Strong topline growth of 14% helps Music Broadcast PBT jump by 45% to Rs 24.9 cr

Private FM radio broadcaster Music Broadcast Limited (Radio City) has reported topline growth of 14 per cent YoY at Rs 87.02 crore for the third quarter ended December 31, 2018. The growth in topline was equally driven by volume and realisations. 

In Q3FY19, EBITDA grew 23 per cent YoY to Rs 28.59 crore, while the margins stood at 32.9 per cent, an improvement of 223 bps YoY. 

Profit Before Tax (PBT) grew by 45 per cent YoY to Rs 24.93 crore at a margin of 28.7 per cent improvement by 607 bps. 

Music Broadcast saw 11 per cent rate hike in legacy markets. MBL’s 28 legacy stations are running at 38 per cent margin, while some of its core markets are running at 45 per cent margin levels. 

For the 9 months, topline was recorded at Rs 242.84 crore, a growth of 9 per cent YoY. EBITDA growth stood at Rs 81.21 crore, a growth of 16 per cent YoY, with EBITDA margin at 33.4 per cent, an improvement by 208 bps. PBT recorded a growth of 28 per cent YoY at Rs 67.37 crore, margin at 27.7 per cent improvement by 413 bps. 

Commenting on the results, Apurva Purohit, Director, Music Broadcast Limited, said, “I am very happy to share with you that we have delivered not only a higher growth than expected with revenue at Rs 87.02 crore, a growth of 14 per cent YoY, but this has been the best ever quarter of absolute revenue performance for MBL. This growth was a result of:

  • A rate increase of 11 per cent in legacy markets
  • Inventory utilisation in the Phase III markets improved to 53 per cent
  • Festive advertising kicking in and, sectors like Government, E-commerce and Auto growing

On an average, our inventory utilisation for 39 stations moved up to 60-70 per cent.” 

Purohit further said, “Our PBT is at Rs 24.93 crore with a growth of 45 per cent YoY in Q3FY19. PBT margins expanded to 28.7 per cent from 22.6 per cent, a growth of 607 bps YoY. As you can see, the PBT has grown three times the revenues; reiterating the advantage of our fixed cost model, and thus operating leverage playing out which we believe is indicative of the future as costs getting normalized in new stations.” 

“We stand at a healthy operating run rate for FY 2019 with revenue at Rs 242.84 crore for 9M FY19. EBITDA already stands at Rs 81.21 crore with margin of 33.4 per cent. PBT for 9M FY19 is Rs 67.37 crore with margins at 27.7 per cent. PAT is at Rs 43.26 crore, with a growth of 22 per cent and margin improvement from 16.0 per cent to 17.8 per cent,” she added. 

Keeping in line with the group philosophy of rewarding the shareholders, MBL has successfully completed the buyback of Rs 57 crore, buying 1,745,079 shares at an average price of Rs 326.61 per equity share, thereby representing 99.99 per cent of the maximum buyback size in this quarter. Also, MBL is seeking approval from shareholders for sub-division of shares from existing face value of Rs 10 to Rs 2 per share. 

Purohit further added, “It gives me great pleasure to tell you that we have delivered a double digit CAGR growth of 15 per cent in revenue for the last three years, which is almost double than that of the industry, as reported by various studies. This growth has been as per our commitment to all our shareholders and as promised during the IPO. Again, Profit before tax has outpaced the growth of revenue, showing a CAGR growth of 34 per cent in this period too.” 

According to her, though the economy was affected by certain macro-economic headwinds in the last few quarters, the economy is clearly seeing signs of revival as spending across categories and government increases in the coming months. “Going ahead, we are confident that we will be able to sustain our current growth level and grow our operating margins. Further, we believe that the radio industry is a nascent and efficient medium for advertisers and is poised to benefit the most from the upsurge,” Purohit affirmed.


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