Saregama India Ltd — Q4 FY26

Saregama India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_LQMRSFk9rU Published: 17 hours ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Sargama India Limited Q4 FI26 earnings conference call hosted by 0:09 9 seconds MK Global Financial Services Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask 0:17 17 seconds questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on 0:25 25 seconds your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav 0:33 33 seconds Chhatria from MK Global Financial Services Limited. Thank you and over to you sir. 0:40 40 seconds Uh good afternoon everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Vikram Maherra, managing 0:48 48 seconds director and Mr. Pankashkadia, executive director investor relations. Now I shall hand over the call to the management for 0:56 56 seconds their opening remark. Over to you gentlemen. 1:00 1 minute Thank you and a very good afternoon to all of you. 1:05 1 minute, 5 seconds The quarter 4 of the financial year saw revenue from operations at 287 cr within a yearon-year growth of 19%. 1:16 1 minute, 16 seconds Our highest ever adjusted aida at 133 cr with yearon-year growth of 31%. 1:23 1 minute, 23 seconds and operational PBT at 105 cr which is an year-on-year growth of 37%. 1:33 1 minute, 33 seconds Let me start with music. 1:36 1 minute, 36 seconds Global recorded music grew to close to $ 32 billion in 2025 according to ISBI 1:44 1 minute, 44 seconds with India still under 2% of that despite housing 18% of the world's population. 1:53 1 minute, 53 seconds We in India are operating in the most underpenetrated large music market on earth and Sarikama's entire strategy is 2:01 2 minutes, 1 second built around that 20 year opportunity that is sitting in front of us. 2:08 2 minutes, 8 seconds If I look at financial year at 26 the overall music vertical and for the sake of simplicity now onwards when we talk 2:16 2 minutes, 16 seconds about music vertical we'll combine everything in it music licensing artist management and the retail business all 2:24 2 minutes, 24 seconds the three core elements of music are going to be there under the music vertical together it recorded revenue of 814 cr 2:33 2 minutes, 33 seconds which was 17% year-on-year growth and annual eida stood at 517 cr with a 22% 2:41 2 minutes, 41 seconds year-on-year growth and an annual net margin of 377 cr which was a 27% yearon-year margin growth. This is music 2:49 2 minutes, 49 seconds vertical overall uh licensing artist management and retail. 2:56 2 minutes, 56 seconds There was some concern that was expressed at the end of quarter 2 from multiple um 3:05 3 minutes, 5 seconds partners and investors about a music vertical growth trajectory and at that time the management team had attributed 3:13 3 minutes, 13 seconds it solely to the phasing of the music content releases. 3:18 3 minutes, 18 seconds Post quarter 2 as the content started getting released in quarter 3 and quarter 4. Sarama is back on the growth track. 3:27 3 minutes, 27 seconds The other factor that really helped us in this quarter 4 growth rate is moving out of AL Winks revenue in the 3:35 3 minutes, 35 seconds denominator. In 25 Q4 had wink re did not have wink revenue which helped us a lot. So we are completely out of the 3:44 3 minutes, 44 seconds cycle of free platform shutting down and that has started showing in the growth numbers of our music vertical. In fact, 3:52 3 minutes, 52 seconds H1 had seen a growth of 7% while H2 has seen a growth of 26%. 4:00 4 minutes What I'm proud of sharing is that H2 is also became a big testament to our music business guiding principles. 4:11 4 minutes, 11 seconds When dire one song started picking up in the month of December, we went all out building them further using our digital 4:20 4 minutes, 20 seconds marketing muscle. The pocket aces digital footprint played a massive role here. This ensured that the success of 4:29 4 minutes, 29 seconds the album was extended over a much longer duration. Today, even after what close to 5 months of the release of the 4:38 4 minutes, 38 seconds album, we are still daily generating 6 million streams on the audio OTD and 11 million views on YouTube. 4:47 4 minutes, 47 seconds The song Shahara stays at the number one global position. I'm repeating number one global position on YouTube. Even 4:56 4 minutes, 56 seconds today, we very strongly believe within the company that hit songs don't come every 5:03 5 minutes, 3 seconds day, but when you get one, and in this case, we got a full hit album, you have to really make it count by pushing it aggressively in terms of marketing and promotions. 