Balaji Telefilms Limited (BALAJITELE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Balaji Telefims Ltd. Q4 and FI26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risk and uncertainty still difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star 10-0 on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Sanjay Divedi. Group CEO and Group CFO, Balaji Telefriums Limited. Thank you and over here, sir.

Good afternoon, everyone, and thank you for joining us for Balaji Telefriums Limited's earnings conference call for the quarter and full year ended 31st March 2026. On the call today, I have with me our finance controller, Viren Trivedi, and our investor relationship team from AdFactors. I hope you had the opportunity to go through our financial results, presentation, and press release shared on the exchanges. It is a pleasure to connect with you all over again. FY26 has been a transformational year for biology-driven films. Where we have built a strong foundation for future growth, while the financial performance reflects a transitional phase for the business and broader industry challenges, this year has been focused on building a stronger content pipeline, expanding our digital capabilities, and repositioning the company for long-term growth across platforms. We believe the investment and strategic initiatives undertaken over the last few quarters are helping create a stronger base for future execution and monetization. Let me begin with some important developments from the recent period, which reinforce our future growth trajectory. One clearly is strengthening our OTT partnership. We expanded our collaboration with Netflix with two new web series currently under development, including a large-scale period drama and another premium show. This marks the continuation and deepening of our long strategic... We now have an order book of approximately 350 crores under this line, out of which we expect to realize over 135 crores or so within the ongoing financial year FY27. Some of the shows under production here includes Lockup and Cope, which is tentatively titled, which will be released during this financial year. We also have a show in Pipeline, which is in collaboration with Amazon. We have recently entered into a strategic collaboration with Vertigo TV through Balaji Telefilm's studio model to produce Hindi vertical micro-drama tailored for mobile-first audiences. This is a new storytelling format focused on short, immersive, high-engagement content. It aligns with the evolving consumer behavior, especially among Gen Z and mobile-first users. We believe this format has the potential to emerge as an incremental growth and monetization opportunity over the medium term. We are also expanding our digital ecosystem through IP creation. During the year, we have continued to build our digital ecosystems, including scaling of cutting and ABOD-led platforms, strengthening of B2B digital content pipeline, continued focus on IP-led growth, launch of Astrology app as a part of service diversification. We are seeing increasing traction in the digital segment, supported by improving visibility in the content pipeline and platform diversification initiatives. There are some new growth verticals. We have also initiated steps towards expanding our presence beyond traditional production, including building new creative and talent-led ecosystem within the digital segment, exploring new formats, partnership, and content agencies. These initiatives are aimed at diversifying revenue streams and strengthening our long-term content pipeline. Just to briefly recap the key development through the year, integration of alt and marinating films, which... Results into a huge cash saving as we got an input credit of 113 crores. And next four to five years, we expect Balaji will be zero tax-paying company. Launch of new digital platforms and initiatives, strengthening of OTT partnership with Content Pipeline, continued investment in motion pictures and IP creation. FY26 was essentially a year of building the base for the future scale. Segmental breakup, digital business. Digital business to be our core growth engine, the addition of new formats like vertical microdramas and expansion of OTT partnerships significantly transcends our position. The B2B order book and platform strategy provides strong revenue visibility. We are building a multi-format, multi-platform digital ecosystem. Television business continues to remain an important business segment for us, although industry dynamics and viewership trends continue to evolve. This year saw temporary softness due to show transitions and overall paradigm shift away from the traditional TV. We are now rebuilding the pipeline which will support gradual recovery. Business EBITDA in the TV segment grew sequentially from a loss of 7 crores in the previous quarter to a profit of 4 crores in quarter 4 at 5.26, indicating a turnaround in this segment performance. With successful shows like Yuki, Saasvikabhi, Bahuti 2 and Nagin 7 doing well, we expect this momentum to continue. Our Motion Pictures business continues to be supported by a strong pipeline of upcoming projects and a calibrated pre-sales-led approach. We remain focused on improving content monetization, enhancing revenue visibility, and maintaining discipline capital allocation, which we believe will support sustainable growth in this segment over the medium term. Our recent release, Bhut Bangla, received excellent audience reception. In terms of our content slate, we have another 17 movies in the pipeline planned over the next three years, and we will have four movies released in this year, out of which three movies have already been pre-sold. Of the cost, recovered is 99%. As we have mentioned in the past, our film business model is such that we strive to recover almost all the COP before the release, thereby reducing our risk exposure on theatrical performance. This has been the case of Bhut Bangla and the next two movies that will be coming. Financial performance. Coming to the financial performance, quarter 4, FY26 was impacted by timing-related delays in content monetization and a software contribution from the traditional television business. Revenue from operations for the quarter stood at 47 crores. Abitual loss for the quarter stood at around 17-0 crores, while loss after tax was 14 crores. For FY26, revenue from operations stood at 210 crores, as they get at 453 crores in FY25. Abitur loss for the year stood at 65.8 crores. A loss after tax stood at 49.6 crores. The performance during the year reflects the overall industry headwinds and changing landscape, lower activity levels in the television segment, and continued investment towards strengthening our digital ecosystem and future content pipeline. Having said that, we believe several of these factors are traditional in nature. Our focus remains on improving monetization across the commission and digital businesses. Strengthening content delivery across formats and leveraging our strategic partnership to derive growth. With a healthy liquidity position, we have over 165 crores liquid cash into the banks and mutual funds, and a robust pipeline across television, films, and digital platforms. We remain confident about the medium to long-term growth opportunity for the business. Looking ahead, we expect FY27 to be the year focus on execution, improved content monetization, and gradual business normalization across segments. And this update... In the financial performance, any execution will be very much visible from the quarter one of FY27. Execution of our OTT partnership, improving traction in the digital pipeline, newer content formats such as micro dramas, release of multiple films, and gradual stabilization of the television pipeline are expected to support business momentum going forward. As we move forward, we expect digital scale and cinematic storytelling to play an increasingly role in our growth journey, while television will continue to remain an important backbone for us. With that, I would like to open the floor for any questions. The entertainment industry is rapidly evolving to a digital-first format diverse and IP-led content consumption. With extended OTT partnership, entry into a new age format like micro, With that, I would like you to open for the question Q&A session.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press start and 1 to ask a question. We have the first question from the line of Sukhri D. Barton from iSight Center at Private Limited. Please go ahead.

