Shemaroo Entertainment Ltd
NSE:SHEMAROO
Earnings Call Analysis
Summary
Q3-2024
The company reported a revenue growth of 4% year-on-year, totalling around INR 156 crores for Q3 FY24, while the 9-month revenue soared by 30% to INR 508 crores. However, digital and traditional platforms experienced advertising spending and viewership pressures, leading to an EBITDA loss of INR 18 crores and a net loss of around INR 30 crores for the quarter. Operational highlights include the launch of the first official metaverse platform and continued cost rationalization measures amid a sluggish rural demand impacting the overall sector. Notably, debt levels are high, standing at INR 362 crores, with a forecasted closing around INR 350 crores for the year. The company deferred the launch of a new channel, due to prevailing market conditions, yet remains optimistic about its long-term future.
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Ladies and gentlemen, good day, and welcome to the Q3 and 9 months FY '24 Conference Call of Shemaroo Entertainment Limited, hosted by Valorem Advisors. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem 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 third quarter and 9 months ended of the financial year 2024.
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 beliefs 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. We have with us Mr. Hiren Gada, CEO Mr. Arghya Chakravarty, COO; and Mr. Amit Haria, CFO.
Without any further delay, I request Mr. Amit Haria to start with his opening remarks on the financial highlights. Thank you, and over to you, sir.
Thank you, Purvangi, and good afternoon, everyone, and welcome to our earnings call for the third quarter and 9 months ended for the financial year 2024. Let me first start of giving you some of the key financial highlights, after which our CEO, Mr. Hiren Gada, will give you some of the operational highlights.
For Q3 FY '24, the revenue from operations stood at around INR 156 crores, which witnessed a growth of around 4% on year-on-year basis. EBITDA loss for the quarter was around INR 18 crores and net loss was reported at approximately INR 30 crores. For 9 months ended for the financial year 2024 revenue from operations stood at INR 508 crores, representing a growth of 30% year-on-year that will add to approximately INR 7 crores net loss was INR 26 crores.
With regards to the new initiatives in Q3 FY '24, the expenses amounted to about INR 28 crores, while for 9 months ending for FY '24, it was about INR 71 crores. And if you were to adjust for this investment, the adjusted EBITDA from the existing operations in Q3 and 9 months would have been approximately INR 11 crores and INR 78 crores, respectively. Digital media revenues grew for -- the revenues for the third quarter stood at around INR 65 crores, up by 8% year-on-year, while for 9 months ended for the financial year it was around INR 185 crores. We can see a growth of around 8% year-on-year. Traditional media revenues for the third quarter stood at INR 91 crores, which grew by around 1%, while for 9 months, it stood at INR 323 crores, taking a growth of roughly 57%.
Now I will request our CEO, Mr. Herin Gada to get you on the operational highlights for the period under review.
Thank you, Amit, and good afternoon, everyone. During Q3 '24, the overall sentiment, particularly rural demand continues to remain weak, resulting in lower advertising spend across the entire sector. Challenges within the [ Tata ] ecosystem persisted during the quarter, contributing to reduced advertising spend, especially on the digital platform.
In addition to the above, a significant portion of advertising budget was allocated to the world cup and state elections, impacting overall advertising, spending on other entertainment category. About 1/3 of the advertising spend during the world cup has been contributed by major FMCG advertisers known for -- typically known for their substantial investment in entertainment categories and not both. Furthermore, filling world cup matches drew attention away from other entertainment options, resulting in decreased viewership across most non-sport categories. Due to this, the company faced two whole [indiscernible] reduced viewership and muted advertising revenue across both traditional and digital businesses.
In addition to the above, planned investments were made in content, people and marketing to capitalize on the first quarter, which further puts pressure on the margin. Moreover than some client B2B closure, discloses also, which according Q3, the revenue realization was deferred to subsequent quarters, which is current and next quarter, which also impacted the revenue growth. The company has already undertaken several cost rationalization measures to address the external advertising slowdown. And we are confident that these effort will yield positive results in the upcoming quarter. However, until we believe that until the rural demand picks up, advertising spend will continue to remain under pressure. This is the overall big picture context under which the operational and financial performance has come in.
