TV Today Network’s Q3 FY2022 revenues up 15.4% YoY to Rs 2,580 mn

TV Today Network’s Q3 FY2022 revenues grew 15.4% YoY (up 16% versus pre-COVID levels and 14.2% QoQ) to Rs 2,580 million, which was better than estimated. This was largely led by healthy performance in the digital segment, which has contributed 21% to the revenues; even as TV broadcasting segment (which contributed 77% to the revenues) grew 6% YoY to Rs 1,978 million.

Overall, Q3 FY2022 EBITDA margin declined 140bps YoY to 33.2% (up 690bps QoQ), mainly on account of production expenses that rose 38% YoY, resulting in a margin decline. Profit after tax (PAT) for Q3 FY2022 rose 12% YoY to Rs 615 million (up 64% versus pre-COVID levels and 31% QoQ), led by strong revenue growth. Depreciation and interest expenses were largely stable.

In its analysis, Elara Capital estimates TV Today Network to post FY21-24E revenue CAGR of 15% in the TV segment given: 1) market leadership in the Hindi news genre, 2) news genre being the least impacted by digital ingress due to live content, and 3) little/no negative impact of NTO 2.0 given strong recall.

According to Elara, the Digital segment is the silver lining, with its revenue contribution seemingly spiking 450bps in the next two years to 24% through to FY24E (29% revenue CAGR). This may be led by:

1. A platform-agnostic approach
2. Broad-based growth in own app, YouTube and social media
3. Increased penetration and consumption-led growth for video content in India

The digital segment remains highly profitable with ~25% EBIT margin due to the platform-agnostic approach and better segmental growth. This should aid overall profitability. Also, TV Today Network enjoys a healthy cash balance of ~Rs 7.5 billion, which may be used for higher dividend pay-out/ acquisition. Also, there is potential for sharp growth in FY25, led by the General Elections (which leads to ~5-6% higher growth), Elara Capital said.