Good afternoon. I have two questions. First question is, I want to understand a forward guidance. What type of strategic levers are you prioritizing in FY27 to strengthen Balaji's OTT platforms, old Balaji, and television content pipeline, while managing risk from rising production costs and competitive streaming dynamics? That's my first question. I'll have my second question after this. Thank you.

Okay. So, currently, Palaji is a content storytelling company across formats and across platforms. If I just let you know what we have built over the last one year, which will play out in this financial year of FY27, if my commission shows, which is TV plus OTT, which is B2B business, which was around 160-odd crores in the FY26, We expect it to be around 330 crores in the coming fiscal year. So that's a huge upside that we are seeing. With two of the premium shows coming on Netflix in this financial year, one is Lockup, and second one is Centrifield Title as Coke, which will come in February, plus one show on Amazon. So that's a huge upside which we are seeing. We have an order book of over 350 crores, plus around. 50 crores gets added each quarter. So, we will continue to build on those models. So, whatever decline you are seeing in commissioning TV models gets compensated by the upside which we are seeing on the OTT-led content. However, I must admit here, the margin as compared to television and OTT vary differently and significantly, I would say. See, in Kiwi, what happens is the show, it runs for six months, 12 months, 18 months, five years. So the marginal costing and everything comes into play and you have a better field. Whereas the OTT-led platform typically will not have that kind of field because these are all finite series. It gets short on the schedule. So though even the top line increases manifold, I believe the margin will not be as robust as television. That is on the television side. Now, on coming to motion pictures side, we hardly had any release last year. That was one of the issues which Balaji has been facing, erratic cycle, erratic release of the movies. Now, we have worked on a three-year slate, 75 movie pipelines ready. Each year, we will have four to five movies releasing, and we expect this year close to 400 crores top-line coming from motion pictures itself, as compared to only 15 crores, which was there last year. Then we have Balaji Studio, which is typically working with independent creators for the other leading platform. We had 8.5 crores revenue last year. We believe it will be around 70-odd crores this financial year. Plus, there is Meta, which we just started last year with a revenue of around 6.5 crores. We believe that will be around 150-odd crores this year. Similarly, Balaji Huna, the talent agency which we started just the last quarter of financial year, we have already have a talent pool of 50 plus artists. We have cropped a revenue of one and a half crore last quarter. We believe this will be at least doing 12 crores in the coming financial year. And Balaji has to get which... This has been quite a successful app launched by us. We have an app installed of around 1.8 million with a voluntary charge, F526 or 56 lakhs plus, and we expect close to 6.5 to 7 crores in this financial year. So this is the broad strategy which will play out in FY27. Now I look forward to your second question.

