Key takeaways of the call

In Q4FY21 circulation registered almost 300-bps growth on a q-o-q basis, enabling the Group to reach more than 90% of pre-Covid circulation numbers. The on-ground calibrations done by local teams have helped the company achieve almost 95% of pre-Covid levels in select cities and towns. The recoveries have been significant in the key states of Madhya Pradesh, Rajasthan, Gujarat.

Mega editions as well as cost rationalisation measures and soft newsprint prices, the EBITDA for the Print Business in Q4FY21 came in at Rs. 112.2 crore (with an EBIDTA margin of 26%) as against Rs71.5 crore (EBIDTA margin of 16%) million last year quarter and helped end the year FY 21 at Rs 358.2 crore (with an EBIDTA margin of 25%) as against Rs 482.1 crore (margin of 23%) in FY20.

The un-metro path chosen by the Founder and solidified by the Company over the past few years is continuing to fructify. The local and relevant content that it continued to deliver to its readers has further strengthened the franchise and has ensured that it have emerged stronger.

In challenging times Indian language newspapers doing significantly better than English counterparts and outstripping them not only in circulation numbers, but in advertising revenues as well.

Digital efforts are also beginning to see traction. Subscription charges for the app is more than one year away. No advertisement revenue so far on the app. And the company is confident that it will continue to deliver quality journalism through all medium. In next few year time digital and print will grow together.

Second wave happened during April and May of current year and by first week of June most states have opened up. Subscription wise no major impact so far and that is still good. Once shops opened up traction seen from advertisers. Recovery of second wave is much sharper than last time.

Automobile advertisement that has done well in Q4Fy21 has come back in June 2021. Similarly FMCG has also come back. But Education (Schools, Coaching classes, Colleges), Cinema, Lifestyle advertisement is the major hit. Q1 is major wedding season but that is lost in case of lifestyle. Cancellation of exams and no result announcement deprived the advertisement on student performance/ranks by both schools and coaching classes. Government advertisement is also subdued.

Circulation dropped in April-May 2021 due to second wave of covid. Especially in MP due to time restriction on movement there the hit was more. Overall there was 5-7% drop on circulation. And the company expect to return back to March 2021 circulation numbers in June 2021.

Typically search in google is done for news or content. In talks with google, for working out an arrangement for search of news. In select overseas markets about 10% of revenue is shared by google with the publishing house. Google has tied up with 30 odd publishers.

Newsprint price in Q4FY21 stood at Rs 35600/tonne, a fall of 4%YoY and growth of 3%QoQ. Expect 12-15% increase in np prices but from Q3 onwards it could come down. Non availability of wastepaper is pushing up the news print prices globally.

A price increase of Rs 8-10/month in cover price was effected across all editions of the company.

Increase in fake news on social media during uncertain times led to print media got the increased backing of advertisers.

The Indian language newspaper stayed unfazed in the 2^nd wave unlike the first wave, which created massive disruption.

Brought out 20 mega editions across major markets. Cost optimization 195 crore overalls vs 125 crore estimate at the star tof the year. 50-55% of this sustainable savings will be carried forward in Fy22 as well.

In the last 3 year the company decided not to enter new geographies but to deepen taping of the opportunity in the existing market.

Bihar, Jharkand and Maharashtra markets became EBITDA positive before the advent of Covid. And that has to be reworked to bring it back. In Bihar the company is the number 2 player when no1 offers discounts the company has to follow.

Post covid the company has improved market share in key markets as some of competiors have compromised on quality in their efforts to curtail costs. While the company after dip form pre-covid level recovered to reach a circulationof 90-95% but the competitors are still reeling at 70-75% this means the company has increased market share.

The moment normalcy comes, the company is confident of doing better advertisement numbers than the current one.

Usually the advertisement recovery will be faster for print compared to other medium like radio In Q4FY21 as well the print recovered faster than radio.

Higher staff cost is due to ESOPs booked during the quarter, incentives for workforce paid in Q4FY21, increased expense in digital to increase views. However there was 6% fall in workforce. The company expects the manpower cost to be normal at about Rs 90-95 crore.