On other operational aspects on ShemarooMe front, we released 13 new Gujarati titles during the quarter. The content across movies, webseries and play including digital world premier of blockbuster movies [ One or two, Bahuchar ] and release of original series, [indiscernible] and we have 167 million subscribers, Shemaroo Entertainment remain 22nd most subscribed channel in the world. As far as the broadcasting business is concerned, we launched Original programs across the channel. So we launched on Shemaroo TV , a micrological show called Karnataka [indiscernible]. And on Shemaroo MarathiBana, we launched for the top [ Mansi Subedar ]. Shemaroo VIP channel have -- viewership share of around 7.6% in the overall in Hindi B2C channel.
On the web series time flow, we launched Shemaroo [indiscernible], which is the first official metaverse platform, and android devices and desktop. And our partner -- and we have partnered with Sandbox to create immersive experiences for various Shemaroo IPs on the Sandbox Metaverse. With that, I open the floor for question-and-answer session.
[Operator Instructions] We'll take the first question from the line of Dhaval from DPT Capital.
In terms of the expenditures that company has done and the losses that we have done in new initiatives, we are significantly higher than what you had earlier guided. So was it that you were taken by the extent of slowdown and the surprise in the revenue, which just did not come in or the expenditures just shot up for us much more than our expectation.
No, I think that -- I mean it's a good question. The first scenario is what played out. So as I even alluded to in my opening remarks that the planned investment played out by the revenue shortfall was significantly lower than budget or the expectation. So therefore, the gap kind of shot up. It's maybe because of revenue gap..
So when I look at not only the digital -- not only the broadcasting piece where I can understand the a large portion of revenue did go to World Cup and some of the other things. But even in digit, if you look at the kind of viewership it's kind of flattened out and significantly lower than what it was post COVID. But it kind of -- we have stopped seeing growth in that as well in terms of viewership, which is kind of impacting our revenue even in digital media. For now like 3, 4, 5 quarters, our revenue growth in Digital Media is like single digits, right, which is kind of very low. So would you try to explain there?
Yes. So the revenue growth in Digital Media actually this year, which has been the challenge. But as far as viewership goes, there are 2 parts. So revenue growth has happened. We've actually till FY '23, there has been a level of revenue growth in the digital media. But FY '24 has been the challenge because the large component of various digital media platform, which primarily comprises of YouTube, Facebook, et cetera. They have all been very flat in terms of their monetization and revenue.
And second point was on the viewership side. So yes, viewership, this is till, I would say, the adjustment of post-COVID probably playing out is what we can gather. And this is in a very a phenomenon which is playing out broadly in the entire digital media per se. It's not just the -- from what we hear from various OTT platforms in terms of their number, viewership, et cetera, et cetera. It's all been on a lower trajectory and that -- while it is on a new normal compared to what it was pre-COVID, I think finally the consumption growth at some point will start kicking in. That's how I would look at it.
I would just add 2 things there. I think you're right. the headwinds on the advertising plan to impact dropped us significantly in the last quarter. But also from a digital point off view, there are 2 things happened, world cup saw unprecedented levels of viewership, especially with the kind of performance that India did right up to the final. Also the fact that it was free and there is no viewership for those times not significantly affected. Also, with soft advertising environment with some major recent cricketing advertisers in the form of gaming companies and [indiscernible] gaming companies have not really did advertising costs, external and other regions. So some of them are advertising and digital ad on broadcast, which is done by FMCG companies that also moved towards. So it has been a double whammy in that savings this quarter.
Right. and my last couple of questions. First on the employee expense. If you look at the employee expense cost curve, is significantly higher, like we were last year same quarter, 21% unchanged across last quarter, 28% and something and now 31%. So every quarter, there is 10%, 15% jump in employee expenditure, which is kind of unprecedented in our history, and it is actually much higher than any other company in the industry. So like what -- and I understand you're employing more people for newer things. But in a time frame where revenue is a challenge, do we look back and kind of scale down on such expansion?
