Shemaroo Entertainment (NSE:SHEMAROO) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 and FY 'twenty seven Conference Call of Shemaroo Entertainment Limited hosted by Valorum Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Ms. Purwang Jain from Valorum Advisors. Thank you. And over to you, ma'am. Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Purwang Ji Jain from Valorum Advisors. We represent the Investor Relations of Shemaroo Entertainment Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year twenty twenty seven.

0:53 Before we begin, a quick cautionary statement. Some of the statements made in today's call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks.

1:39 We have with us Mr. Hiren Ghada, CEO Mr. Arya Chakravarty, COO and Mr. Ashish Gupta, CFO. Without any delay, I request Mr. Ashish Gupta to start with his opening remarks on the financial highlights. Thank you, and over to you, sir. Thank you, Prawangi, and good afternoon, everyone, and welcome to our earnings call for the first quarter of the financial year twenty twenty seven. Let me first start by giving you some of the key financial highlights, after which our CEO, Mr. Jain Gera, will give you some operational highlights for the quarter under review. For the first quarter of the financial year twenty twenty seven, revenue from operations stood at approximately INR 132 crores, reflecting a 6% year on year decline.

2:32 The company significantly narrowed its EBITDA loss to around INR 2 crores compared to INR 56 crore in the corresponding quarter last year. Net loss also materially reduced to approximately INR 8 crores. With regards to the new initiatives, expenses in the first quarter of the financial year 2027 amounted to around INR 20 crores. Adjusting for these investments, the EBITDA for existing operations for the quarter would have been around INR 18 crores. The Digital Media revenues for the first quarter stood at approximately INR 56 crores, listing a year on year decline of approximately 17%.

3:19 Traditional media revenues for the quarter were around INR 76 crores and up 5% year on year. Now I would request our CEO, Mr. Jain Garra, to give you the operational highlights for the period under review. Thank you, Ashish, and good afternoon, everyone. This quarter marks an important milestone in our transformation journey, representing the quarter following the successful completion of the inventory charge off initiative that we embarked on nearly ten quarters ago. For the quarter under review, while revenue declined marginally, the EBITDA and PAT loss reduced significantly. Digital revenue for the quarter declined by 17% year on year as select B2B syndication deals were deferred on account of geo political uncertainty coupled with the inherently lumpy nature of this B2B side of the business.

4:15 This was partially offset by healthy growth in our consumer business driven by fresh content, stronger audience engagement and improved advertising monetization. The traditional business registered a 5% year on year growth with the closure of select B2B licensing deals, which more than offset the impact of a subdued advertising environment. Given the ongoing bar blackout, continuing macroeconomic pressure and geopolitical tension, the overall advertising outlook for our traditional business is expected to remain subdued in the near term. On Shemaroo mi Gujarati, the platform acquired the OHO Gujarati catalog in April 2026, adding over 22 Gujarati original web series. We also released 10 new titles including during the quarter across movies, web series and plays, including the original web series Kajodu and the world digital premier of the movie Jalebi Rocks.

5:13 Other prominent web series released during the quarter include Vittal TD Season one, KARAK METI Season one and two and Cutting Season one. On YouTube, the flagship channel SHEMAROO FILMY GANNES surpassed 74,700,000 subscribers, while SHEMAROO Entertainment crossed 61,900,000 subscriber milestone this quarter. Across entire portfolio of channels, the company garnered approximately 9,000,000,000 views during the quarter reflecting sustained digital engagement. On the syndication front, the company became the worldwide digital and satellite distribution partner for millennium action thriller Kartalan. We are also very proud that our first AI powered brand campaign, Kindness, Bad Eye, Goodness received industry wide recognition winning the Baby Blue Elephant at the Curious Creative Awards twenty twenty six and a bronze at the Good Ads Matter Awards.

6:08 These accolades reflect our commitment to combining creativity with technology to build meaningful consumer engagement. In conclusion, as you all know, it has been a tough couple of years not only for Shemaroo, but for the overall industry. Over the last few years, Shemaroo has withstood the toughest times the industry has ever witnessed. In fact, the company has invested heavily during this period in its people, processes and offering, thereby building a much agile and sustainable company for the future. With that, I now open the floor for question and answer section. Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. First question comes from the line of Rehansaryat with Greenwich Asset Management. Please go ahead.

7:24 Yes. Good afternoon, Villa team. So I have just two questions, also on the margin side. Despite your 5.6% decline in revenue, EBITDA improved sharply to a loss of just INR 18,000,000 from a loss of INR 55,000,000 last year. So excluding the INR 196,000,000 investment in new initiatives, what would have been the normalized EBITDA margin for the quarter? And more importantly... Excuse me, Rehan. Can you just repeat the question? Your line is not very clear. Yes, sure. I'll just let's say my first question is around your EBITDA margin side. Despite 5.6% decline in revenue, EBITDA improved sharply to a loss of just INR 18,000,000 from a loss of INR 55,500,000 last year.

