Any current/future capex/capital investment/strategic investment?

Currently, there is hardly any CAPEX; essentially zero CAPEX is being made at present. Any future CAPEX investment will likely focus on evolving technology for distribution of content. Presently, investments are primarily people-driven, especially in digital and content development. Digital business is expected to require ongoing investment in people and content to grow digital playout. There is cash reserve of about Rs. 300 crores allowing flexibility to invest strategically in profitable new frequencies or markets. The company may invest in new frequencies if they are profitable, especially

Any current/future new fundraising through debt or equity?

Currently, Music Broadcast Limited has no debt on its books except for Non-Convertible Redeemable Preference Shares (NCRPS) repayable after 36 months. The company has cash reserves of approximately ₹300 crore, indicating a strong liquidity position. There is no mention of any immediate or planned new fundraising through debt or equity. Any future investments or bids for new frequencies will be made from existing cash reserves, as the company is cash rich. CAPEX is currently minimal, with no major investments planned except potential future technology evolution for digital content distribution.

Future growth expectations in sales/revenue/volumes?

Expecting revenue growth of 17% to 20% year-on-year for the next 1.5 years. Growth driven by a combination of radio business, digital revenues, and on-ground led monetization. Digital revenue currently at 8%, projected to increase to 35%-45% of overall business within 5-6 years. Government advertising spends expected to increase approaching election years, adding to growth. Incremental revenues post 200 crores turnover expected to contribute to PAT, but some margin impact due to digital investments. Radio business will continue growing but not at the high rates seen in past 6-7 years

Future growth expectations in earnings/operating earnings/profits/EPS?

Revenue growth guidance is around 17% to 20% year-on-year for the near future, depending on market performance. EBITDA margins currently at 24%; expectation to sustain similar margins while investing in digital expansion. Incremental revenue beyond Rs. 200 crore turnover expected to flow directly to PAT, but some margin impact due to ongoing investments. Digital business expected to be a stronger EBITDA booster than radio business in the long term. Digital revenues currently around 8%, targeted to grow to 35%-45% of overall business in 5-6 years. Operating profit grew 45% year-on-yea

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Music Broadcast LtdQ2 FY23Entertainment

Music Broadcast Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹6.12Market Cap: ₹209 CrSector: Entertainment

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

0 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

→Expecting revenue growth of 17% to 20% year-on-year for the next 1.5 years.
→Growth driven by a combination of radio business, digital revenues, and on-ground led monetization.
→Digital revenue currently at 8%, projected to increase to 35%-45% of overall business within 5-6 years.
→Government advertising spends expected to increase approaching election years, adding to growth.
→Incremental revenues post 200 crores turnover expected to contribute to PAT, but some margin impact due to digital investments.
→Radio business will continue growing but not at the high rates seen in past 6-7 years; growth supplemented by new digital and experiential revenue streams.
→Expect a sustainable margin around 24%, with ongoing investments impacting margins short term, but aiming for improvement over time.

Margin guidance

Category 3

→Revenue growth guidance is around 17% to 20% year-on-year for the near future, depending on market performance.
→EBITDA margins currently at 24%; expectation to sustain similar margins while investing in digital expansion.
→Incremental revenue beyond Rs. 200 crore turnover expected to flow directly to PAT, but some margin impact due to ongoing investments.
→Digital business expected to be a stronger EBITDA booster than radio business in the long term.
→Digital revenues currently around 8%, targeted to grow to 35%-45% of overall business in 5-6 years.
→Operating profit grew 45% year-on-year in Q1 FY24, outpacing revenue growth of 20%, due to cost optimizations and operating leverage.
→Long-term investments in digital content and technology envisaged to support sustained growth and profitability.

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Fundraise plans

→Currently, Music Broadcast Limited has no debt on its books except for Non-Convertible Redeemable Preference Shares (NCRPS) repayable after 36 months.
→The company has cash reserves of approximately ₹300 crore, indicating a strong liquidity position.
→There is no mention of any immediate or planned new fundraising through debt or equity.
→Any future investments or bids for new frequencies will be made from existing cash reserves, as the company is cash rich.
→CAPEX is currently minimal, with no major investments planned except potential future technology evolution for digital content distribution.
→The focus appears to be on organic growth and investments in people and content rather than raising new funds.

Order book

The transcript provided does not explicitly mention any details regarding the current or expected order book or pending orders for Music Broadcast Limited. However, some relevant insights related to business growth and investments include: - The company is experiencing growth in key advertising categories such as pharma, healthcare, education, real estate, auto, and finance. - Revenue growth is expected in the range of 17% to 20% year-on-year, supported by volume increases and government ad spend recovery. - The company is strategically bidding for new frequencies (about 808 frequencies in 340 cities) if found viable and profitable. - Investments are ongoing in digital platforms and technology to support long-term growth. - Cash reserves stand strong at Rs. 302 crores as of June 30, 2023, enabling flexibility for future opportunities. No direct details on order book or pending orders were provided in the call.

Capex plans

→Currently, there is hardly any CAPEX; essentially zero CAPEX is being made at present.
→Any future CAPEX investment will likely focus on evolving technology for distribution of content.
→Presently, investments are primarily people-driven, especially in digital and content development.
→Digital business is expected to require ongoing investment in people and content to grow digital playout.
→There is cash reserve of about Rs. 300 crores allowing flexibility to invest strategically in profitable new frequencies or markets.
→The company may invest in new frequencies if they are profitable, especially in current dominant states or new attractive states.
→Potential future investment will also include license renewal costs around 7 years from now, with some uncertainty around exact costs.

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