Network18 Media climbs after Q4 PAT jumps 242% YoY to Rs 206 cr

Network18 Media & Investments rallied 2.86% to Rs 39.60 after the company's consolidated net profit surged 241.91% to Rs 205.80 crore on 3.40% decline in revenue from operations to Rs 1,414.70 crore in Q4 FY21 over Q4 FY20.

Consolidated operating EBITDA jumped 24% to Rs 279 crore in Q4 FY21 as against Rs 225 crore in Q4 FY20. Operating EBITDA margin improved to 19.7% in Q4 FY21 as compared to 15.4% in Q4 FY20. The Q4 earnings were announced after market hours on Tuesday, 20 April 2021. The market was shut yesterday (21 April 2021) on account of Ram Navami.

The Entertainment operating margins stood at 19% in Q4 FY21. The News margins rose to highest ever levels of 27% in Q4 FY21, led by 5% Y-o-Y (year-on-year) revenue growth. Digital News maintained its break-even performance. Consolidated revenue ex-film production grew 2% Y-o-Y, despite deferral of award shows.

The Entertainment advertising ex-live-events (which were deferred) has grown in high single digits, as recovery from COVID-19 was cemented with a full roster of original programming. Resumption of two channels on Freedish and strong performance of properties like Bigg Boss and Dance Deewane continues to drive up viewership and monetization, the company said.

While TV News ratings remained under blackout since October 2020, the News channel portfolio was largely unaffected as it grew across revenue-streams, including virtual events. Digital News maintained its growth trajectory, rising 50% Y-o-Y for the third consecutive quarter. Positives from increased salience of the medium for advertisers have been accentuated by the growing stature and reach on the platforms.

Domestic subscription revenue growth improved due to tie-ups in TV and Digital (both B2B and B2C) offset stress in International. Subscription revenue remained largely resilient to COVID-19 impact, growing 1% Y-o-Y in FY21. Broad-based cost controls helped offset COVID-19 impact and sharpened operating leverage. Q4 FY21 Opex (Operational Expenditure) skid 8% Y-o-Y despite full resumption of programming and calibrated investments into marketing/distribution in tandem with monetization opportunities.

The company further highlighted that TV viewership settled higher above pre-pandemic levels. TV households have increased to 210 million from 197 million in 2018 as per BARC, registering a growth of 6.59% while penetration was still at 66%. Digital engagement continued to grow linked to volume of high-quality content and key events. Industry sources indicate a 10% Y-o-Y increase in OTT video consumption. Increased propensity to pay has been witnessed, amidst domestic OTTs increasing prices selectively; while global players create India-specific cheaper offerings. This supports our belief that in the Indian context both mediums will continue to grow in parallel, across both free and pay ecosystems.

Commenting on the Q4 FY21 results, Adil Zainulbhai, the chairman of Network18 Media & Investments, said: "The group has successfully dealt with the challenges posed by the COVID pandemic, and posted much improved profitability in a difficult year. The connect of our diverse brands with consumers has only grown during this period. This bears testament to our business process resilience and innovation in adversity; factors which have proved critical and will continue to remain of prime importance as we navigate any future challenges. Our plans to invest in digital growth and our resolve to excel in television remain constants amidst a dynamic business environment."

Network18 Media and Investments is one of the largest media conglomerates with diversified but synergistic interests in television with its bouquet of fifty channels in India and thirteen international channels, besides filmed entertainment, digital content, magazines, digital commerce and allied businesses.

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