8:10 So excluding if I exclude the INR 196,000,000 investment in new initiatives, what would have been the normalized EBITDA margin for the quarter? And what revenue threshold is required for the foundation of stream deliver positive EBITDA without reducing those investments? This No. As we as Ashish shared in the opening comments, if we exclude the EBITDA if we exclude the investment, the EBITDA would have been around INR 18 crores. That's that's what I have told you. Yeah. Yeah. Yeah. Yeah. So... No. No. Like, I repeat my question? I'm...

9:00 Actually, your line is a little unclear, so I'm not able to fully understand the question. If I... Have asked that only that if if I remove that INR 196,000,000 investment part, so our EBITDA loss is just INR 18 crore. So what would have been the normalized EBITDA margin I'm asking for the quarter? Yes, EBITDA gain. Our EBITDA gain would have been INR 18 crore. So currently, with this initiative, our EBITDA loss is INR 2 crore. Excluding these investments, our EBITDA gain would have been INR 18 crores. Yes. And sir, just I'm asking on the future part, like what revenue threshold we have to maintain to deliver positive EBITDA without reducing growth investment? Yes, this is my full version. No. So ultimately, it's not about that. I think it's essentially, it is a content monetization. So as our content monetization is growing, and we have been working on the parallelly in the last few quarters on a lot of operational efficiencies. So it's a combination of that. So margin growth or margin improvement is combination of revenue increasing and cost reduction. So it's not only on revenue side.

10:17 Also, one is increasing revenue and obviously, as Harin said, reduction of cost. But what is also important is the mix of the revenue because all revenues don't come at similar margins. Are some revenues that come at very increased margins. So there's also a mix angle to it. So a lot of factors will be at play, but we can't really put a number on terms of a threshold because maybe at some times, the lesser revenue also may be profitable And higher revenue also may be not profitable depending on what is the kind of mix. Think that is that is problem. Okay. Definitely. I understand this part. And sir, like, second question is around your content monetization strategy. Shemaroo is of the largest content libraries in India. The revenue trajectory has remained under pressure over the last few years. So how much is the content library today remains commercially under monetized?

11:10 And what incremental monetization level beyond additional licensing do you expect for moderately improved asset productivity over the next period? So there are two parts to this. I think it's not about under monetization of the library. I mean, today, with the kind of digital distribution that is available at everyone's back end call, we have fully utilized our library and not only fully utilized, we have a large I mean, today, are generating, as we have shared earlier in the call, 9,000,000,000 views for the quarter. That shows that there is a very strong traction of the content on the digital media side. So it is not about rest so assured that there is no underutilization of the content. Yes, there are two factors over here, which are impacting.

12:12 One is the fact that traditional media monetization has been steadily and gradually reducing over the last about two to three years. And of course, that has kept the overall monetization of the library at a in fact, that part of the revenue stream has been on a degrowth side. But on the other hand, the digital monetization on various platforms like YouTube, Meta or many other subscription based platforms or international platforms, it has been on a growth trajectory. So it is actually even net of that, the good thing I would say is that the content library continues to, I would say, connect and track well with audiences.

13:07 So because of that, it has ported extremely well on the digital media side, on the digital front end. Some of our market content titles like Welcome, Jabi Med, Kirei Rafferi, etcetera, etcetera are top performers on the YouTube or in fact on most platforms that they are present on. So particularly on the digital side, in fact. So that is actually giving us a very good edge and a very good futuristic predictability of the revenue. Okay. And just last one more question from my side. Like in Numeric term, you have to give you have to quote some percentage for growth of revenue and EBITDA for going forward for next three years?

13:58 Next how many next three years? Yes, three to three years. So I think definitely, are aiming at a double digit plus kind of growth. One has to see the industry context where traditional media has been de growing and digital media has been growing recent growth of digital media has been roughly low double digit kind of number. We are intending to outdo that by at least couple of percentage points overall. So blended growth I think should we should be at the aim is to be at more than I mean at a healthy double digit kind of a growth rate.

