Key takeaways of the call

The Print Industry undoubtedly dealt a severe blow by the pandemic and while the economy gets back on track slowly, Tier-Il and Tier-IIl cities have not only bounced back stronger than most of the country but are leading the charge and have seen considerable improvement, especially in the festive season.

The pandemic has further strengthened the divide between India and Bharat when it comes to the Print Industry. Indian language newspapers are doing well not only in circulation numbers and pagination, but as advertisers turn their focus from the metros to smaller cities, advertising revenue is also set to see growth.

Improved operating performance of the company is largely due to significant rise in advertisement revenue and permanent gains on sustainable cost optimisation measures. Expect this will set the pace for the forthcoming fiscal.

Advertising revenues are reclaiming pre-Covid levels (YOY). With the festive season providing a strong impetus, the company have reached print business advertising at 87% of Q3FY20 with festival months of October and November together seen advertising revenue achievement of 95%.

Ad spend of local advertisers constitute 64% of total ad spend compared to 61% earlier. While education and government ad spend has seen some increase, ad spend by lifestyle category was sharply down by 53%. Auto and real estate categories were also down due to no new launches and unexpected opening of markets.

Circulation of the company currently reached around 90% of the pre-Covid levels. The company is witnessing continuous improvement in circulation nos & expect to gain back most of the copies once normal market operations, including running of normal railways & bus services are allowed.

Circulation of copies is currently at 44 lakh and spot sale forms minor part of the total circulation. Recovery in circulation is being affected due to logistics issues

Sharp jump in EBITDA margin is due to improved economic performance, soft newsprint prices & cost cutting measures.

Expect about Rs 80-100 crore of the cost rationalisation to sustain even in normalised scenario.

Newsprint prices even though stay lower YoY it is likely to increase 3-4% QoQ due to shortage of waste paper and possible revision in prices by Indian manufactures.

Radio volumes were at 90-95% of pre-Covid level while yield dipped by 25-30%. Latest IPAB order regarding royalty cost will lead to some savings.

The company achieved cost saving of about Rs 178 crore during 9MFY21 and the company expect annual cost saving of about Rs 200 crore is expected in FY21.