So a couple of things. I think, firstly, about 1.5 years back, roughly, we embarked on this whole significant shift in upgrade in terms of professionalization and various aspects related linked to that. Also, the future that we saw for media entertainment in the economy, economic backdrop -- we believe that the opportunity is humungous and the best way to play this and if we have to play on this front foot, the best way to [indiscernible] having significantly professionalized team driving the entire thing. And therefore, we invested and I have discussed this quarter after quarter, and we invested significantly in dialing up the teams and people.
Now a lot of those joining, which has happened has kind of happened into -- in fact, into this Q3 than the last of that significant addition has happened, which was planned and appointments happened earlier closure and joining. At this point, we expect that -- so this is not an investment, which for the short term, this is investment for the long term. And we are -- as of now, we believe that we have broadly reached kind of ERP about peak of that team size, strength, quality, et cetera, et cetera. So from here, I don't expect it to further go up significantly. What obviously, has the new journeys, they are settling in and starting to contribute on various fronts, et cetera. We are definitely seeing that end as the economy also recovers on the consumption side, we believe that we will be much more strongly poised to take advantage of that.
Sure. Last question is on borrowing. Our borrowing in even last few months have gone up, like and with the operating performance, how much will it be like INR 315 crores is the last reported one, but what will be the current debt.
No, our September -- okay, Amit will take on.
So current debt is at INR 362 crores. We expect this to come down there on to INR [ 9 crores ] in terms of utilization of limit, but it would be -- we would be closing at around INR 350 crores for the year.
In September it was INR 332 crores.
Right. Right. And so -- now again, I mean, this year, it was.
Sorry, one second, I was -- not in September -- okay you continue.
I mean -- and I understand the challenging environment, but the balance sheet detriment is like really fast for us. So I mean how comfortable are you -- like, would it be fair to assume that this now is surely feedback for us?
This, like Hiren mentioned that we were kind of taking back with the kind of slowdown in the revenue. And hence, we had to support the business with the extra borrowing to continue for the same. And with the offset demand, we have measures that we have taken place, I think it should be depict that make it can increase to INR 360 crores or around.
We already at INR 360 crores. Yes. So Dhaval this 360-odd number, whatever is there I'm very confident that this would be the peak because of course, a few factors have played out to throw us off that in this quarter. And we including some of the B2B deals, et cetera, that we have in the pipeline, they will all be cash flow accretive. So we are very, very confident that from where -- in fact, we had intended to repay and reduce rather. But because of this challenge that seems unlikely in this financial year that we are very conscious about this. We have same center, I mean we have invested almost more than 80% of the investment has come out of internal accruals and we don't expect this -- in fact, we are considering that this is the peak.
And last, what is the inventory as of now? It was INR 738 crores as of September.
It is INR 727 crores for quarter ended December.
The next question is from the line of Dhwanil Desai from Turtle Capital.
So my first question is, so if I look at like on the larger picture perspective, the overall construct is that whatever effort that we are putting into building this broadcasting business. But a large part of our profitability and revenue is kind of driven by external environment. While the cost is something, which we are currently increasing every quarter. So given this construct is the external environment is not favorable, let's say, for 2 years. We don't know how the future plays out, right? So -- so given that, how do you guys look at this construct given the balance sheet shape that we are in with INR 360 crores of that, when we were actually earlier thinking that we will reduce that by INR 30 crores. So it's increased by INR 230 crores. So -- given all this, don't you think it's a good idea to consolidate first and then go for more aggressive scaling up of the business?
Yes, I agree with you, and that's exactly what we alluded to, right? So when -- I mean I understand 1 thing, both construct of this quarter, this was a festive quarter, right? So festive quarter is when everyone expects the revenue to be at the peak. So therefore, the investments are also planned to peak in the festive quarter. And since that didn't happen, it's double whammy that kind of resulted. Having said that, if the market advertising scenario doesn't improve, obviously, since the quarter went the way immediately, we have put a lot of measures to mitigate along that. And strategically, we are putting things in place our next year's business plan and operating plan for the next year.
And we will be looking at the whole approach in a far more relatively more cautious. Having said that, there are 2 things. I mean, so one is more on large, how long this rural and advertising slowdown will last because there are 3, 4 different factors, which have contributed to that. But at the same time, we don't want to end up doing -- taking a drastic measure, which ultimately impacts the the long-term opportunity that we all believe. And if we just take a step back, you also -- the question is from a big picture point of view. I think -- we all need to also look at it from that point of view that if India is looking to grow from a $3.5 billion, $4 trillion economy to $5 trillion to $7 trillion kind of number, then without consumption picking up, that's really not going to happen.