14:47 Okay. Okay, sir. Thank you. I'll join again later. Thank you. Our next question comes from the line of Tanmay Gulisha with three sixty one Capital. Please go ahead. Hi. I just wanted to ask about three things in terms of the numbers. One, is there any debt reduction plan? And if you could describe what that is going to look like? A guidance on when we can see a P and L profit and the revenue breakup for FY 2027 in terms of digital revenue, traditional business, etcetera? So on the debt side, I'll just go one by one. So on the debt side, I think by the end of the year, so we may have quarterly ups and downs and particularly given the whole geopolitical and other situation, there could be a little here and there around. But we definitely have a debt reduction plan for this year. Now how much it will be? Right now, it's very difficult to say because we started the year with this whole geopolitical uncertainty and that has kind of got compounded last one month with this park blackout. So, ratings blackout. So, because of which definitely there is an impact on the traditional media revenue on the syndication side on many it has a secondary impact on

16:19 the traditional media or television linked businesses. But notwithstanding that, I think we are looking forward to a very healthy second half of the year because there is a festive season. There are lot and lot of operational gains and the digital engine is firing quite nicely on the consumption side. So I think all of that put together, I think I'm unable to give you an I mean, it's no point that I give you a target or a number right now and then it doesn't hold by the end of the year. But we have a reduction plan. Your second question was on profitability. Profitability guidance, yes.

17:05 Yes, profitability. So let's put it that way that given combination of the fact that digital media continues to grow along nicely and our content has quoted extremely well on the digital media. I think that's a revenue stream and a cash flow that is steadily on an upward trajectory. And that combined with the fact that our overall investment plan for the last about almost three quarters has been significantly focused or pivoted towards the digital media and reduced from the traditional media. I think and the third point is the operational efficiencies that, again, we've been working on over the last particularly last three quarters or so. I think the results of all of that will be visible. Every quarter, I think, we should be seeing an improvement on a quarter on quarter basis. Now when it will tip into a profit is difficult for me to pinpoint.

18:09 Let me if I have to give a conservative view, the aim will be for the year to be EBITDA positive at least. And yes, hopefully, year hopefully, I think we are very confident that next year, we will be bottom line positive also. Got it. Sorry, the revenue breakup, yes. So as I said to the previous caller also, digital, we are anticipating or we are looking forward to a double digit growth rate. And traditional should probably be flat to yes, I would imagine it will be flattish, not a degrowth. So hence, leading to overall double digit kind of top line growth.

19:04 Okay. Got it. Thank you. I'll get back to the other questions. Thank you. Our next question comes from the line of Guni Desai with Total Capital. Please go ahead. Hi. Good afternoon, Kiran. So my first question is, so we talked about the digital media focus and overall pie increasing on the digital media side in last call. So because that segment is growing faster as an industry. Sir, but if I look at the growth on the digital media side for our own business, FY 2024 to FY 2026, have grown at 19 odd percent.

19:51 So how should we look at the growth in this business given the scale or the size at which we are and content like the V that we have, isn't it fair to kind of aspire for 20% plus kind of a growth? What are the challenges to grow at 20%? No, I think as I was talking to the previous question also, the context here is we are finally in a industry environment, right? So I may want to grow in a certain way and all of that. The question is that what is the underlying growth that the industry is offering me. And we are our attempt is always to grow faster than the industry.

20:41 Now in the last two years, actually, the if you see the underlying growth rate has itself been low. So yes, we have not grown at that pace in the last two years on that side. But there is also an underlying context because of various, various reasons. Now we can go into some of those reasons, but the idea has been to be growing at faster than industry growth rate. There is another angle to the whole thing is that growth at what cost is another question. So the idea for us also is to maintain a profitable growth rate and not burn out. I mean, it's very easy for me to if I take, say, example of Shemaroo, we can scale up by burning significantly more amount of money.

21:37 We can scale up that number. But then that will burn a big hole on our cash flow and balance sheet. And few months or few quarters later or maybe a year later, we would ourselves scratch our heads and say that is this business worthwhile, why are we investing in this business. Rather, what we are doing is we have a strong belief in this business. We have a whole position with a very strong leadership and share of mind of consumer as far as the Gujarati Entertainment is concerned. And keep building and bringing in more efficiencies. So balancing growth and profitability, I think is an extremely important part of that, managing everything within the available cash flow and balance sheet kind of thing. I think that is the second consideration that will always be linked to growth.

22:42 Got it, sir. So sir, is it again general our general understanding is and correct, if we are wrong, but that let's say, if aside Shemaroo me, which anyway all the OTTs are kind of spending money and burning money there. But net of that, the digital business is a high EBITDA margin business. Many of them do 25%, 30% plus kind of an EBITDA margin business. Is that a fair way to think about it? So, it depends on what which part of the business value chain you are residing in or you're working on. So if you are in the consumer facing side at this point, no one is making money, right? So which is where Shemaroo me is.

23:32 Then there is a mid segment where you are owning content and aggregating and licensing content across the industry wide kind of platforms, whether it's Amazon, whether it's Shemaroo sorry, YouTube or Meta or many other even internationally, etcetera. Now over there, it depends on what is my mix of content. So, if I have legacy content, my margin could be as high as 80%, 90% because the underlying cost is all written off, charged off, paid off, everything.

