U.S. Markets open in 4 hrs 37 mins

Edited Transcript of MUSI.NS earnings conference call or presentation 28-Jan-20 7:00am GMT

Q3 2020 Music Broadcast Ltd Earnings Call

MUMBAI Feb 4, 2020 (Thomson StreetEvents) -- Edited Transcript of Music Broadcast Ltd earnings conference call or presentation Tuesday, January 28, 2020 at 7:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Apurva Purohit

Music Broadcast Limited - Non-Executive Director

* Jimmy Oza

Music Broadcast Limited - IR Executive

* R.K. Agarwal

Music Broadcast Limited - CFO

================================================================================

Conference Call Participants

================================================================================

* Amarjeet S. Maurya

Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps

* Anuj Sharma;M3 Investments;Analyst

* Ashish Kumar;Infinity Alternatives;Analyst

* Chaitanya Jagarlapudi;RW Advisors;Analyst

* Jay Modi

Emkay Investment Managers Ltd. - Equity Research Analyst

* Jinesh Joshi

Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst

* Sachin Shah

Emkay Global Financial Services Limited - Fund Manager

* Sarvesh Gupta

Maximal Capital - Founder

* Vikram Kotak;ACE LANSDOWNE Investments;Analyst

* Yogesh Kirve

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, good day, and welcome to the Music Broadcast Q3 FY '20 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. (Operator Instructions) Please note this conference is being recorded. We have with us today Ms. Apurva Purohit, Director Music Broadcast Limited; Mr. R.K. Agarwal, Group CFO; Ms. Sangeetha and Mr. Jimmy from our IR team, along with Payal from SGA on the call.

I would now like to hand the conference over to Ms. Apurva Purohit from Music Broadcast Limited. Thank you, and over to you, Ms. Purohit.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [2]

--------------------------------------------------------------------------------

Thank you. Good afternoon, everyone. I welcome you all to the earnings conference call for quarter ended 31st December 2019. As you would have seen from the results declared so far, the current economic environment continues to impact consumption, which in turn has adversely impacted the overall media and advertising industry across all media verticals, be it TV, outdoor, digital or print. Though we all saw a

(technical difficulty)

uptick in the festive season, it was quite subpar as compared to last year for all of us.

As far as the radio industry is concerned, the central government, which is a huge contributor, continued to hold off its advertising spend, leading to a massive decline of 75% in its volume, with its share dropping to 4% from 12% in the previous 9 months.

National advertisers, who contribute approximately 30% to the overall industry volumes, also saw a degrowth of [15]%, primarily led by categories like e-commerce, durables, media and FMCG, which did not spend as expected. The only national category which grew its ad volumes was auto, driven largely by festive promotions and the launch of new BS-VI compliant model.

Despite this, radio as a medium saw the addition of 5,600 new advertisers, which were largely local in nature. The volume degrowth for local advertisers' ads was minimal at 8% across all categories, which has helped to increase local share from 58% in 9 months to 65% in these 9 months. While we will have to work very hard to fill the gap left by the government shortfall, the silver lining is that despite the slowdown, pure-play radio advertising degrowth was in single digits at 6%, possibly the least across all media.

As far as Radio City goes, Radio City Q3 registered a revenue growth of 11% and an EBITDA growth of 16% as compared to Q2. And during this period, we improved our EBITDA margins by 137 basis points to 31%. Apart from the festive uptick, some of the revenue initiatives that are showing traction for us are the content integration that we are doing at the local and regional level, which are growing at 15%, and the 360 solutions initiative that we have taken across all our businesses, which seems to be an increasing need of our clients.

As a historically prudent organization which has always believed strongly in profitability, we have used these past months to refocus our energy on optimizing our operations from all aspects. The cost control measures we put in place helped us reduce the impact of the fall in revenue on our profitability to almost half, as you would have seen in the presentation. These cost-cutting measures include recruitment and salary rationalizations, station-level cost optimization, royalty contract optimizations, et cetera. This has reduced our fixed cost component by approximately INR 16 crores at an annualized basis. I want to highlight the fact that this translates into an overall permanent saving of 6% of total cost in the P&L and will naturally help us with improved margins when the economy improves.

We have also reduced our nongovernment receivable days to 117 days, as against 124 days as on 31st December 2018. As far as the RBNL acquisition is concerned, there is uncertainty on the MIB approval, which is unaccountably delayed.

Finally, I'm happy to share that the Board of Directors has recommended the issue of bonus shares to existing shareholders in the ratio of 1:4. The bonus issue will lower the average buying costs for existing investors and create liquidity in the market, which will widen the investor base.

The bonus issue will also help the existing investor earn more return from the buyback as and when the company decides to do so in accordance with its policy to distribute surplus cash. The bonus issue is in line with the shareholder friendly policy that our parent, Jagran company -- the Jagran Group has always pursued. With the budget around the corner, we hope that the government announces policy measures which will kick-start consumption and bring back investments and momentum in ad volumes.

With this, we will now open the floor for question and answers.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) We take the first question from the line of Jay Modi from Emkay Investment Managers.

--------------------------------------------------------------------------------

Jay Modi, Emkay Investment Managers Ltd. - Equity Research Analyst [2]

--------------------------------------------------------------------------------

I had a question regarding the OTT platform. So we've been reading reports saying that in Western nation, a lot of songs content is being consumed through these audio and video platforms. So have we been seeing a similar trend in India as well? And when we negotiate our advertising contracts, do the advertisers bring this point up with us?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [3]

--------------------------------------------------------------------------------

Obviously, a lot of people are talking about OTT right now, digital and OTT seems to be a conversation piece more than anything else that we see operating everywhere else. Whether it is -- I just would like to correct what is happening internationally. So if you look at the international figures, the reach of FM radio is around 95%, and the reach of streaming services, the OTT platforms which stream music, is 23%. So even in Western countries, that's the difference. In India, the figures are around 60%, 70% is the reach of FM and around 6% to 7% is the reach of music streaming platform. So we don't see this number change dramatically, largely because the reason people are listening to FM is far broader than the reason that they listen to these music streaming devices. And because the consumers haven't really got onto music streaming devices, the advertiser usage of those streaming device is also very, very low.

