most contribution came from broadcasting business
Performance linked incentive is paid in Q3, so that quarter will always have higher employee costs
Have not written off any inventory excluding the normal charging of inventory. Working on a new inventory policy as they now have newer revenue streams, nothing is finalized yet
Receivables are around 60 days
Disclosure: Invested (position size here, no transactions in last-30 days)
Have been going through the thread and unable to understand why the stock declined after 2018 peak so dramatically and in a way fashion.If someone could help me understand, seems like content can be made more freely with covid restrictions gone and with B2C pivot can be good for the long haul.
Not invested studying for now.
Big jump in the revenue both YoY & QoQ. Operating profit also increased considerably in percentage terms.
Can’t able to make as to why the sudden jumps in exependitures in 2nd quarter of this financial and last financial year. Is it because of company charging capital expenditure in P&L to avoid taxes? If so, then it seems to be bumper results.
There are 2 major conerns. Inventory continues to the tune of Rs 700 Cr. Although, management gievs explanation in every concall, but still it is not clear to me. Second is hugh increase in receivables.
Disclosure: Invested, No transaction in last 30 days.
Reasonable set of nos, growth seems to be coming back which has increased working capital (thus short term debt). Concall notes below.
Expenditure on new ventures was 16 cr. in this quarter (H1 expense ~ 31 cr.)
Contribution of B2C revenues in total revenues has doubled in H1FY23 (vs H1FY22)
Shemaroo TV delivered higher rating versus previous quarter. Shemaroo TV and Shemaroo Umang have consistently being amongst top 5 channels in the FTA GEC genre
On track to operationally breakeven in H2FY23 for TV channel portfolio
Launched free ad supported streaming TV channel called fast channel on Plex platform in USA, had music licensing partnership with Resso in India and partnered with Seracle web 3.0 to build own NFT market place
Increase in receivables is due to higher broadcast revenues (follows 90 days receivable). Broadcasting receivables are much lower vs syndication
Due to increase in working capital, debt has increased. Additionally, there was debt taken for purchasing a property. Interest cost will be 7.5-8 cr. per quarter
TV ad rates follow ratings and since ratings are improving, ad rates are also improving
Digital revenue breakup (64 cr.):
o Youtube: >60% (38 cr.+). Global slowdown has caused some slowdown in YouTube revenue pay.
o Telco <10% (<6 cr.)
o Syndication & ShemarooMe (remainder): 20 cr.
Disclosure: Invested (position size here, no transactions in last-30 days)
There was a good ramp up in revenues, but higher expenditure on business development meant bad profitability. It was interesting to notice that their Hindi GEC viewership share rose to 10%, given they had only started the broadcasting business in 2020. Notes from call below.
FY23Q3
Expenditure on new ventures was 22 cr. in this quarter (9M expense ~ 53 cr.). This is higher than projected 50 cr. for the entire year because they got the opportunity to ramp up market share in Hindi GEC channels from 6-7% to 10%. Additionally, advertisement was muted which resulted in shortfall of revenues corresponding to costs incurred. Advertisement is expected to be muted in the near term
Contribution of B2C revenues in total revenues has doubled in 9M FY23 (vs 9M FY22)
Shemaroo GEC channels have 10% of Hindi GEC viewership with Shemaroo TV and Umang being amongst the top 3 in FTA GEC channels
Borrowings stayed same as H1FY23, higher finance cost is due to higher interest rate
Inventory has come down to 697 cr. (from 701 cr. in H1FY23)
Disclosure: Invested (position size here, no transactions in last-30 days)
Very good rampup in sales, with co reporting highest quarterly sales. Profitability is still elusive, and will likely remain elusive in the foreseeable future. Concall notes below
FY23Q4
Expenditure on new ventures was 1.1 cr. in this quarter (FY23 expense ~ 54 cr.). This is slightly higher than projected 50 cr. for the entire year. This will increase to 75 cr. in FY24 (will be front ended like in FY23) and will be funded via internal accruals
Focus for FY24 will be on free cashflow generation to reduce debt. Idea is to operate at a much larger scale with same inventory
Contribution of B2C revenues in total revenues has doubled in FY23 (FY22)
Higher revenues this quarter is partly due to ramp up of advertising in TV channels + syndication deals
Advertising demand will remain muted in Q1FY24, this coupled with continued investments in B2C initiatives will keep margins under pressure
Shemaroo GEC channels have 9% of Hindi GEC viewership (reduced from 10%) with Shemaroo TV and Umang being amongst the top 5 in FTA GEC channels (was earlier in top 3)
Broadcasting business is lower margin vs syndication but more capital efficient. Receivable cycle is around 90 days in broadcasting
Planning to launch more TV channels
Inventory has increased to 735 cr. (from 701 cr. in H1FY23 and 715 cr. in FY22). Inventory is near peak
ShemarooME has taken a poll position in Gujarati segment
In last 3 years, have invested 175 cr. in new initiatives out of which 143 cr. was invested from internal accruals. This internal accrual was generated out of the 700 cr. inventory, so inventory is getting monetized
PPE increased from 21.5 cr. to 35 cr.
