Print Ad revenue to reach pre-pandemic levels in FY24: CRISIL

According to CRISIL, print advertising revenue is projected to experience substantial growth of 15 to 17 percent, nearing its pre-pandemic performance in the fiscal year 2024. An examination of CRISIL-rated print media companies, representing over 40 percent of the sector's revenue, reveals that increased advertising expenditure from corporate entities in key industries, coupled with augmented government ad spending due to upcoming state and general elections, will likely propel the revenue of the Indian print media sector by 13 to 15 percent, reaching approximately Rs. 30,000 crore in FY24.

The sector's enhanced revenue, combined with a decline in newsprint prices, is expected to result in a profitability surge, with the sector's profitability predicted to reach 14.5 percent this fiscal year, as stated by CRISIL's analysis.

In FY2021, the sector witnessed a 40 percent decline in revenue, splitting 70:30 between advertising and subscriptions, due to the impact of the pandemic. However, FY2022 and FY2023 exhibited notable recoveries with approximately 25 percent and 15 percent growth, respectively, according to CRISIL's statement.

Naveen Vaidyanathan, Director at CRISIL Ratings, stated that the consistent domestic demand for fast-moving consumer goods, retail, apparel and fashion accessories, new automobile launches, growing preference for higher education, online shopping, and increased real estate sales—sectors contributing around two-thirds of the print media ad revenue—will sustain the growth momentum of advertising revenue. Additionally, he added, the government's augmented ad spending, accounting for one-fifth of the sector's advertising share, in light of the upcoming elections, will further drive growth. "Hence, we anticipate 15 to 17 percent growth in ad revenue, nearly reaching pre-pandemic levels this fiscal year."

The analysis reveals that physical newspapers experienced an 8 to 10 percent growth in subscription revenue in FY22 and FY23. A further growth of 5 to 7 percent is expected in the current financial year.

English newspapers, which have faced significant digital competition compared to regional publications, have begun monetizing premium digital content and are witnessing favorable traction, as stated by the ratings agency.

Rounak Agarwal, Team Leader at CRISIL Ratings, added that a substantial increase in newsprint prices impacted the operating margins of print media companies in the previous fiscal year, despite the revenue growth. However, newsprint prices have recently declined by as much as 15 to 20 percent from last fiscal year's peak. Alongside revenue growth, this decrease should contribute to a profit increase of around 14.5 percent this fiscal year. Over the medium term, margins are expected to remain healthy, albeit below the steady-state margins of over 20 percent observed in the past, he explained.