Entertainment Network (India) Limited (ENIL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Entertainment India Network Limited Q1 FY27 Earnings Call. As a reminder, all participant lines will be in 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-0 on your touch-tone phone. Please know that this conference is being recorded. I now hand the call over to Ms. Neha Salyan from EY Investor Relations. Thank you and over to you, ma'am.

Thank you. A warm welcome to all the participants to the Entertainment Network India Limited to one FY27 earnings call. The investor presentation and the financial results are available on the company's website and on the stock exchanges. Please note, anything said on this call which reflects our outlook for the future or which came to be true as a common-looking statement must be viewed in conjunction with the risks that the company faces. This conference call is being recorded and the transcript, along with the order of the same, will be made available on the website of the company as well as on the exchanges. Please also note that the audio of the conference call is a copyright material of Entertainment Network, India Limited, and it cannot be copied, rebroadcasted, or attributed in press or media without specific and written consent of the company. To give you a brief business update and to take you through the results, from the enhancement team, we have Mr. Yatish Mehrishi, Chief Executive Officer, and Mr. Sanjay Balab, Chief Financial Officer. I would now request Mr. Yatish to provide you with a brief update on the quarter. Over to you, sir.

Thanks, Naya. Good morning, everyone. On behalf of E&L, I extend a very warm welcome to all participants joining us for our Q1 FY27 earnings call. We announced our results yesterday, and I hope you had a chance to review them. I will now take this opportunity to walk you through our performance. During the quarter, we recorded domestic revenue of Rs.11 crore, marginal degrowth of 1.9% year-on-year. Performance was affected by the geopolitical conflict and related uncertainties, which led to our event cancellations, curtail travel activities of artists, and consequently lower business volumes during the quarter. EBITDA for the quarter grew by 42% to Rs.8.7 crores. This was achieved through the successful execution of several strategic cost personalization measures we have undertaken during the year. Encouraging to note that despite revealing macro headwinds, the non-digital business improved profitability, delivering EBITDA's growth of 7.4% and path growth of 85% during the quarter. Our international operations, though impacted by the West Asia conflict, contributed to be 3 crores in revenue. The company continues to maintain a robust balance sheet with a cash balance of 389 crores as of June 30, 2026. Turning now on the performance of our key segments, let me start with radio. The radio city advertising segment delivered reported revenues of 62.2 crores on the back of ongoing macroeconomic scenario. The challenging conditions witnessed in FY26 extended into Q1, FY27, with advertiser demand remaining soft due to the opportunities. This is affecting not only radio segment but the overall media industry. Despite the advance, we maintain our leadership position, showing resilience of our business model. Coming to our long FTC segment. The non-SVP segments stood at to be 17.5 crores, impacted by event cancellations and artist travel disruptions across markets weighed on the business activity. Moving to our digital business, in this quarter, digital revenues stood at 31.1 crores, up 43.3% year-on-year, contributing to 30.2% of our total revenue, up from last year of 23%. This growth was largely powered by Ghana's strong user traction and consumer engagement on the platform. I am happy to report that investment in digital business declined to Rs.8.3 crores from 9.8 crores in the same quarter last year, reflecting the results of our ongoing operational efforts. We have been reiterating that digital business will be the key driver of our growth and Q1F127 results were yet another quarter to showcase exactly the same. With this, I will hand over the call to the moderator and look forward to your questions. Thank you.

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 one on their touch-down phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of

Suresh from Burman Financials. Please go ahead.

Hello, please go ahead.

Good morning, sir. Give me the opportunity. Sir, actually so many quarters in radio business will suffer from advertising. It is only for West Asia reasons or any other issues. And second question, you will only for, you will search for radio and digital business. You go for any other ventures, you go for, and revise the company and go for any other business. You try to any other business.