Thank you. My second question is, what type of capital allocation frameworks are being applied in 2027 to balance investments in digital content while sustaining the profitability margin, given all Balaji's subscriber churn and rising distribution costs? I just want to understand your view on this. Thank you.

So, television doesn't typically require a huge capital outlay. Television and commissioning model OTT platform, because it is also funded by the platform themselves. So, maybe three months of capital, which will be around 50 to 55 crores, gets locked into this kind of segment. Whereas on motion picture side, we try to pre-sell all those movies, and what happens is 50% of the COP gets funded by the pre-sales, which we do. So just to give an example, if Bhutbangala, now this number, I'm just giving an example. If Bhutbangala was costing me around 100 crores, I have got around 48 crores funded by the platforms, and balance was funded by us. So, the way we approach now each business is. Turnaround time and return on capital. That should be the fundamental going forward instead of, you know, sometimes movie takes two years, one and a half years, and we invest 100 crores and get 10 crores out of it, which typically is a very poor yield at times. So the focus we have changed, we clearly look at capital return now, and all those things will play out in the Subway 27 starting quarter one itself. Thank you. Typically, we will have investment of around 125 to 150 crores at any given point of time, because certain movies will be on source, certain movies will be nearing release, and certain movies will be in advanced stage of discussion and rolling out for the next schedule. And digital business, not more than 10 to 15 crores, we require working capital to run that stream.

Thank you, and best wishes.

Thank you.

Thank you. Before we take the next question, a reminder to all the participants, you may press star and 1 to ask a question. We have the next question from the line of Yajat Shah, an individual investor. Please go ahead.

Hi, sir. As you have mentioned, Booth Bangla cost has been recovered. Could you give a guidance on how much we have earned from the movie and also our share in the net box office collection?

So, we don't give that kind of guidance note in the conference call, but I can assure you, we have got a very significant returns on this capital employee, which will be visible in the quarter one numbers, yeah.

Okay, sir. Thank you.

Yeah. The film has done exceedingly well at the box office. The number is there for everybody to see.

Okay, sir. So we can expect the numbers in the Q1.

Absolutely, absolutely, absolutely.

Thank you, sir.

Yeah.

Thank you. A reminder to all, you may press star and one to ask a question. We have the next question from the line of Yash Barker, an individual investor. Please go ahead.

Hi, am I audible? Thank you so much for the opportunity. So, my question is regarding the recent amalgamation of all the digital media entertainment and marinating films with our biology telephones. It was effective from 4. So, what specific operational synergies or cost rationalization have we realized in Fi26 and what incremental benefits can we expect in Fi27?

So, I would just lay down the two broad indicators of the benefits which will be reflective in the financial statement. So, if people would recollect that alt was burning around 125 to 145 crores each year when, say, two years back. The whole idea was to make it leaner, make it more cash efficient. Last year, our cash bond was 50 lakhs, thereabouts, per month. So it is around 6 crore of cash loss on the total digital initiatives, including the newer launches like, say, Astro or we do whatever initiatives. So that way, we have brought it down to bare minimum. The turnaround is expected in FY20, so the overall digital business will be cash positive. Two, the other major initiatives or the significant benefits which will arise for the parent company, which is Balaji Telefilm, is the huge input credit for GST, which is around 170 odd crores. So we have that asset, which it remains to be utilized. And plus, I believe next four to five years, there won't be any incidence of direct text also, which will be reflected in the P&L statement. So that's the key benefits coming out of it. And plus, there is operational efficiency and all those things which happens, which is getting reflected in the cash saving, which I just mentioned. We are running around 50 lakhs per month. And which is seeing a downward trend there also.