24:19 But for what I acquire new, the margins could be zero, it could be minus, it could be marginally positive depending on whether I overpaid, overpaid or at what rates I have acquired. So, the blended margin over there is again a function of what is my mix of existing or legacy content versus new kind of content kind of a thing. And then third part of this value chain is on the creation side, where I you know, there is more you can say like what it was TV side of the things where it was production work for hire kind of a thing.

25:04 So, there, there could be some fixed margin kind of business, which could be in the range of between 10% to 15% or even 20%, depending on who it is. So, I think it's very varied. I wouldn't say it all depends on which side of the value chain you are playing. Okay. Got it. So sir, is it safe to say that the YouTube part of the business is the highest margin business followed by syndication and followed by this kind of a work which we do on a kind of pre approved basis. Is that a hierarchy wise, that's a fair way to think? I would I would put it actually again based on... As I shared earlier that the...

25:52 What is the win... What is the... What is my starting point of the library ownership? What I have already paid for and charged off is highly profitable irrespective of whether it's on YouTube or on syndication. And what I have freshly acquired, there is a cost I am bearing for that. And whatever IRR, etcetera, I have worked on, I will kind of deliver based on that. So, again, whether it's YouTube or syndication, it doesn't matter. So, even for us, for example, say, I was talking of, say, welcome or something, where the licensing if I have licensed welcome to some platform within India or internationally, etcetera, then the margin is significantly higher because it's already paid for.

26:46 Same way welcome on YouTube is also a higher margin, but not necessarily a new acquisition on either of these cases. So, Sunil, I think, let me just put a bit of color to I I think what Rahul is saying absolutely right. I think just to put a color to it, margins depend on the kind of content that we are monetizing, whether it is through digital video or through syndication. The length the the length of the content in which that we have monetized... That we have charged off or amortized, that is the basis on which the margins come. I mean, if we have... It's very it would be interesting that YouTube will deliver high margins. Now for tomorrow, if I acquire a content very recently of a new content, you know, and we put it on YouTube, you know, there is a, you know, which we pay for it, there's a there's a charge in terms of what kind of IRR at which we have acquired it. It's not that the content has been acquired by us alone. There are lot of other competitors in the market. So the pricing of the new content that we get on YouTube is a competitive price.

27:51 So in that, the margins will not be the same as what we will get in terms of monetizing, say, older content, which we have charged off to a larger extent. So it's a mix of the kind of content that we are monetizing rather than the platform, both on syndication as well as on YouTube. Got it. Very clear. I think I have more understanding to get, but I think probably that can happen offline. The sir, on the new initiatives, I think we have guided that we will reduce it by more than 50% in FY 2027 compared to FY 2026. And I assume a large part of that will come because the traditional media side, we will kind of contain our burn.

28:37 So does it mean that we are kind of scaling back and some of the channels will be kind of shut down, not renewed? How will this come? And is this 50% plus reduction kind of on track for the current year? I think, Puneet, yes, you are on the right direction. Because as we said in the beginning, right, our focus on our investments, whether it is not just money, but in terms of all investments, whether it is AI, people investments, everything is towards the new digital business. So the new initiatives on traditional is obviously something which will get scaled down. Whether it is in terms of channel scale rationalization or whatever that we'll come to know as we go ahead.

29:29 But for example, new creation of content is something which we have already scaled down a bit a lot in the traditional business. While the new creation of content is getting new creation, acquisition of content is getting dialed up in the digital business. So yes, the movement more towards that as we go forward because of the kind of stressors that we are already aware of. And to the second part of the question, yes, I mean, as of now, we are on track to for what we have We are well on track. Yes, in fact, we are well on track for that. Thank you. Our next question comes from the line of Chirag with Keynote Capital Limited. Please go ahead. Thank you for the opportunity. I have joined the call late, so if my questions are repeated, please bear with me.

30:20 Sir, I just wanted to understand, as now our rationalizing of inventory has been completed, and this is a new normal. At an run rate of INR 600 crores top line today, we would be roughly making INR 50 crores to INR 60 crores of EBITDA. And if I'm not wrong, we have to service an interest expense of about INR 32 crores roughly on an annual basis. So just wanted to understand, is this understanding correct about how I'm looking at it right now? And down the line, as we would be spending more on content, that would be the real kicker for the future revenue growth? Okay. So, you joined a little late. We were talking about the margin profile discussion on so basically, without giving much more color, essentially, the it's not at this point, it is I would say it is not exactly one to one linear correlation of top line to margin.

31:30 I think there are three, four factors at play here. First is the fact that all business that we do or every content is not necessarily similar or same EBITDA margin. So our focus is to juice out and mine more and more of the content, which is already paid for and charged off because that has highest amount to the EBITDA overall margin. Second driver is on the cost side, which is where over last two, three quarters, there has been a significant operational efficiency drive. And hope we should see the impact of that over the next few quarters as we go along.