--------------------------------------------------------------------------------

Jay Modi, Emkay Investment Managers Ltd. - Equity Research Analyst [4]

--------------------------------------------------------------------------------

Okay. But it is just matter of times, things pick up on OTT platform, right, since the local data availability and incrementally more penetration of cellphones and other devices?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [5]

--------------------------------------------------------------------------------

Jay, which is exactly why I first answered my question by telling you about what is happening internationally. In far more mature markets where data is not an issue, mobile penetration is possibly the highest. So in those mature markets, the reach of these devices -- of these streaming services is at 23% as compared to 95% of FM. So if -- even in India if these numbers change, they will reach these numbers only.

--------------------------------------------------------------------------------

Jay Modi, Emkay Investment Managers Ltd. - Equity Research Analyst [6]

--------------------------------------------------------------------------------

Okay. Got it. And my second question was around RBNL acquisition. So we've paid INR 220 crores, right, in form of preferential shares? Or we've not paid anything as yet?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [7]

--------------------------------------------------------------------------------

We haven't paid anything, but Mr. Agarwal, since you've asked this question, he will give.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [8]

--------------------------------------------------------------------------------

Yes. We have not paid so far anything.

--------------------------------------------------------------------------------

Jay Modi, Emkay Investment Managers Ltd. - Equity Research Analyst [9]

--------------------------------------------------------------------------------

Okay. So no investment had been made in RBNL as yet?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [10]

--------------------------------------------------------------------------------

Yes, to date.

--------------------------------------------------------------------------------

Jay Modi, Emkay Investment Managers Ltd. - Equity Research Analyst [11]

--------------------------------------------------------------------------------

Okay. And my last question was, if we could get a breakup of volume growth and price increase that we've done for 9 months?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [12]

--------------------------------------------------------------------------------

So at 9 months, the volumes have degrown by 20%, and the rate has increased by 3% [yield].

--------------------------------------------------------------------------------

Operator [13]

--------------------------------------------------------------------------------

Next question is from the line of Vikram Kotak from ACE LANSDOWNE Investment.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [14]

--------------------------------------------------------------------------------

I have actually 2 questions. One for Apurva, one for Mr. Agarwal. I think the note #5, where you mentioned that the acquisition of the radio business of Ananda Offset Private Limited, which has been canceled, and you got your money back. Can you explain that, with the line item #8, which is RBNL? Can you just kind of mix -- combine both and answer me, Mr. Agarwal? So what exactly is the #5 item, the Ananda Offset Private Limited? And what exactly is #8 item?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [15]

--------------------------------------------------------------------------------

Ananda Offset, we had to cancel because slump sale was not acceptable to MIB. And they said, I mean like if you come back with another structure, then we may consider the proposal. But by then, we had already got engaged with the RBNL and therefore we decided to come out of that transaction.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [16]

--------------------------------------------------------------------------------

Got it. Got it. So they are 2 different transactions altogether?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [17]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [18]

--------------------------------------------------------------------------------

Yes. Sure. And the question on this RelianceBroadcast which Apurva just mentioned, that you -- it's still been delayed since a long time now. So any call you are taking, any time line you are keeping if you don't get it within this stipulated period, you want to kind of get out of this?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [19]

--------------------------------------------------------------------------------

We have agreed to certain time line and the fact of the matter is, we -- if we don't get the approval by March, we may have to look at the transaction afresh.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [20]

--------------------------------------------------------------------------------

Okay. Okay. So you're waiting till March to get the approval. If you don't get, then you'll -- as of now, we assume that the transaction is over?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [21]

--------------------------------------------------------------------------------

Yes. Therefore, the reason is simple because even otherwise, we could not have got the asset before 1st April. The lock-in period is expiring only on 31st March.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [22]

--------------------------------------------------------------------------------

Got it. Got it. Got it. And also, the question on the -- what Apurva mentioned about the -- you distributed bonus shares, keeping in alignment to the future buyback, if any. I didn't understand the rationale of that. Can you just explain me that again?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [23]

--------------------------------------------------------------------------------

As you have seen last year also, we did buy back. And this is the group's policy to reward the shareholders as and when we have free cash. So of course, company may take it up again, once it is allowed to do so under the law. So this possibility always stands there.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [24]

--------------------------------------------------------------------------------

Got it. Got it. Got it. Understood. And 1 question for Apurva. Apurva, you mentioned about the slowdown is still on and you are looking to government to revive it. Are you seeing some traction back in the month of January, February, March, because some of the people we are talking in the retail industry are seeing some kind of small comeback in the auto and many other sectors. Is your -- even you are seeing the same? Or it's not happening to the radio business?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [25]

--------------------------------------------------------------------------------

Vikram, thanks for asking this question because I'll use this opportunity to just separate out the slowdown in our different categories. So one part, of course, is the government. And if you see, 50% of the drop in overall volumes for the radio industry as well as for Radio City has really come from the government, okay? So that's a huge hole that the government has left. In that bit, we have not seen any kind of comeback or traction. So the government is continuing not to spend. And even in January, we don't see that it will -- this quarter, they will spend. That's one part.

The second part is the 50% which is from commercial advertisers, both national and local. As far as the local advertisers go there, their drop was fairly minimal. And when you are talking about the retailers coming back, so the local advertisers, we believe, will continue to spend because the business requires them to spend specifically on radio, which is why I mentioned that you've seen 5,600 new advertisers come on radio. So they will continue to spend. And as their business starts picking up, which we hope will happen, their spend on radio will only increase.