5:15 5 minutes, 15 seconds The second principle within the music vertical that I've I think I reiterated multiple 5:22 5 minutes, 22 seconds times in front of all of you that we very strongly at Sarikama believe in is that the music purchase has to be done done only with a financial lens in front of us and never that of vanity. 5:35 5 minutes, 35 seconds After the massive success of Durund one, it was very tempting for us as a company to also go for Durunda 2 music. 5:44 5 minutes, 44 seconds In fact, there was a lot of peer and partner pressure around it. Everybody expected Sarama to go and back render 2 music. 5:54 5 minutes, 54 seconds But I'm very proud that the the the acquisition team stood its ground and refused to buy the album because of the pricing. 6:03 6 minutes, 3 seconds The expectations of the producer just did not fit into a 5-year payback guideline. 6:10 6 minutes, 10 seconds And we said no. And I'm proud to share our stand our position actually stands vindicated 6:18 6 minutes, 18 seconds today. We did the right thing by not going out there and picking it up. So we as as we continue growing the music 6:27 6 minutes, 27 seconds vertical, we are we we are we are steadfastly maintaining that we will grow it 6:36 6 minutes, 36 seconds keeping in mind strong strong economic principles and never do things which are coming out of anity. 6:44 6 minutes, 44 seconds Overall the company released close to 1200 original and premium recreations across Hindi, BJP, Punjabi, Tamil, Telu, 6:51 6 minutes, 51 seconds Mallayalam, Marathi and Bengali languages. 6:55 6 minutes, 55 seconds Our spend this year on new music content was close to 235 cr and another 104 cr 7:02 7 minutes, 2 seconds was spent on doing inorganic purchases of various small and midsize catalogs. 7:08 7 minutes, 8 seconds A spend of 235 cr on new content was lower than what we had planned. And this specifically happened because some of 7:15 7 minutes, 15 seconds the bigger movies that we had planned to release uh in Q4 actually got pushed. I think the biggest name will be Sanjalila 7:24 7 minutes, 24 seconds Banchari Love and War and Telu superstar Nani film Paradise. 7:31 7 minutes, 31 seconds During this quarter, the company completed its strategic investment in Banshali Productions through a 7:37 7 minutes, 37 seconds significant minority ownership with the valuation linked to the financial performance of the uh uh Banchali 7:46 7 minutes, 46 seconds Productions company over the next three years. This arrangement provides Aarama with an exclusive access to marquee 7:53 7 minutes, 53 seconds Hindi film music at a predictable cost based on a predefined formula. 7:59 7 minutes, 59 seconds There is a terrific lineup of films planned by Bansali Productions. 8:06 8 minutes, 6 seconds This in turn ensures that Sarajama secures our A and B plus Hindi film music album requirement for next 24 to 8:15 8 minutes, 15 seconds 30 months. We won't have to go hunting in the market for it. Our overall lineup for financial year 27 includes the 8:24 8 minutes, 24 seconds delayed and now scheduled of uh album of love and war of Mr. Bansali 8:32 8 minutes, 32 seconds Dharma's production starring Karthikarian called Nagzilla Rajnik Khan's next Tamil film Shiva 8:40 8 minutes, 40 seconds Karti Kane's Tamil film son Nani's Telu expected blockbuster paradise amongst others 8:49 8 minutes, 49 seconds during the year we also want to further consolidate a leadership position that we got with the acquisition of Navh 8:55 8 minutes, 55 seconds Haranvi and this year we plan to go back and build that one weakness that we had. We 9:03 9 minutes, 3 seconds want to fill in that gap which is Punjabi music and we have we have done a homework over the last 6 months debating 9:11 9 minutes, 11 seconds on what strategy to adopt. We are confident we have something good coming away now and hopefully the results will start showing within the next two to three quarters. 9:23 9 minutes, 23 seconds Overall, we continue with a guidance of a 5year payback period followed by anything between 55 to 75 years of returns. 