And for consumption to pick up and as and when consumption picks up, advertising grows significantly faster than that because of, obviously, because of various reasons related to that. So I think structurally, if we all believe that this is the part of the economy at a 10% kind of GDP growth rate of 10% to 11% over GDP growth rate, but without consumption growth that's really not going to happen. So I think considering that we also don't want to take a step, which kind of compromises on the ability to take that. So we have to balance out both. And I fully agree with you, we are very, very cognizant of that. And I think given the context -- however, as I said, in a short time frame, when the revenue expectation -- I mean, the revenue shortfall is so higher, the market challenge is so high to fully turn the ship around and do it within a few days is not possible. It does take its own set of time.
No, that I fully understand. I'm saying more from, let's say, 2, 3, 4 quarters perspective, I understand that a quarterly basis and reduce that not suddenly, that part is fully understood. My point is more that generally long-term opportunity, you guys are convinced, that is what we are trying to achieve. But generally, good companies do manage short term also by taking tactical decisions. And that's what I'm alluding to that.
So that we have already taken. So for example, we have to shut a couple of shows on our broadcast TV channel, et cetera. So that bleed, we have already taken measures to do that. Arghya, you want to add?
I wants to add. Yes. One of the point is -- and I understand your point and appreciate your question. What we're saying. The only thing is -- we have already taken as [indiscernible] we have already taken certain measures to tactically manage the situation right now. But the broadcast business, especially original business takes its time to get built. So -- and completely taking major reaction on a basis. And yes, I mean we don't know how the world will pan out over the next couple of 2, 3 quarters. But at the end of believe in a long story in the longer story of the economy and with the way we are calling right now with our business channels, really prudent, we'll be careful, we'll be fortune. But we will maintain the shift in the manner that we are able to fractioned the demand.
Okay. Okay. Fair enough. So since last quarter, there was a world cup and those kind of events. Do you think that Q4 will be slightly better, at least both in terms of viewership and ad spend on the entertainment channel. And since we have already embarked on cost-cutting thing, at least...
So Dhaval viewership mix -- sorry, [indiscernible] viewership here, but from an advertising point of view, unless as Hiren said in his opening comments, until the rural economy and consumption really opens up, there will be continued slow for advertising. So that we are now -- we are fully convinced that this measure is going to stay for some more time. Then yes, leadership will improve -- that would improve. Monetization is something that we are not very very confident of what we [indiscernible] in the next 1 or 2 quarters.
So this INR 28 crores, INR 29 crores of...
Mr. Desai, I would request you to come back.
I will come back again.
[Operator Instructions] The next question is from the line o Maan Vardhan Baid Laurel Advisory Services Private Limited.
Just quickly I wanted to understand, I mean, the World Cup got over sometime in November, and we've seen 2 months, December and January post the World Cup. So just wanted to understand what's the monthly the run rate on the revenue in these 2 months so that one can kind of iron out what sort of the World Cup factors and kind of and same thing on the cost front also for these 2 months, what is the operational cost metric moving like. Like, I mean, in September, we were doing approximately INR 65 crores, INR 66 crores of sort of operational revenue on a monthly basis in the September quarter, which is probably down to 50%, 51% in this quarter. So just wanted to understand where are we in December and January, so that this World Cup thing?