Now if you look at the national advertisers who dropped volume, there are certain categories who have started spending in the festive season, for example, auto spend. E-commerce did spend in the first 6 months, [issue] they did spend, of course, not to the extent of last year, but they did start spending. And similarly, in quarter 4, there is -- there are categories like finance, again auto, which will continue to spend. So these are very category-specific spends that are happening in quarter 4.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [26]

--------------------------------------------------------------------------------

Sure. Got the answer.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [27]

--------------------------------------------------------------------------------

And another important point is media entertainment is an industry where growth will come with a lag. When overall economy does well, as far as this major market is concerned, these corporate advertisers are concerned, they will not immediately start spending. They will -- of course, they'll spend if they are better off, but then the growth to this industry will return with some lag. Whether it's radio or print or digital or outdoor as it is, besides TV, the group is already heavy in all other media platforms. And even in TV you have seen, Zee has reported 16% degrowth in advertisement revenue. So I mean, like plight of everyone is the same. Once the overall economy does well, then only these corporate advertisers who belong to the national market will start expanding.

--------------------------------------------------------------------------------

Vikram Kotak;ACE LANSDOWNE Investments;Analyst, [28]

--------------------------------------------------------------------------------

Fair point. No, I understood, Mr. Agarwal. And I'd say a very good job done by you and your team, I think, both by cutting the cost and increasing the smaller retailers and all that. I think it is very, very prudent job in this soft time. So congratulation on that.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [29]

--------------------------------------------------------------------------------

Thank you very much.

--------------------------------------------------------------------------------

Operator [30]

--------------------------------------------------------------------------------

We take the next question from the line of Amarjeet Maurya from Angel Broking.

--------------------------------------------------------------------------------

Amarjeet S. Maurya, Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps [31]

--------------------------------------------------------------------------------

Considering the current market scenario, is it possible to reduce the EV value of RBNL? And apart from that, my next question is, how much is currently debt on the RBNL? And how you'll fund -- if acquisition is happening, so how will you fund?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [32]

--------------------------------------------------------------------------------

Yes. As we mentioned, currently now we will assume uncertainty in the sense that MIB has not yet approved the transaction. We are in waiting. Only after the approval comes in, we will evaluate the valuation. We will evaluate other modalities. Currently, we are just disappointed that approval has not come. So I mean rest of the discussions will take place only when the approval comes.

--------------------------------------------------------------------------------

Amarjeet S. Maurya, Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps [33]

--------------------------------------------------------------------------------

Okay. So any idea what our current debt on RBNL?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [34]

--------------------------------------------------------------------------------

Current debt has not increased, that much we know. I mean like, on that front there is no worry. They are continuing to make money out of the business. Business is going on as it should have. And of course, what business has not yet been benefited from, that was probably the synergic benefits which would have flowed to them if the approval had come on time.

--------------------------------------------------------------------------------

Amarjeet S. Maurya, Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps [35]

--------------------------------------------------------------------------------

Sir, how will you be funding?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [36]

--------------------------------------------------------------------------------

It all depends on the value which is finally determined with the approval as it is. When we were signing the agreement in the month of June, clearly there was a different means of financing. And now if the value gets reduced, then in that case, there will be different means of financing. This currently, we have not thought of. We are all focused to get the approval for our [buyback]. And as of that date, when we sign the balance sheet -- or when we sign the agreement, that time MBL had a cash of about INR 150 crore, INR 160 crore. Now MBL has a liquidity of about INR 250 crore. So as it is, our liquidity stands improved by INR 100 crore. So to that extent, our requirement to have fund from outside, if [our partners have] any, may be in form of loan, may be in form of intercorporate deposit from holding company, right, to some extent, that is [a bridge].

--------------------------------------------------------------------------------

Amarjeet S. Maurya, Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps [37]

--------------------------------------------------------------------------------

Do you have any idea about RBNL numbers, 9-month number? Any sense?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [38]

--------------------------------------------------------------------------------

No, we officially don't have those numbers, but we have fair idea. I mean like, they are doing okay. They are doing...

--------------------------------------------------------------------------------

Amarjeet S. Maurya, Angel Broking Private Limited, Research Division - Senior Research Analyst of Mid-Caps [39]

--------------------------------------------------------------------------------

In line with the industry, like our performance?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [40]

--------------------------------------------------------------------------------

In terms of revenues on expected lines in the given circumstances. But on cost front, they are slightly higher. And as I was mentioning, if approval had come, probably they would have derived cost synergies.

--------------------------------------------------------------------------------

Operator [41]

--------------------------------------------------------------------------------

We take the next question from the line of Anuj Sharma from M3 Investments.

--------------------------------------------------------------------------------

Anuj Sharma;M3 Investments;Analyst, [42]

--------------------------------------------------------------------------------

On the approval, I just wanted to understand, it's a simple binary operation wherein you submit for approvals and 1 fine day, you get approvals. All this series of conversation with the relevant ministry and you exactly know where you are. So just some clarity on how does the approval process move?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [43]

--------------------------------------------------------------------------------

I wish what you said earlier was true. You just apply and you get it, right, after a given period of time or say, a reasonable period of time. Unfortunately, that is not true. In case of any permission approval, you see from -- let me confine myself to the MIB. So in fact there is -- after you apply, there is hardly any communication -- official communication which happens between the applicant and approver. Although we keep following up and we keep getting feedback where we stand, but then it is just hearsay, nothing on paper.

--------------------------------------------------------------------------------

Anuj Sharma;M3 Investments;Analyst, [44]

--------------------------------------------------------------------------------

Okay. So the fact that you might get approval before March or after March is certainly just -- it just could happen, it just could not happen. You wouldn't get anything for that.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [45]

--------------------------------------------------------------------------------

Yes, yes, yes. Because we applied it in the month of July, 6 months have gone. Normally, this is what is the time period which MIB takes. But then that is also getting over. In the next 2 months, we should get it, ideally, because it has already over delayed. And in case we don't get it, then we'll have to have a relook at the transaction in entirety.