32:24 The quarter by quarter improvement on that should be visible. So it's not a straight line answer, but yes, I mean, ultimately, at some point, we have we hope to far exceed the kind of numbers you're talking of. Got it. Sir, one thing I would like to understand is on the new initiatives that we are taking related to the OTT platform. If I'm able to understand the initial business curve where we spend a lot on tech, where we spend a lot of employees, the initial spends that take place, it takes certain five year time span if we continue to build a new inventory on the platform. Always new inventory is something that drives subscriptions and continuous form of subscription on the OTT platform.

33:10 Just wanted to understand, as per you, as you have started it a little a couple of years back on OTT specifically, So what will be the time span for us to achieve normalized expense and normalized employee spends to achieve a breakeven level on the OTT platform specifically? Hello? Ladies and gentlemen, the management line has been disconnected. Please stay connected while we reconnect. Hello. Ladies and gentlemen, the management line has

34:55 been connected again. Over to you, sir. Hello? Hello? Yes. Sorry, Chirag. You were asking, and I don't know what happened. Somehow it got disconnected. No, no. I'll repeat my question. Yes. So this question is specifically, sir, related to the OTT platform I'm trying to understand. Business has its own initial curve where we spend a lot on tech, a lot on employees to deploy the platform. And there is a huge initial CapEx required to set this up. However, additional cost keeps on reducing with time. So built and content is the real driver for the newer subscription that comes on platform. So I just wanted to understand, as per you, how long will it take for us for this bigger CapEx to keep on happening on the platform?

35:46 And when can we look or when can we think about that this platform will reach to a breakeven level? Okay. So to kind of correct your understanding a little bit, a lot of the spends are actually, I would say, variable in nature, and they are ongoing. So tech, for example, yes, there is an initial build out, but then there is an ongoing improvement. Every day, every literally every day, every week, there is some integration, some payment gateway something, some new feature, something or the other is keep. So, there is a constant and that's just one example, the team that works on it, the customer service etcetera etcetera, all of that is a continuous OpEx kind of nature.

36:41 Content investment also once so thankfully we had a very good starting point. In fact, that was our right to as a starting point on Gujarati. So it was not any significant CapEx to begin with. But on an ongoing basis, there is a content investment as we shared even last quarter, we have released all these movie web series and we acquired the OHOOO library etcetera etcetera. So firstly, to correct the understanding, that is one part. Coming back the larger two spends on this business are around customer acquisition and content. So the customer acquisition cost or CAC as you may call it, which is a combination of ATL above the line marketing as well as performance marketing for on from a sales point of view, that's one large part of the revenue sorry, one large part of the cost.

37:49 And content is the other large part of the cost. Now, how does this business take shape in the way forward? I think what is important is that how are we shaping up in terms of capturing the lifetime value of a consumer. So if we are able to, for example, build the lifetime value. Now for that, what we need to do is essentially keep pumping good quality content and make the consumer come and consume more and create it make it a part of his daily habit, daily regular routine platform that the consumer keeps visiting because then the loyalty and the lifetime value kind of gets captured.

38:38 I would say, as far as Shemaroo is concerned, we are actually at a in a very, very good position with the Gujarati audience. In fact, we are probably one of the very uniquely placed platform, which has a two year plan. I don't I haven't seen a two year plan virtually anywhere. I don't think any other platform in India offers a two year plan. We offer a two year plan, we have a decent uptake on that, which shows that the consumer trusts the brand, a, and is willing to put in money for two years. And b, trusts the fact that today while there is no visibility, right, I cannot tell the consumer that in December I'm going to give you this content and next March I will give you that content.

39:24 But he trusts also the fact that we will curate and offer formidable and useful content for which the consumer is willing to pay today for two years. I think that is a very big thumbs up for us in this journey, which gives lot of consumer which gives us lot of confidence as the consumer believes in us. So finally, the profitability will be based on are we able to bring in more renewing customers because the cost of acquisition kind of is not applied for the renewing customer than our cost of acquiring fresh customers.

40:10 And while we haven't reached that point yet, and it is still sometime away, I would imagine we are at least about two years away from that point, but so would most other OTT platforms be what my sense is. But the kind of love that we are getting from the consumer on our platform, the kind of renewal rates or the kind of traction on and the kind of common, I would say, reference to Shemaroo mi for Gujarati among Gujarati consumers that it has become a default Gujarati entertainment platform for the consumer. I think that gives us a lot of confidence that we are on the right track. We are doing the right thing.