Correct, sir. So another question is regarding this AI, automation, and IP, which are the three pillars for the company going forward. So could you, like, elaborate on how are we using AI and automation? Is it for content production? Is it for distribution, targeting, or, like, for measuring some efficiency or something like that? How are we using AI?

Yeah, we have set up our own AI team into the company. There is a captive team which sits here and works on the various formats which we do. We have done many newer things using AI tools. One is the creating a short format reels and shows, and we also won awards for it. Two, we have also generated AI music library, which is doing... Very well on the internet. And we are bullish on this segment. We are a little cautious on the investment side. And we gradually hope to scale it up as time passes. And it will be a full-fledged AI team integrated into the overall production efficiency model, which we have in-house. So this is going to play a critical role here, too. Including VFX, those things we are developing in-house so that we have the skill within the company too, because we are present in all the formats, VTV, VD, digital, VD, motion pictures, and web series. So it makes more sense to have a specialist in the company to run the show for 24 hours.

That answers. Another question, sir, is regarding inventories. So, it rose from around 73 odd crores to somewhere around 207 crores.

So, could you give us a little

breakdown on this inventory, how much has movies and the production versus digital, and, you know, what is the expected delivery timeline or maybe when you start?

First of all, the inventory is coming out of motion pictures. So what you see as of March is largely your Booth Bangla 1 and Hiroki Horain. That three movies inventory is residing there. So typically what happens with an accounting is when you sign talent and many of you advances, it resides as an advance onto the balance sheet. The moment it grows on the floor, it gets translated into inventory till you see the first monetization. When the funds monetization you do, typically that is a theatrical. From that time onward, we start. Kind of amortizing these inventories, and on the last leg of the monetization, this inventory is fully written off. So, we don't carry any intangibles to the balance sheet with the last monetization.

Correct. And so, last question from my side. The cash and the investments that we have have declined from 178 odd crores to nearly 127 crores in FI26. So, could you explain the difference between the balance sheet figures and the current level right now?

The earlier question will kind of answer the last question on cash and cash equivalent. So, if you see a liquid cash, we have around 165 crores, and balance is into inventory.

Okay. And, sir, what is the minimum liquidity threshold that we are comfortable with going forward?

Into motion pictures?

Yes.

Close to 125 to 150 crores.

Okay. That answers my question. Thank you so much.

Thank you.

Thank you. We will take the next question from the line of Vansharathor from JJ Investments. Please go ahead.

Hello.

Yeah.

Hi, am I audible?

Yeah.

Yeah. Good afternoon, sir. Sir, I had just one question. Shows like Kiki Saas and Nagin 7 are doing so well on TRP basis. What do you think how confident the management is about this momentum for FY27?

Okay, so I think on the television side, they are not kind of innovative enough in terms of the show format, so in terms of the content which they want to play, you will find more of this TV business are playing very safe with the conventional model. The yield is going down. In fact, if we just compare the yield to the pre-COVID year rate, we are still down by 25% to 30%. So, the investment into the content from the broadcast side has significantly slowed down and considerably reduced. As a result, all the production houses will see their margin getting depleted, and it affects Balaji telefilms also. So, the kind of effort which we put in and the kind of reward which we get because it is primarily the IP is owned by the broadcast. So, it is becoming less lucrative for a production house to kind of run this kind of business where the yield is year-on-year keeps degrowing, and the tenure of the shows also is getting reduced, you know. Earlier, the show used to run for a year, two years, three years, and there was enough and more opportunities for production house also to make a decent return. With the tenure of the shows, very few shows run more than a year these days. If you just scan each of these broadcast companies, you'll find six to nine months is becoming the norm. So everybody is going through the tried and trusted formula, format shows we'll play. We intend to build our own IP around that and take it from there on. So IP retention will be key rather than just doing work for a higher business. I think that's the way currently it is looking like. But I still believe television as a medium still has a life. I think 10, 12, 15 years, it can still survive. But they need to invest into content, which I currently don't see them doing it. However, they are bullish on the OTT segment. So that's another challenge for them. They bleed on OTT, but where the profit is getting generated, they are not investing so much of content.

Okay, so regarding, you mentioned that A particular show runs for approximately six to nine months, so do we, for example, do we prepare a future?