--------------------------------------------------------------------------------

Anuj Sharma;M3 Investments;Analyst, [46]

--------------------------------------------------------------------------------

And just one last question on the same point. Would you -- if let's suppose, in the event it is denied, would you get a reasoning as to why it was denied to you?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [47]

--------------------------------------------------------------------------------

Again, there is no standard rule. Even we may -- in fact, that denial also is not something which is compulsorily coming from MIB. They will just keep quiet, as it has happened to us in case of Ananda Offset, right, there is no written communication from them that your transaction has been disapproved. That is something which we came to know when we followed up with them.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

We take the next question from the line of Jaikishan Parmar from Angel Broking. Mr. Jaikishan Parmar, your line is unmuted, please go ahead with your question. As there is no response from the current participant, we take the next question from the line of Ashish Kumar from Infinity Alternatives.

--------------------------------------------------------------------------------

Ashish Kumar;Infinity Alternatives;Analyst, [49]

--------------------------------------------------------------------------------

Congrats on a good set of results in very challenging times. I had a question in relation to the acquisition -- proposed acquisition. In case you are unable to get approval from MIB for any reason whatsoever, how do you see the whole industry structure unfold because that is -- Big FM is a large player in the market. And going forward, I mean while they make positive EBITDA probably, but the debt is unsustainable and so it's a matter of time before they will fold up. So how do you see the industry structure fold up over the next, let's say, 12 to 24 months, in case that happens?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [50]

--------------------------------------------------------------------------------

In case we don't get the approval, it is very, very unfortunate for everyone, everyone. I mean this is a good asset. And what you say, if it happens, clearly, I mean like -- what should I say? It will be a national loss. I mean like, whatever [of the] market share they are holding, right, I'm not sure whether the entire share will get distributed over the remaining players. Maybe that market gets shrunk to some extent, and some share of theirs gets distributed amongst the [invested] players or remaining players.

--------------------------------------------------------------------------------

Ashish Kumar;Infinity Alternatives;Analyst, [51]

--------------------------------------------------------------------------------

But in your discussions with MIB, have they indicated whether they will, let's say, if it comes to that unforeseen eventuality, will they be open to auctioning it in NCLT or reauctioning the same licenses again?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [52]

--------------------------------------------------------------------------------

This is -- I mean all this is very grey, yes, let me tell you, because I mean like, RBNL also owes a significant amount of money to the mutual funds, to the banks, et cetera, et cetera. I am really wondering what will happen to that amount. This liability, we had committed to take over, right, as a part of consideration for acquisition of the asset. If that also does not happen, if the approval does not come, of course that cannot happen. And in that case, that significant amount will become bad for bank as well as mutual funds.

--------------------------------------------------------------------------------

Ashish Kumar;Infinity Alternatives;Analyst, [53]

--------------------------------------------------------------------------------

No, absolutely, this is painful for everybody because there's lots of jobs and everything else is...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [54]

--------------------------------------------------------------------------------

In all about, I think if I'm not mistaken, Jimmy, you can correct me. I think they have about 600, 700 employees also.

--------------------------------------------------------------------------------

Jimmy Oza, Music Broadcast Limited - IR Executive [55]

--------------------------------------------------------------------------------

600.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [56]

--------------------------------------------------------------------------------

600 employees also. I mean, destruction of a national asset, loss of 600 -- loss of job for 600 people, and I think about INR 600 crore is the amount of debt which is owed to bank and mutual fund put together. I mean...

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [57]

--------------------------------------------------------------------------------

And including the money that the government itself gets in terms of license fee, et cetera.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [58]

--------------------------------------------------------------------------------

Absolutely right.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [59]

--------------------------------------------------------------------------------

Given the situation today, I think the government should be wanting to get as much revenue as they want from...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [60]

--------------------------------------------------------------------------------

Absolutely, right. And going to NCLT, again they'll serve no purpose because if MIB does not approve, NCLT will also not be able to do anything.

--------------------------------------------------------------------------------

Ashish Kumar;Infinity Alternatives;Analyst, [61]

--------------------------------------------------------------------------------

Right, sir. But sir, let's say the scenario does unfold in that, you mentioned that the industry may shrink. Why would the industry shrink? I would think that the existing guys would just kind of increase their market share. Would...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [62]

--------------------------------------------------------------------------------

It doesn't happen that easily, because if they have, say 15% market share, maybe there 10%, 11%, 12% only gets distributed. But then you lose -- I mean, the market will get shrunk, at least by some percentage. Madam will -- madam can confirm this fear of mine or can reject this fear of mine, but then this is what I feel.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [63]

--------------------------------------------------------------------------------

No, Mr. Agarwal is absolutely right because you have to also see that -- it's just not a me-too brand, which was one of the reasons that we were very keen to acquire it. It's got a differentiated position of its own as a retro brand for a slightly older audience, et cetera, et cetera. So that segment will cease to get covered by Big FM when this brand closes down, right? So -- and yes, everybody else, including us, will fight hard to get as much share as possible, but certainly there will be erosion.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [64]

--------------------------------------------------------------------------------

Yes. And more importantly, RBNL may be having a few stations where there is no other competitor. So that will vanish altogether.