Yes. So Maan Vardhan, I just break up the revenue part into 2 things. Firstly, so one is we have the deal base B2B business and then there's a B2C business. So one of the challenges was that this quarter was that the B2B deals were deferred to Q4. So that will come in more 1 or 2 large deals will -- are expected to come in, in Q4. So that is there, but the B2C part of the business, which is -- which has a monthly run rate, that rate, which normally so for example, to give you a different example. YouTube normally, December is the highest month of the year. But in this case, this year, December was probably at par with November. Okay. So -- and what has happened again to bring back the point with which we started the opening comments, is that because of significant allocation of expenses for the World Cup, a lot of advertisers budgets have kind of be consumed diverted towards that space. So then their remaining spend has been tepid or lower, actually. And that has impacted. And that is what Arghya was also alluding to that spend. So while are, for example, on YouTube, our viewership share metrics, operating metrics are phenomenally good. I mean, December, we probably closed YouTube with one of the highest viewership shares in most of our categories that we've had in many months. But the translation of that on revenue front due to these challenges, the start-up ecosystem et cetera, et cetera. Because of that, that translation into revenue has not happened, given the broadcast viewership rating and all, while they do fluctuate from time to time, but in general, they have been trending upwards over the last few weeks.
Again, translation on that on revenue front? it is relatively under-indexed due to the adverse external environment. Now this external environment, whether it turns around in a few weeks or 2 months, right? No one is -- right now 1 is able to guess that. And if you read most of the people in the consumer business, they all are facing a challenge of demand and which is kind of translating into their own discretionary spends and things like that.
Fair enough. Also just wanted to understand across our 4 channels, how much of..
Mr. Baid, can you rejoin the queue. I'm sorry to interrupt for follow-up questions.
Sure.
We take the next question from the line of [ Prashanti Dhoori ] from Wealth First.
For adjustment...
[indiscernible] your audio is not clear may we request you to use your handset, please?
Can you hear me now?
No, ma'am, still feeble.
Okay. Can you hear me right now?
Yes, ma'am. This is perfect.
Yes. So my first question is that how reasonable is it for us to expect probably like a 24% growth quarter-on-quarter for the next quarter to achieve the FY '24 revenue target, like this is about INR 700 crores. That is my first question.
And the second 1 is more generic that in the presentation topic you provide investor presentation, is it possible for you to include more financial data and numbers for Shemaroo in general and not generic data that is relevant to media industry, that would be really helpful.
Okay. So to answer your first question, I mean, we've never given forward guidance on revenue and profitability. But 9 months, we overall have grown at around at nearly 30% on a year-on-year basis on top line. Yes, I mean, if the momentum is maintained, that number I mean, then it's an arithmetic calculation. But yes, we hope that we are able to maintain the momentum. Second question regarding the thing we have noted your possession. And Amit.
Sure we'll look into it and we expect we'll be able to.
Yes, we will try and improve that.
So my first question is more on like given that the rural demand is weak and we also cannot really predict how it will be going forward. It might change in the next few months or like a few weeks -- so is it possible -- how possible is it to maintain the same momentum, like 20%, 30% growth for Q4? Or would you expect it to be better probably in FY '25? That's more of my question.
So there are various parts of our business, something said that there is -- we have a B2B business also, right? So there is his lumpy deal based business. So some of the deals which were supposed to happen in Q3 has not referred to Q4, but there is operational very mundane regions, but does not differ [indiscernible] in Q4. So to that extent, those deals will deliver a certain kind of run rate is. But in terms of the B2C, we predict where will be able to grow at 29%, 24% right now, it is difficult for use. But we will see how far it can go. If you see that -- our full year number, we had 29% growth, but our quarter will be some 4.6%. So there has been definitely a first half is us growing at about 40-odd percent. Growth has come down. And we will see how the quarter goes. As I said, we do not expect the overall B2C part uses the advertising unit business really keeping very strong as all the factors that we talked about at continue. So we will see towards. Right now it is difficult to predict what is the quarter-on-quarter growth.
The next question is from the line of Yash Kukreja from Equitree Capital.
So my first question is, in the last quarter, we have reported a revenue of around INR 200 crores despite the low ad demand. But this quarter, we have revenues fell to INR 156 crores. So -- and I understand also this was mainly because of World Cup, but IPL is also lined up from the March, so how do we look at it?
And sir, second is in our investor presentation, 2 factors have been mentioned. One is reduced ad spends and second is lower viewership. But on a contrary, our viewership has actually gone up from 7.4% to 7.6%. So how do we look at both of these things?
Sorry, what was your first question?
sir, my question was IPL is also lined up from March. So how do we look at the demand scenario?