41:00 And yes, I mean, that's how I would put it. Got it. So it totally makes sense because our background was not related to the earlier Pilates movie. We are penetrating towards that. What I was able to that if I look at the regional context, specifically Indian market, South Indian markets related to movies and all are a big chunk to the overall growth in the Indian movie space, which does not get really highlighted growing at 20 plus percentage, if I'm not wrong, that this particular industry. Just wanted to check this thing. Have you started providing the data related to DAUs, MAUs, paid or total subscribers that are there on our platform?

41:47 No. No. No. No. We have not been. And I I... We... At this point, at least we don't intend to. In fact, most of the platforms have... Globally also, they have stopped giving a lot of this data on a regular basis because everyone realized that, you know, it's a wrong metric to similarly look at. There are many, many more factors that drive the health of a platform. Okay. And can we know that what kind of revenue the platform is bringing today? Sorry, as I said, unfortunately, at this point, we are not... So I think, Jiraj, I think we should understand that we will, first of all, don't give out any of the numbers on Shemaroo. But it is on a very strong revenue trajectory is all we can say.

42:37 Strong double digit revenue growth trajectory growth trajectory, and it has been for quite some time. And as Hiren said, we can it's a it's a we are a fully SVOD platform. So hence, further scale can be achieved, but we have to be very... We are very prudent about the kind of one that we that we also do. So we wanted to grow in a healthy way. And on your profitability question, I'll just add one small thing is that the objective here is to build as big a permanent life base as possible. And once that is there, keep giving as good a content as we can, keep the consumer experience high so that the churn is minimized.

43:23 Once the churn gets minimized, the route to profitability is to build a significant base and then to reduce the churn. That's the route to profitability, and it is some distance away, but we are at it. Understood. Understood. Will it be fair to assume that once we achieve a certain size like INR 100 crores only Yes. I was just trying to understand. It is fair to assume that currently, we are on a growing stage. We are growing in double digit. But generally, after achieving a certain size, generally, companies start giving out the numbers. Like if you are reaching, let's say, a mark of 100 crores, then and then only we will start providing the OTT platform revenue numbers at least on a separate basis.

44:15 Till then, it would be like it is better to not get it out. It's too early to speculate. Think, right, it as it goes. Fair enough. Just one last question from my side. What I was able to see is that if I look at a longer term picture of the YouTube view that you probably gave through a particular line chart, I was able to see that it has roughly become flat for us. So any particular reason that you are finding that that is the reason that the views on a daily basis, on a quarterly basis have become flat on YouTube for us? Or is it like once the additional content will go on the platform, we can expect this to continue to lend up?

45:00 So, Shemaroo, YouTube... So while whatever you're seeing is flat, so YouTube views have a lot of components to it. While, yes, our views remain very strong, we had 9,000,000 in the quarter, as we said. Views keep going up and down to various phenomenon, which is finally another viewership platform compared to everything else, right? So there's a seasonality attached to it, depends on what kind of events are happening around it. And there are various components around it, right? So it is there is a Hindi film content, there is kids content, there is devotion. There are various categories, right? On the categories that we play, we see significant we see good traction on our views, and we also look at something called the viewership share. Our viewership shares have been very strong. At an overall platform level, the platform views keep going up and down, and we keep riding that wave. And we keep looking at our viewership shares, which remain very strong and very good. So it's not something which we are concerned about.

46:00 We keep looking at it. Obviously, there's a very sharp focus to it. We keep adding content to it. There's a lot of content addition, which has happened in the quarter, which we'll keep seeing its output in terms of better views and which will convert into revenues in the coming quarter. So it's not something which is a big worry as of now. It. And any update Thank on the you, Shailaj. I'm sorry to interrupt you, but you may please re join the queue for more questions. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer all the questions from the participant, we kindly request you to please limit your question to two question only per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Tunil Desai with Total Capital. Please go ahead.

46:54 Hi, sir. Thanks for the follow-up. Sir, if I look at a very longer term trajectory of Shemaroo, it has moved kind of offset the margins have oscillated between 29%, 30 on a positive side to negative side, 30%. And we have no way to understand what is the steady state margin because the business Salfa has gone on shift to a very different level. We have kept on investing through P and L. So how should we think about margin because this quarter we did around net of new investment, we did around 14% margin. Now going forward as we look at next two years, should we assume steady state margin of 17%, 18% because there has to be some benchmark, right? We can't be oscillating between two extremes. So what is the steady state margin profile that you guys are thinking is appropriate for the business that you would build in next two, three years?

47:59 I agree with you. And net of I mean, so all the points that you made are very valid that one is the fact that there has been a significant shift over the years in the revenue mix itself in terms of traditional to digital. And at the same time, the investment has continued. We if you ask me personally, and I think at a company level, coming out of a couple of black swan events like the bad blackout or the geopolitical kind of situation and all of that.