--------------------------------------------------------------------------------

Ashish Kumar;Infinity Alternatives;Analyst, [65]

--------------------------------------------------------------------------------

Okay. I wish you all the best for the acquisition. And Apurva, if I can ask you a little bit -- another question, maybe I missed that. Are we seeing any improvement in terms of the sentiment in this quarter? Or how do you see it kind of going forward in terms of the government spending, especially in light of the Delhi elections?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [66]

--------------------------------------------------------------------------------

I would think as of now, we are not seeing any kind of improvement anywhere. And as I explained in the previous question, too, government clearly is not going to come back in terms of spending. Some of the categories -- because it is quarter 4 and they come only in that category -- in that particular season. Like finance will come back and spend, retailers and local advertisers are continuing to spend, but it is broadly the sentiment and the feeling is exactly the same as it has been in the previous 6, 9 months.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [67]

--------------------------------------------------------------------------------

As group -- let me tell you, as group, we have reconciled to the fact that the government is not going to come back so soon. Our government is not going to give us that kind of revenue ever. We also have to look at government as another corporate which is having pressure on their bottom line. So when we can cut down the cost, why will they not cut down the costs. So we are gradually, or rather we are already, reconciled as group that we should not in future also depend too much on government. Whereas we may have reconciled to this fact, it will take some time before we fill that gap. It is not only radio, but even the print has suffered on account of lower spend by the government. That is different story. That -- print has suffered least amongst all, as far as government spend is concerned. But fact of the matter is, you expect from each category growth every year. You do not expect degrowth, but that has happened to print as well. So let us reconcile to the fact that given the kind of deficit what government has, given the fact that, that government is not able to pay our old bills, dependence on government for the revenues may not be justified going forward. So we will have to fill this gap, maybe it may take 6 months, maybe it takes 8 or 9 months, maybe it takes us 1 year, but then we will have a base, which is not going to -- which is not -- which is -- we will have a base after that, which will only grow, which will not have that kind of a shock what we have had in this [round].

--------------------------------------------------------------------------------

Operator [68]

--------------------------------------------------------------------------------

We take the next question from the line of Jinesh Joshi from Prabhudas Lilladher.

--------------------------------------------------------------------------------

Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [69]

--------------------------------------------------------------------------------

Yes. Just 2 questions. I wanted to know what is the government contribution in this quarter. If you can just share the number.

--------------------------------------------------------------------------------

Unidentified Company Representative, [70]

--------------------------------------------------------------------------------

4% she said.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [71]

--------------------------------------------------------------------------------

The share was just 4%.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [72]

--------------------------------------------------------------------------------

4% was for the -- for 9 months. This quarter has been...

--------------------------------------------------------------------------------

Unidentified Company Representative, [73]

--------------------------------------------------------------------------------

It has been at around 7%.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [74]

--------------------------------------------------------------------------------

7%.

--------------------------------------------------------------------------------

Unidentified Company Representative, [75]

--------------------------------------------------------------------------------

All government put together.

--------------------------------------------------------------------------------

Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [76]

--------------------------------------------------------------------------------

Okay. And inventory utilization in legacy?

--------------------------------------------------------------------------------

Operator [77]

--------------------------------------------------------------------------------

Joshi, I'm so sorry to interrupt, requesting you to please speak a bit louder. Sir, your audio is not very audible.

--------------------------------------------------------------------------------

Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [78]

--------------------------------------------------------------------------------

Yes. Okay. I wanted to know what is the inventory utilization in legacy and phase III stations?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [79]

--------------------------------------------------------------------------------

Yes. It's at 55% in legacy and phase III is at 38%.

--------------------------------------------------------------------------------

Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [80]

--------------------------------------------------------------------------------

38%, okay. And just one last bit. In the initial remarks, you mentioned that we are targeting a fixed cost reduction of about INR 16 crores on an annualized basis. So if you can just highlight which cost heads are going to see a maximum reduction? And how sustainable is this?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [81]

--------------------------------------------------------------------------------

Let me elaborate on this before madam explains it further. What she said total cost reduction for the current year is INR 16 crores. On fixed cost base, there is going to be combined saving of 6%, which works out to be about INR 8 crore to INR 9 crore per annum, and this is what is sustainable. Am I right?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [82]

--------------------------------------------------------------------------------

Actually, this is -- the figure is slightly higher. The entire saving on an annualized basis -- on a permanent basis year-on-year will be around INR 12 crores to INR 13 crores. And the mix of this is really -- there has been a lot of efficiency that we put in, in the GOE cost, in the salary restructuring that we've done, in the manpower recruitment itself. So all of this will remain year-on-year, and that will become the new base that we are talking about.

--------------------------------------------------------------------------------

Operator [83]

--------------------------------------------------------------------------------

We take the next question from the line of Sachin Shah from Emkay Investment Managers.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [84]

--------------------------------------------------------------------------------

Yes. I just wanted to understand that just in case if you are lucky enough to get this approval in our time frame. Earlier, we had this plan of utilizing our cash reserves and over and above that, we would have also raised money either through debt or through some equity dilution at our end. But the market cap of our company has already shrink quite a bit. So is there any thought that how will we actually fund this balance amount? Or will you be actually renegotiating the entire -- but I think it was a binding deal, so is there scope to renegotiate the price also, that we are going to pay to -- buy this entire thing at the intended EV value?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [85]

--------------------------------------------------------------------------------

What you say is right. We, as of now, do not know what will be the balance. That we'll know only after the approval comes, then we will have discussions with the RBNL owners.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [86]

--------------------------------------------------------------------------------

Sorry, can you elaborate a little bit more because I did not get exactly what you are trying to say?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [87]

--------------------------------------------------------------------------------

INR 1,050 crore, what you said, right? That was something which we had agreed to, but the way the government approval has got delayed, right, which was -- and which is unexpected. In such a case, lot of things which would have happened, right, could not take place. And that is something which gives us the right to discuss again about the valuation.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [88]

--------------------------------------------------------------------------------

Oh, that's interesting. So although we have made a binding offer, but it was for the time frame and the time frame is now more or less passed. So there is a scope to renegotiate the price, is what you are seeing?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [89]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Operator [90]

--------------------------------------------------------------------------------

(Operator Instructions) Next question is from the line of Durvesh Gupta (sic) [Sarvesh Gupta] from Maximal Capital.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [91]

--------------------------------------------------------------------------------

Apurva, first question is on the market share. So looking at the...

