Print media revenue to fall by a fourth this year on massive Q1 hit: Ind-Ra

Revenue was two-third lower year on year in June quarter for major players, with 76% plunge in ad revenue, 32% in circulation

The print media sector is likely to see revenues fall by almost a quarter for the current financial year. India Ratings and Research (Ind-Ra) in a note on Friday said that a significant decline is likely with most of the hit being seen in the three months ending June, corresponding to the lockdown in the first quarter of the financial year ending in 2021 (Q1FY21).

Revenue was two-third lower compared to the same period last year for major players. This included a 76 per cent decline in advertising revenue and a 32 per cent decline in circulation revenue. The shock led to losses on earnings before interest, taxes, depreciation and amortisation (EBITDA) basis; a key measure of how well businesses are doing.  

“The decline was higher for English print media players than Hindi print media players. Given that advertising revenue remains a key profitability driver, the players reported EBITDA losses during this period,” it said.

There is a bounce expected next year, but it is because of a lower base in the current year (see chart 1). The revenue could still be lower than FY20 even after this rise, according to the note. The changes in advertiser preferences could add to the pain as more people depend on digital media, which has shown robust growth over recent years (see chart 2).

“Structural changes such as focus towards digital mode of advertisement by...(companies)...could restrict the recoverability and growth, and the same remains..key...for the sector,” it said.  

The major sectors which advertise in print media include fast moving consumer goods and the automobile segment. The top two account for a bulk of the advertising (see chart 3).

The rating agency maintained that the credit profile remains healthy because of the liquidity position and strength of balance sheets of key players.

“...sway towards the digital platform could restrict the full restoration of profitability,” it added.