48:48 Considering all of that, I think we have been able to manage margins that are still at a decent level. Are we satisfied with this? Definitely not. I think our intent is to move significantly higher on the margin. And which is what I was referring to earlier that we will there's a lot of operational changes. There are significant dialing down doubling down on the digital investment and all of that. So, which will ultimately yield to a look to a higher better margin improvement. I think if I see a two, three year perspective, I think definitely upwards of 20% EBITDA is something that we should aim for. I don't know whether we will be able to achieve that or not, but definitely something that we would aspire for that. One small clarification, is that the negative margin that you're talking of is primarily on account of the accelerated charge off of the content. But otherwise, as far as the core business is concerned, it has always been on a positive margin trend.

50:04 No, I get that point. But on the reported basis, all those things, the charge offs, the new investment, all those things... So I'm saying from there are so many moving parts there. Started my point. No, no. No, I understand. Just a clarification that the 20% number that you're saying is on a reported basis, right, net of investment, everything? Net of investment, I think let's currently not split head for that right now. But I think suffice to say that aspiration should be of a significantly higher margin. We have already been there always. It's not that we can't go there. It's just we have there are tectonic shifts that we are all adjusting to. And I think we should come back because, again, to repeat back what I said earlier, our content is tracking extremely well on the digital front.

51:01 So, the library that we have invested is totally digital ready or digital kind of tracking. Sunil, this is Anbu here. I think I know while the point which you have said is very valid in terms of the last two, three years, you're talking about whether margins are varied from 50 to minus 50 and all that. I mean, you're right. But if you have been and since I'm sure you're tracking the media world, the media industry last two years and today are two different industries, right? I mean, I'm sure you're aware of that. There was a very large component of traditional TV business, which which is is drastically coming down quarter on quarter. And today, the all reports with us all weekly reports, everything is there out of the in the public domain.

51:52 So the business model of the media world has changed. And we are also going through this change. Of course, there was an additional impact of the charter, which you are all aware of. And hence, the new model of the business is the focus is completely on digital, but the margin structures are very different from what it used to be in the traditional business. So it's also a structural shift happening in the business, and we are aligning ourselves to it. When will we achieve that aspirational double digit 20% EBITDA number is a point of limit, but we are on the way, all I can say. Point taken, point taken. My last request, there are too many things which are not disclosed and hence very difficult to figure out from an analyst perspective, how the business is moving, how the numbers are panning out across segments.

52:57 I think slightly more disclosure or more granularity will be very, very helpful. That's my only question. Okay. While so I mean, we are fully committed to higher standards of disclosure. We are in fact, if you see, we have added a lot of color over the last few years to the overall disclosure. But happy to understand more offline and see what we can provide out of that. If it is easily doable, we have no problem in sharing that. Our next question comes from the line of Akshay Dargy, an individual investor.

53:53 Am I audible? Yes, yes. Sir, my question is on inventory, which has been released over previous quarters. Are there any remaining write down risk or further contained traditionalized trend? No. Now we are in a normal charge off cycle. So whatever as per consumption, as per our policy, that is being charged off accordingly. Okay. And what is the debt as on date? We are at INR No, we closed the quarter at INR $3,311.11 crores. What is the inventory, isn't it? Inventory, we closed the quarter at INR $3.48 crores.

54:50 Okay. One last question. Shemaroo, Gujarati, like the recent content creation, what was the incremental subscribers in ARPU impact from this quarter one? I can't hear you. Akshay, can you please be more clear or come in a better, more clearer line? Hello. Hello. My question is like the recent Bajarati Shemaroo main content release, what is the incremental subscriber and ARPU will get from this release in quarter one? As we just shared in the to the previous question that we are currently not sharing any data on Shemaroo.

55:36 So we can unfortunately, we cannot give any details further on that. Thank you. Hello. Yes. Our next question comes from the line of Chirag from J. Node Capital. Please go ahead. You for the opportunity again. Sir, just one thing I wanted to know, YouTube shorts, is there any update related to monetization policy change related to YouTube? Or is that going be a big driver? Chirag, I mean, while part of the overall ecosystem on YouTube, there is a movement and has been a movement towards for quite some time, and we are also adding that we have significantly put our content also in form of SHOTS.

56:31 But in terms of the monetization, there has been no movement. It is still monetization is still not happening to the kind of extent that one had assumed. It is not really the needle has really not moved. Fair enough. So just wanted to check because if I'm not wrong, it was expected it was expected that on July 26, in this month, there was some sort of an update to it coming from the YouTube side, if I'm not wrong. We are yet to got it. I mean, it's possible. But at this point in time, from what we understand, the focus for YouTube actually is on actually on the other end of the spectrum, which is on connected TLR, which is on the long form content. And actually, I think you had asked earlier about the views this thing on YouTube. I think the while the views are what they are, I think we our focus has actually been on driving significant consumption on the Connected TV kind of platform, which is which has significantly better monetization.