Yes. So right. So I think [indiscernible] talked about Q2 being INR 200 crores and INR 199 crores and Q3 being INR 158 something like that was question. As you remember, again, as being said probably again, a , we have 2 different parts of our business is very different, right? There is 1 B2C and there is one B2B. B2C continues to be a deal-based business. So for example, our syndication businesses are our B2B business, it's not a -- so in Q2, we had large lumpy deals both at the domestic as well as an international level in terms of B2B deals.
In fact, we had shared that in the presentation also in that good amount of that or that growth has been contributed by the B2B side of the business.
Last concall, our investor call in H2, after quarter 2, we had called it.
So one of the big reasons there. If you look at from a B2C business, there is not much of change. Going forward, IPL is something that we are -- I think a world cup is kind of something which we have on that kind of lead enter was not really planned for. We were part [indiscernible] more than world up while on core is coming out of it but more than Volaris the overall reduction in the ad price the softening of the ad spend is where the problem is really lies. So the similar issue will happen in IPL and we are obviously..
However, I would add here that IPL is a -- in many ways, IPL is a planned event, World Cup comes once in 4 years. IPL is an annual event, so the entire ecosystem is prepared for it in the sense that there are a lot of advertisers who typically participate in cricket, they they plan their budgets and allocate budget for IPL and within their overall budgeting framework. Even the programming, et cetera, so new show launches, et cetera, normally get deferred to post IPL, et cetera. So on past and revenue front, the entire ecosystem now is used to IPL plans around IPL in general. So of course, and World Cup on the other hand, is once in 4 year event, and having said that, I would also add that the actual viewership and revenue or spend on world cup actually were lower than IPL. Okay. But it's just the fact that in the tepid advertising environment, they took have money from traditional entertainment advertisers who were themselves facing a product. That really kind of put everything offline.
Got it. Sir, and my second question is considering the deferral of the revenue recognition from the B2B segment, can we see an uptick in the Q4.
Yes, we are quite confident that will happen from the B2B front.
Yes. Got it. Got it. Sir, my last question is on the -- as far as our new investments are concerned, out of the total outlay of INR 75 crores, we had already spent INR 43 crores. So how much have we spent in Q3.
We [indiscernible] total is INR 71 crores. So we spent in this quarter -- in this quarter, it was INR 28 crores. So the 9 months is at INR 71 crores. While we had projected INR 100 crores -- sorry, INR 75 crores. In fact, that was the very first question on today's call. That the number has gone up. Is it because of higher cost or lower revenue. And I replied to that, and it is because of lower revenue.
The next question is from the line of Animesh Modi an Individual Investor. Yes.
Yes, this quarter numbers are not up to the line and expectations, as you all know. But my question is that though income is not in the hands of the company, right? But as far as planned expenditures are concerned, we have already planned for this current year, so it's fine. But what we expect into the coming quarter or coming next financial year how much plan expense we are going to make? And do we have any policy that percentage of the some percentage of the revenue we spend for plant expense or it's just on a numbers basis? This is my first question. And I will have 1 more question later on.
So no, I fully agree with you. And as I alluded in the opening statement also that we have taken a lot of corrective measures, which are certain tactical measures to at least bounce back in the fourth quarter as much as possible. Our next year's annual planning exercise is underweight. So right now, I'm not in a position to comment too much on that. But in terms of the thought process, I can tell you what we have been applying. And I don't think that will change is that we will -- based on businesses plans, we will see where the overall position lines up. And based on that, what is available for us to invest, plus 2, we have a stated intent of bringing down the debt exposure. So with all of that combination, we would look at really how much we have available to invest and how we want to fit into that.
That availability of investment, et cetera, et cetera, is all, of course, based on various performance ratios and financial margins, et cetera, each of those businesses. So it's -- ultimately, it's a well thought out planning exercise that kind of flows through of course it all assumes certain market conditions. If that market condition doesn't play out, then obviously, this is what happened in this quarter.
Correct. Because see, if the income is not in our hands, but we can also plan in our expenses so that we can make our margins inflect. And next question is, what is the current status of the GST such happened? And what we are -- can you give some more light on this?
Yes. So the -- there's an investigation going on with the DST department, there is actually no other - as I said, but there has been internal, the people with documentation, et cetera, is going on. Other than that, there is no movement except from the last stated question.
