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)