57:44 So finally, more than views, I think, finally, your revenue per view or monetization metrics are far more important, and that's what really our focus has been around. So Shorts is on one end of the spectrum, but long form content on connected TV consumption, I think that's really where YouTube itself seems to be focusing significantly as far as the monetization part is concerned. Got it. No, fair enough. Thank you, sir. All the very best. Thank you. Thank you. Our next question comes from the line of Ranit Patak, an individual investor. Please go ahead. Yes. Good afternoon, sir.

58:29 Sir, what is the performance of fast channel, APST fast channels? And either you say that connected TV channels that two channels you are operating like Shemaroo, Bollywood and Shemaroo Filmigana. This is one of the segments which is increasingly attracting advertisers. So please can you enlighten me regarding this? I mean, company's design plans, future, how this is evolving and how it will evolve? And all those stuff, I want to know that. Sure. So basically, as I just shared towards the end of the last question was about Connected TV. So there are multiple ways in which, the Connected TV the audience is kind of consuming content in multiple ways, either through an on demand kind of a thing or through a linear channel or through OTT on the connected TV or many such manner. Fast is one such way.

59:43 And fast, while it has a certain amount of monetization happening, in terms of the fast ecosystem globally, it has actually been de growing in the last I would say about almost eighteen to about twelve to eighteen months, it has been degrowing. So there was a point when there was a huge number of fast channels up there, and that number has shrunk significantly now globally. In fact, we also, to begin with, had more channels. We also have shrunk it down to two channels. So yes, I mean, we continue to participate in it. It's still not scaled to what promises held at the beginning of the at the early stages.

1:00:36 In fact, so we are kind of tracking and monitoring it. We are participating to understand and keep our keep track. If it scales, we will scale up. I mean, we have all the wherewithal to scale up. But if it doesn't scale, we'll scale back. So currently, I would say it is still at very early stages, more experimental stage of monetization. Okay, And sir, regarding the digital segment, there is also means some OTT apps are also focusing on short dramas. There is a significant growth in short drama. Sir, are you planning to get into that segment? Because short drama ad spend have roughly surged to 400% in India Subcontinent.

1:01:32 Ronak, yes. I mean, microdrama is something which has seen a lot of explosion, especially in countries like China and also is happening in India. It requires a different kind of tech enablement on your OTT app, which we have completely we are on board with that. We are also looking at this segment, but while there is a lot of consumption growth in short form, but monetization is still something which still a bit of a question mark. So while we are keeping ourselves and while we have kept ourselves technically ready in the back end, and we are also investing in some kind of experimental stuff. But to press the pedal on that will take some time unless we are very sure about what is happening on the monetization front short form. But yes, it is something which is globally expanding, and we are constantly looking at it. We have kept ourselves technically and technologically capable to accommodate micro dramas in it, but not yet gone full throttle in terms of acquisition of content around that.

1:02:38 Means means when you will see a significant boom, then you are ready to go in this segment. There is one thing that you know. If you see significant growth in monetization, then means that you will definitely jump into this segment. Yes. Okay. Okay. And and, sir, and, sir, there are two two more questions, sir. Sir, that have all our TV broadcast channel, like, Shemaroo Me, Shemaroo Ingram, Marathi Wana, Shemaroo Jot has achieved the breakeven point. And so that is said to be that today all are they have all are booking profitable individually? No. First of there's no TV channel called Shemaroo Me. There's one Shemaroo TV. No. No.

1:03:27 Shemaroo TV. Shemaroo TV. Shemaroo Shemaroo Mobile. So as a portfolio, as we have talked about right in the beginning, we are completely in free dish, our monetization of the channels are completely dependent on advertising. And advertising over the last couple of years, I mean, consistent in our long period of time, the overall advertising market has remained subdued. And while the monetization has been steady, but in some channels, the monetization is not good enough to make it up EBITDA breakeven business. And since it is an ad led business for us, Till that advertising environment really improves, that is where we are some way off in terms of profitability. And we are keeping our investments hence prudent and controlled in that business.

1:04:28 And which you heard at the beginning of this call, I don't know whether you've listened to it, our investments around traditional new initiatives have been pared down significantly. Thank you. Ladies and gentlemen, this is the last question for today. I now hand the conference over to the management for closing remarks. Thank you and over to you, team. Thank you. Yes. So thank you, everyone, for participating in today's earnings call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR managers, valorem advisers. Thank you and looking forward to seeing you all next quarter. Thank you. Thank you so much, sir. Ladies and gentlemen, on behalf of Shemaroo Entertainment Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.