Regional print media companies to experience 8-9% revenue growth in FY25: Crisil

According to a Crisil report, regional print media companies are expected to experience an 8-9% increase in revenue this fiscal year, driven by strong advertising growth and a loyal subscriber base. The report highlights that while operating profitability is projected to rise by 20-22% due to a 400-bps margin expansion from last fiscal year, the sector must navigate potential impacts from economic fluctuations, changes in consumer preferences, and global factors affecting newsprint prices. Ad revenue, accounting for two-thirds of regional print media's topline, is expected to grow 9-10% this fiscal year, supported by robust demand from sectors like automobiles, FMCG, education, e-commerce, real estate, and local services. Subscription revenue, making up about 25% of the sector’s revenue, is also forecasted to increase by 2-4% due to continued demand for vernacular print media.

Regional print media companies have been expanding their subscription base into adjacent areas. They have benefited from a 21% drop in newsprint prices during fiscal 2024, which has boosted operating profitability by 400 bps to 18-20%. Despite volatility in newsprint prices since October 2023 due to shipping issues, they remain lower than average levels from the previous fiscal year. This, combined with projected revenue growth, is expected to further enhance margins by 200 bps to 20-22% this fiscal year. As a result, the Return on Capital Employed (RoCE) is projected to improve to 15-16%, up from 14-15% in the previous fiscal year. At the same time, strong balance sheets and low or zero debt positions will further strengthen credit profiles.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.