Yes, because the demand has been raised by the department, whatever it demand.
No, no, no, there is no demand that has been raised in now.
Yes, it may be some figure that has been around INR 70 crores.
I mean some press has given some figures and all of that, which we don't know anything about that. There is no official demand raised by the department. This quarter, there would be some details, et cetera, that we have cooperated with giving them. But as such, the next step has not yet been taken by the department.
So there is no formal demand letter or communication from department regarding and stated demand has come in.
So there is no showcase notice has been issued.
Not yet. We will announce as and when we get. Yes, we will be announcing. We don't know when -- I mean how long will take and what is the procedure. But at some point, yes, we will have a showcase notice and we will -- of course, which we will contest and all of that. But yes, we will announce it as and when it comes.
The next question is from the line of Dhwanil Desai from Turtle Capital.
So the question is that on the cost structure that we have built, is it fair to assume that in order to make a reasonable EBITDA margin, our revenue has to be upward of INR 900, INR 1,000 crores, then we can make 15%, 17% EBITDA margin because that's what it appears like. And a corollary to that question is that -- so in terms of to achieve that number, do you think that with the current viewership there and end market normalizing, we should be able to get there? Or you need to be even higher in terms of viewership share to get to that number where we can make respectable margins.
Dhwanil, this is Arghya. I don't know when you got that number from. Profitability obviously depends on various things in terms of how many original -- I mean there's a lot of stuff, it's not any action. First of all, the biggest thing is what is the demand supply situation in the market in terms of advertising as well as content -- from a content perspective. The letter is the demand really is the fortunate demand because demand is good enough at even lower, we are seeing this lower original shows, we can monetize much better. So for [indiscernible] out as a function of the advertising demand. So -- that is 1 thing.
Secondly, in terms of our -- we have a massive content luxury with us, right? How well we are able to monetize it using our various B2B deal, what are the kind of margins sustainable to correct with [indiscernible] second we have embarked in a senior aggressive plan of international syndication, which would mean syndicating content from global markets and for selling into global markets. What is the type of margins we base in, this is a function of various things. So I will not go into that. The point is I think as somebody asked me moving, we have taken some tactical measures to ensure that and we become more prudent and cautious, why we will not sacrifice the overall long-term picture. And I think we are going in that part. And [indiscernible] been saying in multiple calls are early we believe in that we select [indiscernible] if that happens, which we strongly believe it will. It has to be a custom of consumption, and it is also a function of the demand that will translate [indiscernible]. So we are safe due to that core, metaling the right -- I mean, we want to increase our newest irrespective of anything us, right? And whether the market comes down, goes up or whatever happens, we want to [indiscernible]. We want to become much bigger real share channel. So that objective does not stop. So I don't think it related. But at what number will be profitable in I don't think -- that is a [indiscernible]
And I think so on a 9-month basis, how is our broadcasting business as I look in, is it breakeven doesn't look like, but I still want to confirm with you.
You're right. Definitely not in a breakeven position. The last part of this investment of INR 71 crores has gone into the broadcast in early quarter itself, INR 28 crores what we are seeing like part of that has gone into [indiscernible]. So that is definitely the gap on that business. Having said that, as I mentioned in between that, for example, we have pulled back on a couple of shows on some of the other cost aspects and all of that.
So we have -- we are taking corrective measures. But as you can appreciate, you can abruptly stop a show. You have to reach it to a logical conclusion, et cetera, et cetera. So all of that takes its own time to play out. We worked out some innovative model with some commercial model with some production houses to further reduce the -- so there's a lot of measures that already we have taken. And again, I would actually go back to somewhere in between us regarding the people front. I think if these people asset, which I'm very confident will not only turn this ship around, we'll actually take the business significantly way forward. And they are excited about the whole future. And everyone understands that this is a speed bump. But everyone's extremely passionate and I would say, very bullish and very committed to achieve what we all have collectively set out at to achieve. I think that came is undoubtedly the sentiment amongst our key teams.
Yes. Good to hear that. The only reason I asked this question is because you had to breakeven in second half of FY '23. And it doesn't look like we'll breakeven in FY '24. So going forward, are we kind of discussing that how to break even in FY '25? Or it will always be a function of external environment.