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [92]

--------------------------------------------------------------------------------

Can you speak a bit loudly?

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [93]

--------------------------------------------------------------------------------

Yes. I was having a question on the market share. So this has been more or less very stable for us as well as the competitors. So is there any plan to increase it over time? Or if you can throw some more color on what are we going to increase our market share as such?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [94]

--------------------------------------------------------------------------------

Yes. As you can see, the market share has been and you are rightly saying this has been fairly steady. And radio broadly operates like that. It's unlike television, where week-on-week there are new programs coming, going out, and therefore the market share changes. Obviously the attempt always will be for Radio City, given that it is a legacy leader, to try and be #1. And if not #1, #2 in -- and a consistent steady #2 in all our markets. So Delhi is 1 station that we worked pretty aggressively at in the last 1 year. And after that, it has moved to #2. Historically, it used to operate at a #3 or #4 position for a very, very long time. Bombay is a market that we believe that we can do far better and there is a lot of work that is right now going on in content change in Bombay station itself, so that we can recapture the original leadership slot that we had. So work is going on there. Apart from that, I would say that 2 more things that we are working on is, obviously trying to give a consistent quality in all our markets, which is a daily job practically; and the other is to work very closely with other measurement groups, whether it is the IIS or whether it is the television ratings to see how we can look at multimedia analysis of measurement. So in conjunction with TV, what radio delivers; in conjunction with print, what TV -- what radio delivers because I think it is very important at this stage to be able to showcase how all different 360 media works together, because increasingly, that is becoming the need of the hour by the client and a client would like to see how they work in synergy with each other.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [95]

--------------------------------------------------------------------------------

[So what] in the balance sheet by end of this year, what is the expected figure?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [96]

--------------------------------------------------------------------------------

Sorry?

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [97]

--------------------------------------------------------------------------------

If the acquisition does not work out, then what can be the expected net cash amount in the balance sheet by end of this year?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [98]

--------------------------------------------------------------------------------

As of now, we have about INR 250 crore. And I think by the year-end, the cash should be about INR 225 crore because we have to pay INR 50 crore of debt in the month of March.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [99]

--------------------------------------------------------------------------------

Understood. And would it be reasonable to see that in case in the next few months we don't get the acquisition done, then the company would endeavor to return the cash to the shareholders?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [100]

--------------------------------------------------------------------------------

See, Jagran has always believed in returning the excess cash. So be rest assured about it. This cash is preserved for acquisition, right? And whatever is the surplus cash, not only this, but whatever we generate in future also, we would not like to keep it with ourselves. We'll continue to follow the policy which Jagran has followed since the listing.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [101]

--------------------------------------------------------------------------------

Understood. And is there a possibility of us filing a case in the court against the MIB to not -- for not going ahead in terms of either saying yes or no to the deal?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [102]

--------------------------------------------------------------------------------

There are all possibilities. There is no denial to that solution of yours. There are all possibilities, right? But fact is, how much you can take on government, that is the question to be thought out.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [103]

--------------------------------------------------------------------------------

Yes. Because even earlier, they didn't give any permission to the Essel Group, which was structured in a different manner. And now the same thing is happening in this...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [104]

--------------------------------------------------------------------------------

Especially in MIB there are lots of problems, right? MIB is government's ministry, which we have been dialing -- which we have been dealing with for past 15 years. We have gone to them from time to time their approval, and none of the approvals have come that easily.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [105]

--------------------------------------------------------------------------------

Yes. But I think Hindustan Times Group did acquire Radio Nasha or some...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [106]

--------------------------------------------------------------------------------

Radio One they have acquired, but there also they got stuck up. Ultimately, they had to do the open offer. They had to acquire the company. And it became so complicated a matter, right? Ultimately, they got it fine. But in this case, in case of RBNL, right, there is nothing as such one can do. First of all, the person who has to approve it should inform us why he is uncomfortable in giving the approval, then only you can think and put them some solution. There are -- if there is an arbitrariness, then you can't do much, except you go to the court, as you were suggesting.

--------------------------------------------------------------------------------

Sarvesh Gupta, Maximal Capital - Founder [107]

--------------------------------------------------------------------------------

Understood. And just one final suggestion on both the presentations for Jagran as well as Radio City. I think if you can just finalize 1 format, whether it be Y-o-Y numbers or Q-o-Q numbers, that would be helpful because it keeps shifting from Q-o-Q to Y-o-Y. And I think given the seasonality in these businesses, especially around festive season, I think it would be better if we could stick to one standard Y-o-Y measurements for all the group presentations.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [108]

--------------------------------------------------------------------------------

We'll make a note of it.

--------------------------------------------------------------------------------

Operator [109]

--------------------------------------------------------------------------------

We take the next question from the line of Sachin Shah from Emkay Investment Managers.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [110]

--------------------------------------------------------------------------------

So 1 of the things when we announced this deal, the way we were at least perceiving it is that, that will be a very high-growth opportunity for the business for the next 3, 4 years, because overall even if the markets don't grow so well, but we will be able to do that. So assuming that this is not happening because we are very close to [it] for some time, any thoughts on how do we expect to actually get a higher growth for the next 3, 4 years, better than the -- much better than the market? So yes, so that was my first question.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [111]

--------------------------------------------------------------------------------

I think if you look at the situation that we are standing at currently, right, the base has gone down by 15%, 16% for the whole industry. I think we are starting to build from this space. And as Mr. Agarwal earlier said that we are all quite clear that the government opportunity is not going to come back, which is all maybe seen as a blessing in disguise because there was a big chunk sitting there. So I think the first bit will be -- we have now good inventory available with us. And how do we start reaching out to the advertisers who we could not service earlier because we always were running at -- for example, at prime time, at full inventory, et cetera, et cetera. So I think there's a lot of opportunity right now to go to advertisers who are very big on other media and not big on radio. So if you even look at just commercial advertisers and even if you look at the top 200 advertisers of the country, their share on radio is just around 3%. So I think there's a big opportunity that is lying there to go and aggressively pitch to them with creative solutions, which we have done very well in the past, and look at higher than normal growth.