Okay, thank you. Overall, yes, the West Asia crisis and overall economy situation did have an impact on media. Media, as I've been telling in other earnings calls also, is going through a major transition phase where the subscription numbers or advertising revenues are under pressure that there is a lot of content available. There is media segmentation happening, and this is leading to pressure on overall the advertising landscape. It's not just radio, but be it television, be it print, be it outdoor, all forms of Manila advertising are under pressure. And in addition to that, with the geopolitical crisis and uncertainties, lead to a much bigger impact. And that's the reason the radio degrowth you're seeing across the board, not just us, but I would say across traditional mediums, there has been a softness in the industry. To your second question, we have three businesses we put as vertical. One is radio, the second is digital, which you rightly said. The third is our event business, which has been growing quarter on quarter, every quarter. This quarter has been marred by a lot of cancellations because of artists who travel here to cancel a couple of activities due to the uncertainty, and that's the reason we have not been able to do that. But otherwise, our three major businesses remain radio, events, and digital.

Okay, sir. Actually, this business verticals, all verticals will be from media side. It is not good for growth.

Any other, you will try to, any other diversification, any planning?

So, so far we are concentrated on the media business, but with new tech of AI and all, we do delve on that and we keep experimenting on and do investments, internal investments on usage of AI. But lastly, our overall sector will remain media.

Only for media. We'll go for media. Okay. Actually, I am the long shareholder in the 10-minute network. Investor-wise, we will not grow any company. Sir, any buyback you can plan? Cash is available in the company, Jesus. Any buyback plan, you can plan?

That's a more discussion. We keep discussing as well when it comes. So, I think we'll come back.

You can take feedback.

Yes, Suresh.

Please. Bye-bye.

Yeah.

Okay. Thank you.

Thank you, Suresh.

Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants. To ask a question, please press star and run. I repeat, to ask a question, please press star and run. The next question comes from the line of Ronak Shah from Equator Securities. Please go ahead.

Yeah, thanks for the opportunity. The first question is on the point you highlighted about the event business, that there are a few cancellations. So, is there a possibility to roll over those business into the quarter or the event got cancelled is a permanent end kind of thing? So, I'm just asking from a one-off or a bump into the event revenue from the subsequent quarter.

So, what happens here is a couple of times, a few events get cancelled because they are strategic to that quarter, but for us, a couple of events have moved to the quarter 2. There are a couple of international artist concerts we wanted to do, which are happening in quarter 2. But largely, sometimes it does happen that the events are planned for that month, and if that gets cancelled, then you lose the event. Having said that, events business has always been S2-heavy. HQ1 and Q2 are always, you know, subdued. Other than media like 45, 55, S1, S2, events is almost... 35, 65, not more. So that's the way it looks like. So we remain very, very positive on our UN business and we believe our quarter two onwards, the business will remain in good shape only.

Understood. Secondly, from the Ghana perspective, so we have increased our subscription pack. So now, what percentage of our subscribers are on that pack and have we seen from this just because of the increase into the subscription price?

Yeah, so overall, it remains healthy. As I said, we have always been very prudent about looking at profitable subscribers and not just gun for subscriber growth. The overall thing for us has always been to look at profitable growth. The way we look at the profitable margin for subscribers is about 70% now for us. So there were little low-end subscribers which we keep churning out and keep a balance of subscriber numbers and profitability.

Okay, and variationally, though not a specific number, how you are likely to see FY27 shooting up, both in terms of your radio plus non-SVT business? And from the profitability point, how the trajectory will look like?

So, we believe this year the traditional mediums of radio TV print will remain subdued, the pre-on radio advertising. Even business will grow, experience has been growing across the board, and we continue to be bullish about it. To compensate and to work on our radio mutated growth or traditional media growth, we have taken certain very, very strong corrective actions on our operational court models. You have seen some results in quarter one. It will flow into all quarters over a period of time. This is just, we just over last one quarter and little more, we have started taking those actions, which will flow into the entire year also. So the whole idea is to look at the broadcast model starting afresh and see how we can look at operating costs are really, really efficient about it.

Okay, so can you elaborate on that part because one of your peers also highlighted they have restructured the operating cost model and the numbers are quite visible in their profitability. So which are the line of items which we are looking in terms of the cost saving and what can be the quantum of the saving which we can expect?

So, I will not want to put you the number to it right now, but to give a perspective, yes, there are networking of stations, usage of new tech of AI, usage of new broadcasting tools helps minimize the cost of broadcasting really, really drastically. So, that helps a lot, which impacts line items across the cost base. You know radio has always been a fixed cost model, so earlier it was difficult, but with new tech available and networking, it helps us to look at line items across cost structures to make it more efficient. And you would have seen in a quarter one for us, even with the subdued revenue, the profitability has improved over last year. And as I said, if it's just a quarter, we believe, over a full year, it will be much better.