Yeah, so we do, because as a business, we have to have active discussion with the broadcast. If my show is coming to an end, what is that show which we should be pitching? But there is a lag between by the time the show ends and by the time you go with another show on air. Hence, what we are doing is we are building the B2B business with the leading OTT platforms. So, whatever dip you will see in the top line of the television traditional business will get compensated by the business which we generate from the OTT platform.

Okay. So, this is one of the security measures for the dip. Any other steps you take?

Yeah, because OTT business, you can see a swing there. There is an upside there. So, we believe this, whatever decline you see on TV will get compensated by that medium.

Done. Sir, if I can ask one more. Regarding the merger of Ault and MFPL. So, what are the specific cost savings or any operational synergies that will be reflected moving forward?

I just covered it in the earlier questions. But largely, the financial benefit I can lay out for you as well. One is the indirect tax benefit of around 117 cores we have in input tax credits. That's a state cash savings onto the balance sheet. And next four to five years, company will not be paying any tax because of the brought forward losses of all businesses. And that's, again, on the P&L side. Other operational efficiencies I have already illustrated in the earlier questions with the gentleman I asked.

No issues, sir. Thank you so much. Have a great day, sir. All the best.

Thank you. Thank you.

Thank you. Before we take the next question, a reminder to all the participants, you may press star and 1 to ask a question. We will take the next question from the line of Chaitrika Deshpande, an individual investor. Please go ahead.

Good afternoon, sir, and thank you for the opportunity. My first question is, how should investors think about Balaji's business mix over the next two to three years?

I would put it this way. You see, historically, Balaji was known as a television production company. I believe in next two to three years, this pyramid will shift, and Balaji will be more an IP-led content creator, with the movie contributing more than 50% to the top line and profitability, followed by digital business, and television will be the least contributor to the segment. That's my take. So we'll be more IP-led. Television, anyway, we were not having IPs. It was more like contract for hire. And in the long term, though it used to give us a strong kind of profit. But over the years, since last five years, the margin has been depleting, the content production cost is under pressure. Broadcasts are not investing much into this television space. So we clearly see an upswing into the OTT side. And we believe this Balaji Motion Picture will be more of an IP-led company where we intend to regain IP, we build our own scale. So motion pictures will become the key business for the Balaji telefilms. We have a strong pipeline of 17 movies over the next three years, with four to six movies in each year, and we continue to build on it with a proper D-Disk formula where we pre-sell all the movies before we go on floor, and the clear focus will be on the TAT, turnaround time which we have for the project, how quickly we can turn around, and clearly the last and the most important feature which we have introduced internally is the capital return. On the motion pictures. So, quick return, healthy returns, and virtually risk-free business model.

Okay. And so, how much revenue visibility are we currently seeing for FY27?

So, FY27, if I say, we will be expecting close to around, say, 800 odd crores. Top line. Largely driven by motion pictures, movie will give you almost 50% of it.

Okay, and how scalable is the current digital content pipeline?

For digital business, I believe, when I said digital means it's B2C. The way we see digital businesses, B2C, whatever we do for leading OTT platform, we still call it commission model. So television plus commission model will be close to around 300-odd crores. Motion pictures will contribute around 400 crores. And B2C business, where we own IP, we retain everything with us and we monetize, I think that will be contributing around 100-odd crores in this financial year. Okay.

And which of our business vertical is currently seeing the strongest traction?

Sorry, I didn't get you.

Which business vertical is currently seeing the strongest traction?

Yeah, it's motion pictures followed by digital.

Okay, all right. Thank you so much, sir.

Thank you.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, we now conclude the question and answer session. I now hand the conference back to Mrs. Sanjay Divedi for the closing comments. Thank you. No good news, sir.

Thank you. Thank you all. And hopefully, quarter one number when we release, it will reassure most of the people and investors about the strategies which we have worked upon last year. We were hard at work. And I think all the efforts which we have put in last year should play out in the year to come. More specifically, I am quite clear from quarter one itself, it will be seen in the financial numbers. With that, I would like to thank you all for taking the time to join us today. Thank you.

Thank you, members of the management. On behalf of Balaji Telephones Limited, we conclude this conference. Thank you all for joining with us today, and you may now disconnect your lines. Thank you.