Shemaroo Entertainment

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)

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