Highlights of the call

• The management expects the next 2-3 quarter to be challenging.

• As per management, study shows that in turbulent times Internet and Radio would grow faster than others.

• For the quarter ended December 2008, for radio business, net sales dipped 12% at Rs 59.97 crore with OPM up 250bps at 30.6% and PAT was down 40% at Rs 4.86 crore.

• Private FM sector de-grew about 7-9% in Q3FY09. The advertising market was growing at 17-20% earlier. As per data, Print Media has seen dip of 15%, TV has seen growth of 8%. The radio's market share has at 4.3-4.5% with the revenues for the year being Rs 850 – 875 crore of revenues down from Rs 950 – 975 crore guided earlier.

• The market share of "Radio Mirchi" was at 40-41% against 43-45% in the sequential quarter but it has maintained its leadership.

• Out of the total income of Rs 59.97 crore, the 10 legacy stations de-grew 15.7% on y-o-y basis at Rs 44.56 crore and against Rs 45.82 crore in the sequential quarter. EBITDA margins stood at 37.9% against 35.1% in the corresponding quarter previous year and 21.4% in the sequential quarter. EBITDA was at Rs 16.86 crore down 9.1% on y-o-y basis and Rs 9.82 crore in the sequential quarter. The 22 new stations had revenues of Rs 15.41 crore with EBITDA of Rs 1.48 crore against Rs 15.74 crore with EBITDA loss of Rs 1.34 crore in the sequential quarter.

• The management expects bidding for Phase III to start mostly after the general elections.

• The volume dip for the Company was 14-15% in Q3FY09. The management saw little impact since end October 2008 and it aggravated in December 2008 and can be seen even currently.

• For Q3FY09, the Company saw stable pricing with pricing going up by 2-3% in legacy stations. The Company has been the leader in terms of pricing. It might reduce prices by minimum 5-8% to boost volumes.

• End December 2008 there are total 245 stations in 87 cities against 177 stations at end December 2007.

• The Company has undertaken cost reduction measures which include freeze on recruitment wherein it expects that expenses of FY10 would be lower by 10% over FY09 whereby the margins would improve by 6-8%.

• "Radio Mirchi" is leader in Delhi, Kolkata and Mumbai and it has been rotating from 1^st to 2^nd spot in Bangalore.

• The royalty issue has not been resolved yet.

• Q4FY09 would be subdued quarter. The management expects that Q1FY10 could see some upside due to elections and new budget in April 2009.

• Of the advertising revenues, Retail Advertising (local) contribution was down at 31% from 39% in the earlier quarter. The local advertising is mainly education, real estate and local government advertising. Of the local advertising, real estate was hit mostly.

Out of Home business (OOH)

• The OOH segment is going through turbulent times. There have been problems of predictability of infrastructure. The segment has seen significant slowdown and cancellations of contracts. The most impact is Billboards (60% of market) wherein the company's exposure is least. Street furniture is a close to monopoly segment, which has been relatively less impacted. The Company has presence in Bangalore, Hyderabad and Chandigarh. The Transport segment (Airports) where impact has been seen. The company has MIAL and DIAL contracts.

• The segment has seen loss of revenues and cancellation from BFSI, Aviation and Real Estate industry whereas some compensation is seen from IT-ITES, Hospitality and Infrastructure industry.

• OOH segment has seen pricing pressure with highest impact on billboards.

• There has been deduction of 20-25% of contract due to development going on at sites. The management expects license fee of Rs 8.5 crore per month.

• The Out of Home business (OOH) reported revenues of Rs 39.82 crore with EBITDA loss of Rs 12.63 crore against revenues of Rs 38.68 crore with EBITDA loss of Rs 13.22 crore in the sequential quarter. On y-o-y basis, the revenues were down 5%.

• The traditional business was stable and the Airports were down 8%. Of 9MFY09 revenues of Rs 118.07 crore, Airport revenues of Rs 75.8 crore.

• The management expects OOH business to be net profit break even in FY10.