I think within radio itself, there's a fair amount of potential existing. Also, we must remember that when -- in 2015, '16, when the new set of frequencies were bought by all radio players, including Radio City, just -- and within the first year, all of us grew very aggressively. We -- in 1.5 years, we had broken even in all the new markets, and then we were hit by the slowdown. So that trajectory is still available to all of us. So once the economy comes back, we can see going back to that growth that we were seeing in that first 1.5 years after all these new stations launched. I mean, as [our data] just pointed out, they are at 38% utilization. Clearly, there is an opportunity to take it straightaway to 55%, 58%, which is what the rest of the markets are operating at, and we've seen that growth happening earlier. So I think that's the second opportunity.

The third basis, and currently we are exploring that pretty aggressively, how do we combine all the properties that exist within the Jagran system itself, the [60] properties that exist between outdoor and radio and digital and see how -- that synergy is something that we can share with our clients to see that they get that multimedia benefit. So again, I think there is an inordinate growth opportunity there. And of course then acquisitions which are complementary, is something that we can think of. But I would right now focus on these three, which would give us, in a benign economy, a high double-digit growth.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [112]

--------------------------------------------------------------------------------

Fair enough.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [113]

--------------------------------------------------------------------------------

And more importantly, if whatever goes, gives you an opportunity also. If we are thinking government is not going to come back, whatever space will be vacated by them can be sold at much higher price than what government was giving. Radio is one medium where government has not increased any rate for quite some time. Print got an increase of 25%, I think, last year. Radio has not got. So that may prove to be a blessing in disguise because our inventory utilization, which used to be in the range of about 70%, 80%, has gone down to 55%. In case of new stations, it is just [38]%. So there is a huge headroom available. Earlier, it was rate alone which was to drive significant growth, but now it is inventory plus rate, both will help you.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [114]

--------------------------------------------------------------------------------

Right. Yes. Just one point on, Apurva what you mentioned, where we've heard it before also, that typically radio gets about -- just about 3% or 4% of the total advertisement budget. But 1 thought that comes to mind on that point is that if you think about it, a large part of the radio revenue comes from about 20% to 30% of your reach. So within those specific markets, if we think about it, does radio already have a 20% market share? Like if I have to assume 4% [customer are] 20%? Or are we oversimplifying it?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [115]

--------------------------------------------------------------------------------

No. Of course, not.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [116]

--------------------------------------------------------------------------------

Okay. So within -- say in the top 10, 20 markets, where we have 70%, 80% of our revenue coming from, what would be the radio's share in the overall advertisement by ballpark?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [117]

--------------------------------------------------------------------------------

I don't think it should be more than 10%, what do you say? Because the [all] industry is INR 2,500 crore to INR 2,800 crore.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [118]

--------------------------------------------------------------------------------

It's around 8%, 9%. I mean, it's...

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [119]

--------------------------------------------------------------------------------

It's about 8% to 9%?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [120]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Operator [121]

--------------------------------------------------------------------------------

We take the next question from the line of Chaitanya Jagarlapudi from RW Advisors.

--------------------------------------------------------------------------------

Chaitanya Jagarlapudi;RW Advisors;Analyst, [122]

--------------------------------------------------------------------------------

Just a couple of questions. In a quarter like this, how did Saavn and Gaana do in terms of advertising revenue, if you can give any color on that? Because most of the other segments seem to have degrown significantly. That's the first part. And secondly, in terms of the philosophy itself, Jagran we have known -- has been pretty known for capital allocation decisions. So now we have a scenario where clearly our stock price is perhaps the cheapest ever. And then you have about INR 225 crores, INR 250 crores of cash on the balance sheet on one hand. And secondly, there's an acquisition, which is RBNL, which could provide a growth opportunity, but could also be somewhat expensive in terms of growth. So how do you sort of internally think about this?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [123]

--------------------------------------------------------------------------------

I'll answer the first question, and then request Mr. Agarwal to answer the second one. So as far as Saavn and Gaana are concerned, what we have been observing that their reach has stagnated. So it's not grown beyond that 5%, 6%. And the second bit that we've heard is that there is a lot of attrition that happens in their customer acquisition. So they'll acquire customers, and within 3 months, they lose those customers because people are not using that app, et cetera, again. I would assume -- I don't have figures -- but I would assume if these 2 -- based on these 2 facts, their revenue would not have gone up at all. Indeed, in this kind of an environment, their drop would have been far higher than -- because typically, the smaller niche player lose the maximum in a slowdown. Mr. Agarwal, could you take the...

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [124]

--------------------------------------------------------------------------------

Yes. Will you please elaborate your second part of the question once again?

--------------------------------------------------------------------------------

Chaitanya Jagarlapudi;RW Advisors;Analyst, [125]

--------------------------------------------------------------------------------

Sir, my question is as follows. I think you're probably at 10% or 12% cash flow from operation yield, which is CFO divided by our market cap, which means we are cheap by any stretch of imagination. Secondly, media spends clearly are not under our control, neither the macro. So in a situation like this, we have 2 options. One is utilize the INR 250 crore cash check that we have for buying back the stock because EPS was significantly increased because of the operation.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [126]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Chaitanya Jagarlapudi;RW Advisors;Analyst, [127]

--------------------------------------------------------------------------------

And the second choice is the RBNL acquisition. I mean, it could provide growth opportunity, but how optimal is it, is the question. So I was just wondering what the internal thought processes between these 2 choices?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [128]

--------------------------------------------------------------------------------

Internal thought process is very clear. That has not undergone a change. Yes, the market has been bad, but RBNL is a very good asset, which we would like to acquire. That is our first preference.