Have hired a number of industry people across profiles
-
Digital revenue breakup (53.3 cr.):
o
Ad rates have been impacted by lower spends from newer companies due to funding winter
o
Youtube + Facebook: 50-60% (26-32 cr.). Views and monetization has been impacted recently
o
Telco: 10% (5 cr.)
o
Syndication & ShemarooMe (remainder): 16-22 cr.
Disclosure: Invested (position size, no transactions in last-30 days)
Another good quarter in terms of sales, margins will continue to remain elusive for the foreseeable future. Concall notes below
FY24Q1
Expenditure on new ventures was 12.5 cr. in this quarter (vs 14.4 cr. in Q1FY23)
Traditional and digital platforms experiencing decline in viewership due to availability of IPL for free on digital along with record viewership on linear television
Shemaroo GEC channels have 7% of Hindi GEC viewership (reduced from 9%)
Launched forth TV channel ‘Chumbak TV’ in May 2023 where monetization commenced in July 2023
Current focus is on scalability and gaining market share and not so much on margins. Broadcasting is a high operating leverage business and there will be good margins available at scale
Advertising demand will remain muted in Q2FY24, this coupled with continued investments in B2C initiatives will keep margins under pressure
Debt has peaked and is expected to reduce in FY24
Debt: 341 cr. vs 313 cr. in March 2023
Inventory: 723 cr. vs 735 cr. in March 2023
Have invested significantly on employee front, with very senior hiring. Employee costs should increase to 115-120 cr. in FY24 (vs 85 cr. in FY23)
Digital revenue breakup (57.5 cr.):
Youtube + Facebook > 60% (34.5 cr.+)
Telco: 10% (5.7 cr.)
Syndication & ShemarooMe (remainder): 17 cr.
Disclosure: Invested (position size here, no transactions in last-30 days)
Another very good quarter in terms of sales growth, no improvement in margins and management is clear that margins wont revive in next 4-5 quarters (atleast). I find it impressive that they have spent 225 cr. in last 3.5 years to pivot from B2B to a B2C model, and have somehow not blown up (yet). Concall notes below.
FY24Q2
Expenditure on new ventures was 30.1 cr. in this quarter (vs 16 cr. in Q2FY23). These will keep margins under pressure
Invested 225 cr. in last 3.5 years on B2C
Shemaroo GEC channels have 7.4% of Hindi GEC viewership (vs 7% in FY24Q1)
Advertising demand remains subdued due to sluggish consumer sentiment, slowdown in new age startup funding, and world cup taking up a large part of ad pie
TV opportunity
o Will take atleast 4-5 quarters to become cashflow positive
o Very high operating leverage
o Lower working capital cycle than syndication
o Tier 2 GEC channels that are well established for 8-10 years do 400-800 cr. annual revenue with EBITDA margins of 25-50%
Launched OTT in Indonesia via Excel
GST case: related to ITC for FY18-20, deposited 12 cr. under protest (not expensed, but put under advance paid to government)
Launched new DTH service (Bollywood Masala) with Bollywood 90s movies on Tata Play in September 2023 (finally something where they can use own library)
Debt: 324 cr. (vs 341 cr. in June 2023 & 313 cr. in March 2023)
Inventory: 738 cr. (vs 723 cr. in June 2023 & 735 cr. in March 2023)
Digital revenue breakup (62.5 cr. down 2% YOY):
o Growth rates of 20-25% is a thing of the past
o Youtube is a bit under pressure due to lower views on the platform (change in preference to shorter form videos)
Disclosure: Invested (position size here, no transactions in last-30 days)