Understood. And on the profitability front, any directional things which you can highlight compared to F-26 or in terms of current end rate?

Generally, we don't provide any guidance on this, but I will leave that to you right now for that.

No use. That's it for my friend. Thank you. Thank you.

Thank you. A reminder to all the participants to ask a question, no star star and run. IDP, to ask a question, deep star star and run. The next question comes from the line of Tannishi, an individual investor. Please go ahead.

Good morning, sir. I have three questions I would like to ask. Can you share only Ghana revenue and profitability for this quarter and why we do it?

Ghana revenues have been recently won't say. 21.4 crores against last year of 17.5, with a growth of almost 19%.

Okay, and what was the SCT and non-SCT split for this quarter?

As I said, here now digital is about 30%, so it's almost equal for us in terms of 45% radio, 30% digital, and balance is on SUT.

Okay. Can you show the details of the inventory utilization?

So inventory utilization has gone down by about

8%, but the price has improved to up by almost 5%.

Okay, and what was the volume growth that you have achieved in this quarter?

I said the volume utilization has gone down by 8%.

Okay, and what was the effective rate?

We don't, as I said, the rates have improved by about 5%.

Okay, and what was the overall market share?

Market share on volume has been about 26% to 27% of support.

Thank you. Thank you.

Thank you. The next question comes from the line of Chandramooli, Jagannathan, an individual investor. Please go ahead.

Sir, we said that the Ghana revenue is about 2021. What is the ELITA? What is the profitability? What's the plan in the future? And when it comes to Ghana?

Can you just repeat your voice on a little? I couldn't gather everything.

No, I'm asking about Ghana. You said that the quarterly revenue render rate is 21 cores. About what is the EBITDA and what is the plan for the future? How is it shaping up?

So, our revenues on Ghana have gone up by 20%. The losses have been reduced by about 14% compared to last year. Last year, our losses were about 9.8 crores. This year, it's about 8.25. Our endeavor is to make it profitable this year to get it late even. There are certain headwinds and certain issues that keep coming on from the market side, which we keep fighting it out. But right now, the endeavor is to make it as quickly as soon as possible. And we will be consistent on reducing our investment on digital quarter on quarter.

Sir, hypothetically speaking, assuming that the Ghana-based event, what would be the profitability of the other business, sir?

Can you repeat?

No, hypothetically, the question is, assuming that the Ghana-based event overall, what would be the profit from the other business?

So, if you look at our radio markets have always been in the range of 35% to 40%. Events have been in the range of 25% to 50% EBITDA margins. So, you can look at in those lines as a profitability margin.

And you are saying that the governor can be, you know, elite of us to year-end. That means from the 8.3...

So, it's a mix of both. See, you know, what happens is in Ghana because the subscribers are at a different price point. You know, it's not like a telecom structure where you change price for everybody. Your price keeps changing because the customer has committed a price. So when it turns out to a new price, it improves your top line also. So it's a function of both. The important part is to look at revenue growth. We have increased our price to $7.99 and it's a balance what we keep creating. As I said, for our endeavor for us is to Make it break even as soon as possible and not done for unnecessarily subscriber growth, which comes at a lower cost or a lower injury.

Okay, so this is happening after your plan.

Yeah, there can be a couple of quarters here and there because, you know, everybody is looking at the same consumer. Sometimes the cat goes up, so you have to balance it out. As you see in the market today, there are short-form dramas, gaming has stopped, but everybody is trying to acquire the similar customer. You know, there are 100 million or 150 million Indians who are the main subscriber market, or even in music, if you look at, there are 150 million people who scream music. If those are the people everybody is going for, sometimes your cat goes up. And that puts pressure on your marketing spend. So you have to keep a balance on it. So that's what we keep. So maybe sometimes it could be a one quarter hearsay, but the endeavor is to keep reducing our investment and make it break even as soon as possible. And that's what we've been achieving quarter on quarter to reduce it.