--------------------------------------------------------------------------------

Operator [129]

--------------------------------------------------------------------------------

We take the next question from the line of Sachin Shah from Emkay Investment Managers.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [130]

--------------------------------------------------------------------------------

Yes. This is a follow-up to the previous discussion that you were having on the buyback and distribution of cash. So from what I have seen some bit, that our shareholding of the promoter level is nearly 73%, 74%, 75%. And second is also that the arbitrage in terms of the tax saving of buyback has -- is not much anymore. So will buyback be a feasible option at all if the -- or -- because if promoters don't participate in buyback, then the shareholding just crosses beyond 75%. So what's the thought process on that. Hello?

--------------------------------------------------------------------------------

Operator [131]

--------------------------------------------------------------------------------

Sir, just allow me a minute.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [132]

--------------------------------------------------------------------------------

Yes, sure.

--------------------------------------------------------------------------------

Operator [133]

--------------------------------------------------------------------------------

I'm just trying to reconnect Mr. R.K Agarwal. Mr. R.K. Agarwal, you're connected to the conference, and we still have the question in queue.

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [134]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [135]

--------------------------------------------------------------------------------

Should I repeat my question?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [136]

--------------------------------------------------------------------------------

Please do that.

--------------------------------------------------------------------------------

Sachin Shah, Emkay Global Financial Services Limited - Fund Manager [137]

--------------------------------------------------------------------------------

Yes, yes. Okay. So basically what I was saying is that the buyback discussion that we just had, I believe the promoter holding is closer to 73%, 75%. And if you do a buyback and if promoters don't participate like they had done earlier, then that will be a challenge, point number one. And point number two, buyback earlier had some tax advantage. I don't see that, too much of that anymore. So is buyback still a feasible option or dividend will be the other alternate option?

--------------------------------------------------------------------------------

R.K. Agarwal, Music Broadcast Limited - CFO [138]

--------------------------------------------------------------------------------

What you said, that has a limitation, there is no doubt about it. Promoters already have 73%, 74%. So in case a buyback is done, promoters this time also will have to participate. So not that promoters want to participate, but if required, they will participate, number one. To be explained, it is required, number one. Number two, you can also think of partly doing the buyback, partly distributing the dividend. That also you can do. Buyback in all those circumstances is not taxable, right? There are certain exemptions also available, maybe that RBNL -- sorry, MBL is able to avail that exemption and do the buybacks.

--------------------------------------------------------------------------------

Operator [139]

--------------------------------------------------------------------------------

Next question is from the line of Yogesh Kirve from B&K Securities.

--------------------------------------------------------------------------------

Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [140]

--------------------------------------------------------------------------------

So one more of a bookkeeping question. So government contribution was about 7% in revenues, I understand during the quarter. So can I know what has been the decline in the revenues, government revenues on Y-o-Y basis?

--------------------------------------------------------------------------------

Unidentified Company Representative, [141]

--------------------------------------------------------------------------------

For the quarter, at an overall government, revenues have -- the volumes have degrown by 60%. And when we look at only central government, the volumes have degrown by 84%.

--------------------------------------------------------------------------------

Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [142]

--------------------------------------------------------------------------------

So the volume decline, is it a good representative of the revenue decline as well, because the rates will not have...

--------------------------------------------------------------------------------

Unidentified Company Representative, [143]

--------------------------------------------------------------------------------

Yes. Yes.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [144]

--------------------------------------------------------------------------------

It would be broadly -- it would be slightly -- the revenue decline will be slightly less, because the rates are lower. So one would assume that when we are talking about a 60% decline in volume, that translates into around a 50%, 55% decline in revenue.

--------------------------------------------------------------------------------

Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [145]

--------------------------------------------------------------------------------

Right. Sure. And ma'am, could you just give us an update or do you see any opportunities for Radio City to monetize our quality brand on a digital platform? Or any other platform apart from radio?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [146]

--------------------------------------------------------------------------------

We already have a very powerful digital platform, which we've been running for the last -- in fact, we were the first people to start something called planetradiocity.com, which was a mix of -- we had around [40 or 50] radio stations running there. Obviously, as the digital landscape evolves, that also has been evolving. And what we see really happening on digital is a lot more interactive and engaging content, which is, in a sense, a lot more genre-based playlists, a lot more of content like poetry and comedy, et cetera, et cetera. So that product keeps on evolving constantly. As of now, we would be doing approximately revenues of around INR 6 crores from our digital platform.

--------------------------------------------------------------------------------

Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [147]

--------------------------------------------------------------------------------

INR 6 crores per quarter, is it?

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [148]

--------------------------------------------------------------------------------

No, no, per year.

--------------------------------------------------------------------------------

Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [149]

--------------------------------------------------------------------------------

Okay. Right. And I understand this Planet Radio City, this is a web platform, right? Not some...

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [150]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Operator [151]

--------------------------------------------------------------------------------

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Ms. Apurva Purohit for closing comments.

--------------------------------------------------------------------------------

Apurva Purohit, Music Broadcast Limited - Non-Executive Director [152]

--------------------------------------------------------------------------------

We thank everyone for the participation in our earnings call. We have already uploaded the investor presentation on the company's website. And in case of further queries, please do get in touch with any of us or SGA, our Investor Relations Advisors. Thank you.

--------------------------------------------------------------------------------

Operator [153]

--------------------------------------------------------------------------------

Thank you very much. On behalf of Music Broadcast Limited, that concludes this conference. Thank you all for joining. You may now disconnect your lines.