9:34 9 minutes, 34 seconds Music catalog globally is increasingly being treated as an infrastructure-like inflation linked asset. It's long-term, 9:43 9 minutes, 43 seconds it's predictable and its value keeps on going up as platforms keep on increasing their own subruion prices. And that's a 9:50 9 minutes, 50 seconds reason why institutional capital from the likes of Bane or Apollo KKR is now flowing into this space through various 9:57 9 minutes, 57 seconds kinds of JVS and direct catalog purchases. All of this is happening at this juncture globally. 10:04 10 minutes, 4 seconds We at Charama with 180,000 songs catalog growing at 5,500 new releases per year is exactly the kind of asset that compounds value over decades. 10:20 10 minutes, 20 seconds Let me touch the subscription part of the audio business. This year saw a focused effort by platforms like 10:27 10 minutes, 27 seconds Spotify, YouTube and Shawan to build paid subscription revenue. The net result was an improvement in our revenue 10:36 10 minutes, 36 seconds sarama's revenue despite revenue from the free remaining flat. If we have been able to go back and show growth, 10:44 10 minutes, 44 seconds subscription has already al already started playing a role there. A recent Indian customer study that was conducted 10:52 10 minutes, 52 seconds and shared by eny and imi stated that 64% of free music customers in India are 11:01 11 minutes, 1 second ready to shift to a reasonably priced paid service if all free services in the 11:07 11 minutes, 7 seconds market stop. Now this is a very this is data right now which has been shared in the latest uh report also. Uh it just revalidates what we all believe in. 11:20 11 minutes, 20 seconds Indian customer is not stingy. Indian customer values music and is ready to pay. But if the free option is 11:28 11 minutes, 28 seconds available, people always prefer the free option. But the moment free option goes away, Indian customer is ready to pay. 11:36 11 minutes, 36 seconds We maintain a bullish position on the subscription growth in the country. Just to put it in perspective, 11:42 11 minutes, 42 seconds the page streaming penetration is 67% in Sweden, 57% in US, 50% in UK, 13% odd in 11:52 11 minutes, 52 seconds Brazil and China versus less than 3% in India. This is according to the Goldman Sachs estimate and this is a percentage of the internet users in any country. 12:05 12 minutes, 5 seconds With every percentage point of penetration translating to 14 million paying subscribers, the runway in India 12:13 12 minutes, 13 seconds is structurally larger than any other larger market in the world. And Sarama plays in this market. 12:23 12 minutes, 23 seconds The other part that everybody wants to talk about is AI. 12:28 12 minutes, 28 seconds While at Charama we are watching the space carefully and are not have not committed any significant capital to it at this moment. Our position in the 12:37 12 minutes, 37 seconds company is that owned music which is artistdriven premium music is going to become far more valuable and not less 12:46 12 minutes, 46 seconds valuable in this AIdriven world where a lot of AI slop is coming in. 12:51 12 minutes, 51 seconds Authenticated human- created music with clear provenence becomes your premium asset because customer at the end of the day is not just relating to a song. 13:02 13 minutes, 2 seconds Customers also relate to the artist behind the song. That artist might be the actor on whom the song is pictured or the singer who has gone out there and 13:11 13 minutes, 11 seconds sung the song. This is something that this mass generated AI slop which is flooding the ecosystem can never 13:18 13 minutes, 18 seconds provide. So in the long run companies like Sarama with having uh the most premium catalog of the country across 13:26 13 minutes, 26 seconds multiple languages is going to become even more sought after from the from the song value perspective. 13:35 13 minutes, 35 seconds At the same time, we are realizing that AI is creating new licensing opportunity as can be witnessed by the deals signed 13:44 13 minutes, 44 seconds by various global music labels with various generative AI platforms. 13:51 13 minutes, 51 seconds At the right time, we will also engage commercially with many of these people. 13:56 13 minutes, 56 seconds So, it may become one more way in which our revenues can our um IP can be monetized. 