HTMEDIA - HT Media Ltd Share Price

Management Outlook and Key Points:

Outlook:
HT Media's management remains cautiously optimistic, emphasizing sustained momentum across key businesses (Print, Radio, Digital) and leadership transitions. Focus areas include driving growth through strategic diversification (e.g., Digital, OTTplay), improving operational efficiency, and leveraging festive/event-driven opportunities. The Print segment is expected to remain core but under pressure, while Digital and Radio are prioritized for future growth.

Major Points:

1. Financial Performance:

   • Consolidated Revenue: Grew 9% YoY and 11% QoQ, driven by Print (advertising up 9% YoY) and Radio (29% YoY growth).
   • EBITDA: Improved 64% YoY (INR 46 crore), with margin expansion in Print (+400 bps YoY).
   • Cash Position: Strong liquidity at INR 920 crore, supporting strategic investments.

2. Segment Highlights:

   • Print: Revenue growth led by pricing/mix (English ads +14% YoY, Hindi ads +3% YoY). Circulation revenue declined due to promotional discounts for copy expansion.
   • Radio: Growth driven by non-FCT revenue (events, off-air initiatives), though margins remain pressured.
   • Digital: Revenue up 32% YoY (INR 51 crore), with losses narrowing. Investments in OTTplay (subscription aggregation platform) continue.

3. Strategic Initiatives:

   • Diversification: Focus on Digital (OTTplay, Shine, Mosaic Ventures) to reduce reliance on Print.
   • AFE (Ad-for-Equity) Deals: Expanding investments in equity/property via ad-barter agreements, creating non-core asset portfolios for future monetization.
   • Cost Control: Tight operational expense management across segments.

4. Challenges:

   • Print Industry: Structural decline in ad volumes, offset by pricing/mix strategies.
   • Radio: Yields below pre-Covid levels; exploring digital extensions and regulatory relief.
   • Digital: High CAC (customer acquisition costs) for OTTplay; monetization remains gradual.

5. Leadership Priority: Ensuring smooth transitions while balancing legacy platforms and new-age offerings.

Question 1:
"In your current liabilities, you have sundry deposits of INR 500 cr. What are these - why do we need deposits? Are we a deposit-taking Company?"
Answer:
The INR 500 crore deposits stem from Ad-for-Equity (AFE) deals, where advertisers provide deposits in exchange for equity or property. HT Media does not accept public deposits under RBI regulations; these are contractual arrangements tied to advertising agreements and counterparty investments.

Question 2:
"As per recent industry reports, the Print industry is declining. Is your strategy aligned with these trends?"
Answer:
HT Media acknowledges Print's decline but emphasizes diversification into Digital, Radio, events, and ventures like OTTplay. While Print remains core (contributing <85% of revenue vs. historical levels), investments in digital adjacencies aim to reduce reliance on traditional media.

Question 3:
"Given your strong cash position, are you considering riskier growth avenues or adjacencies in media?"
Answer:
The company prioritizes focused investments in existing digital ventures (e.g., OTTplay, Shine) over speculative expansions. Calibration balances cash deployment with "right to win" opportunities, emphasizing depth over breadth in digital/news extensions.

Question 4:
"Why maintain two listed entities? Any plans to rationalize?"
Answer:
Simplification is desired, but regulatory and shareholder alignment challenges persist. HT Media remains open to consolidation if stakeholders agree but currently operates both entities as-is.

Question 5:
"Where are Radio yields vs. pre-Covid levels? How will you improve them?"
Answer:
Radio yields remain below pre-Covid levels. Strategies include digital audio expansion, events, and lobbying for regulatory relief (e.g., reduced royalties). Growth in non-FCT (off-air) revenue (events, digital) partially offsets yield pressures.

Question 6:
"What drove English Print ad revenue growth? Volume or pricing?"
Answer:
Growth was driven by price/mix improvements and festive-season initiatives (e.g., HT Leadership Summit), not volume. Auto, real estate, and retail sectors led growth, offsetting FMCG/BFSI softness.

Question 7:
"How does the BSNL-OTTplay partnership work? Are expenses for OTTplay sustainable?"
Answer:
The BSNL tie-up is nascent, with HT Media receiving payments for services provided. OTTplay expenses are declining (65% YoY reduction in Q3) and expected to reduce further as the platform scales.

Question 8:
"Which segments benefit from event-driven revenue, and how do margins compare?"
Answer:
Events fall under Print and Radio. Margins vary: branded events (e.g., HT Leadership Summit) are profitable, while tactical promotions may have lower margins. Legacy events with established IPs yield higher returns.

Question 9:
"Why do expenses outpace revenue growth? When will this reverse?"
Answer:
Expenses include strategic OTTplay investments (classified as "other expenses"), which dilute overall margins. Print shows operating leverage (revenue > costs), but digital investments delay consolidated profitability. OTTplay scale-up could reverse this trend long-term.

Question 10:
"What is OTTplay's market potential? When will expenses stabilize?"
Answer:
HT Media targets >1% of India's 125M+ OTT users, aiming for ~INR 200"“250cr annual revenue. Expenses (e.g., customer acquisition costs) will decline as the platform matures, with FY25 Q3 costs already down 65% YoY.

Question 11:
"Why has cash increased? How are AFE investments accounted for?"
Answer:
Cash growth reflects operational performance and working capital efficiency. AFE-related property/equity investments are marked separately (e.g., "investment property"), with provisions/mark-to-market adjustments disclosed in financial statements.

Question 12:
"Why did staff costs rise QoQ?"
Answer:
The QoQ increase (~5%) stems from variable pay reversals in Q2, not structural hikes. Adjusted for reversals, staff costs remained flat.

Question 13:
"Why no ROCE improvement? How will shareholders benefit?"
Answer:
ROCE pressures reflect Print's decline and digital investments. HT Media defends its strategy, citing peers' sharper declines and emphasizing long-term value creation via digital ventures. Shareholder returns (e.g., dividends) depend on future profitability.