Okay. The earlier person also alluded that maybe you have a cash balance of about 390 crores. Maybe instead of a dividend, maybe you can think of giving a buyback because it is cash-effective now. Maybe as a promoter level also, it is my humble request too.

No, I'll take your feedback. Normally, it's a board system we keep discussing. We also keep evaluating strategic initiatives.

Because your market cap of the company is only about 500 crore right now. So, maybe you can come to us. Yes, I'll take your feedback. Thank you. Thank you. That's all, Samir. Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and run. I repeat, to ask a question, please press star, and run. The next question comes from the line of Donald Trump from E3J Securities. Please go ahead.

Yeah, thanks for the follow-up. My question is on Ghana again. So, we have seen some good double-digit shot-off subscription takers at industry level. Just because two things. First, the competitors have tweaked the pricing, and secondly, just because of the micro-headings, have we seen some moderation to the industry-level subscriber growth in the last few months? And secondly, from the competitive pricing perspective, if we see the threading, how are we likely to position ourselves compared to the current pricing?

Okay, so let me answer one by one. The pricing front, we still have a headroom compared to our competitors on an annual pack, but on a monthly pack, we are almost at the similar levels. Almost at the similar levels, like we would be at about 10% lower than competition. But important point when you look at the subscription market, we are the only subscription service, a pure subscription service available in the country. Rather, other services have free medium also and a premium. So they are largely premium. We are only a premium model. Having said that, if you look at certain reports and a lot of labels have also started looking at subscription is the way to go. And if you look at, Amazon Music has relaunched, has also put up price on subscription and looking at up your subscription service also. Spotify has globally also two days back, they have also announced in terms of putting restrictions on free model and looking at subscription. In fact, the biggest initiative has come from Universal as a label, where they have recently announced that their new music for 72 hours, first 72 hours, will be only available to premium subscribers. So the entire industry and all streaming players believe that for music industry to grow, it is the only way it's going to be for subscription, which we have been doing for the last few years, we believe on subscription economy only, and therefore we continue to believe. As I say, I have always been saying, it's a willingness to pay for music rather than ability to pay, and since it's available free, sometimes Indians are always value-fotious consumers, it takes time to change the behavior. But over a period of time, if you look at EY, KPMG reports, EY report or KPMG report, the numbers have been very heartening, they have been growing, and we have also grown our subscriber numbers in line with that. It's a slow one, but it has a bright future in terms of moving towards subscription. In the past, also, people have paid for music. It's just that in the middle of last 10 years, music has been available free, and that's the reason people are not putting value to it. But as people start putting restrictions on the free tier, people will look into a behavior stage of moving towards music subscription also.

Got it, got it. That's it for myself. Thanks.

Thank you, Anand.

Thank you. A reminder to all the participants, to ask a question, please press star and one. I repeat, to ask a question, please press star and one. The next question comes from the line of Suresh Baramsati from Baram Financials. Please go ahead. No, it's fine.

Sir, once again, you will give the opportunity. Thank you, sir. Sir, initially, EMA Entertainment Network YouTube channel is available. Sir, you have safe programs in generally health awareness, organic... Organic food side. Some events they have taken, the type of OTT, the YouTube channel, the type of events you can increase the market share. I will just suggest you. I know it will be it, but I will suggest you.

Thank you for the feedback. To give you a first thing, we do a lot of events on the health side also. We do a lot of marathons across the board and also on sustainability also we do a lot of events. So it's not just on entertainment side but on the health and sustainability side also we do a lot of events. We almost do 25 to 30 marathons in a year. We do pre-plantation drives and across the boards. So, a lot of activities we do which are non-entertainment also, depending on how the opportunities lie.

Okay, thank you.

Thank you, Guresh. Thank you.

Thank you. Participant who wish to ask a question may press start and run.

As there are no further questions, I would now like to hand

the comments over to the management for closing comments. Thank you, and over to you.

Thank you.

Thank you, ladies and gentlemen. It's a pleasure to have you all. We remain committed to driving our profitable growth and creating long-term value for our shareholders. Thank you once again for joining this call. Have a good day.

Thank you. On behalf of Entertainment Network India Limited, that concludes this conference. Thank you for joining us and you will now disconnect your lines.