No, not really. So I mean let me -- without -- we are getting into a real process right now, right? So how we initiate things and how we take things, that's all on the discussion right now Yes. I would say a large part would still depend on external environment. But having said that, we can either at which we can do your overall comissioning of the channels where you want to play, how do you want to play -- there are various ways in managing it. We are relooking at that. And it's always -- we always want to make the [indiscernible] a business profitable. Obviously, that is the issue, but we will continue to heat factor. But whatever in terms of that internal possibilities and the ways are being reducing the channels and the various GDP models that we are thinking up. There are other ways of controlling which we are in the process of planning right now.
Okay. And last question. So you had to launch a new channel in this year. Are we still on course or we are kind of relooking at.
So we deferred it, obviously, given the market conditions and all of that. But yes, now -- I mean, so we are ready with the channel set up, but we deferred it, obviously, because of the market condition. And I think we -- I mean, we'll soon be launching it.
The next question is from the line of Maan Vardhan Baid from Laurel Advisory Services Private Limited.
Just wanted to understand, in our existing broadcasting channel, how many are the content are we sort of playing without the reruns?
So no. So your question is on original programming.
That's right.
So on Shemaroo TV, we have 3 shows which are original. We have 2 mythological and socialized and one is a prime show, which is a 1 hour show. On Semarang Umang, we actually had 3, we had 5 shows, which we have brought down to 2, and we'll probably -- so we are launching 1 more show, in, I think, next to next week, which has actually just been announced. It's is being launched with actually Balaji Television is the producer, so that's the show we are launching next to next. So we'll probably -- we are evaluating, but it looks like we'll probably close the year with 3 shows coming down from the 5 that we pick that -- and on Marathi, we have 2 shows.
Okay. So just wanted to understand, I mean, since sort of with 3, 2, I mean these are very meager numbers in terms of shows on these channels. So sort of what would attract an advertiser to come and advertise on these channels? And besides...
Advertisers, I don't think that is the correct to say that 3 shows are good or 4 shows are good. I don't think that's a look at it. And that's not how it works. We have had channels working at a great number than the real with the just the report of fiberization. So I don't think that is the question, which is also a function of the various qualities of the shows that we run and the kind of programming that we do. Remember, we are also syndicated our funding. And a lot of the [indiscernible] content is also present in the Swedish market. So it's not just a I think that's what..
Structurally, I mean, fundamentally advertiser looks for audience. So I think that is what is the important thing. So it doesn't matter whether you have 1 original 2 original or no reason. So for the first 2 years, we had no reason when you are establishing and still be high viewership and revenue. So it's actually advertiser looks for audience finally. So how we are programming with originals, reruns and syndicated content is really about how we are able to attract the audience.
Okay. Fair enough. Fair enough. So basically -- okay, so maybe I understood it wrong that -- so if -- so if we were to club all these categories together, and without repeatability of any of the content I just meant to understand what is the sort of the content that is for the number of hours that is being run, which is not being repeated again. For example, the same content, which tends to be repeated during the day. And that means the original part of this content growth...
All content in all channel [indiscernible] , right? So all content in all channels is all repeated. Okay. all the prime time shows, whether I have 3 shows, 5 shows or 6 shows, [indiscernible] it to the data. So a day for [indiscernible], the question should be actually been at how do audience will be able to.
So as I said earlier, that we run with syndicated license content as well as original and repeat of rice. It likes how the programming mix happen. And actually, I mean if you -- what I would advise you is that if you can probably go through our programming, you can see our channel live on various platforms. all our channels are live on various DTH and cable platforms. So you can actually see the programming to understand. So for example, in the morning, you have a Bhakti part and various programming slots are there based on audience consumption preferences and our own channel programming strategy, et cetera, that we have.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Yes. Thank you so much. I think thank you, everyone, for attending the Q3 call. And of course, it has been a tough quarter and we hope and I'm very confident that it doesn't disturb the long-term picture, and we are fully on track for the long-term picture. Thank you so much, and see you in the next quarter.
Thank you, members of the management. On behalf of Shemaroo Entertainment Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.