14:04 14 minutes, 4 seconds I'll also like to share that we have recently launched a dedicated EI efficiency team 14:11 14 minutes, 11 seconds uh headed by a very very senior uh tech person from the company. This team is analyzing every peopleheavy process in 14:19 14 minutes, 19 seconds the company. every area right now whether it's infringement tracking or any other operations path and is finding 14:27 14 minutes, 27 seconds smarter AI based solutions that can improve the overall efficiency and effectiveness of all these processes 14:38 14 minutes, 38 seconds as promised pocketes has reached briem to it pocket's team was committed to it 14:48 14 minutes, 48 seconds and I'm very proud that we finally went out there and delivered to what we had promised. The company has started 14:55 14 minutes, 55 seconds making money and we believe that in uh as we will go forward the profitability of the company will start going up. 15:03 15 minutes, 3 seconds This is over and above the benefits pocket ends up offering to the music business and the live events business of 15:11 15 minutes, 11 seconds Sarajama. All those benefits are acrewing actually more on the Sarajama side. 15:19 15 minutes, 19 seconds While global majors are today talking about expanding artist brands beyond streaming, we have been quietly building 15:28 15 minutes, 28 seconds it over last three to four years and today it's already a meaningful AIA contributor through our artist management, live events and brand partnerships vertical. 15:38 15 minutes, 38 seconds Artist management. 15:41 15 minutes, 41 seconds The newer vertical under music works by making artists popular through our IP releases and then monetizing them via 15:48 15 minutes, 48 seconds booking for live events, weddings and more importantly brand endorsements. And Sarama gets a share of it. 15:56 15 minutes, 56 seconds During the quarter, we added another 30 odd artists to taking the total artists managed by the company to 300 plus. And 16:04 16 minutes, 4 seconds these artists combined have over 400 million follower and subscriber base on on digital world. 16:13 16 minutes, 13 seconds As content our investment in content goes up so does the investment in the artist. In that case the artists end up making money for us not just from the 16:21 16 minutes, 21 seconds music but also from their uh presence in various live events, brand partnerships. 16:30 16 minutes, 30 seconds So that becomes a second vertical through which you can go back and monetize the artist 16:40 16 minutes, 40 seconds live events. The the other verticles that we people are using to extend our relationship with the artist ended up launching its first music festival IP called un40 in this quarter. 16:52 16 minutes, 52 seconds Instead of competing with other festival that are there in the market, we position our festival uniquely as a 16:59 16 minutes, 59 seconds destination for only people under the age of 40 and hence the name un40. 17:06 17 minutes, 6 seconds Also instead of bringing an international artist to perform at this music festival, we took a conscious call that we will work only with the Indian 17:15 17 minutes, 15 seconds artist and we rather than treating it as a weakness. 17:20 17 minutes, 20 seconds We built it as a unique positioning of the unforting helped. 17:26 17 minutes, 26 seconds Also every other festival in the country has a particular format in which artists come out there and perform during festivals. He turned it on his head and 17:35 17 minutes, 35 seconds said that apart from the artist performing, we will also have standup comedy acts in it and we will have 17:44 17 minutes, 44 seconds physical interactive games along the lines of what Takashi Castle used to do on television earlier. So there were there were games where multiple people 17:52 17 minutes, 52 seconds were participating with each other in a funny enough fashion and I'm proud to say all these gambles that we people had 17:59 17 minutes, 59 seconds taken for unfort,000 footfalls along with eight sponsor branch coming on board. And remember 18:07 18 minutes, 7 seconds this is season one of this festival. We plan to nurture this festival further and make it even bigger in financial 18:14 18 minutes, 14 seconds year 27. We expect this IP to break even by the by uh FI28. 18:21 18 minutes, 21 seconds Overall live events vertical during the year saw a revenue of 62 cr. I accept that this 18:29 18 minutes, 29 seconds vert uh revenue number is far lower than FI25. But please keep in mind FI25 had a 18:36 18 minutes, 36 seconds one-off event which was Dilji Dossange India tour. These kind of tours don't happen at that frequency. So if I remove 18:45 18 minutes, 45 seconds that one-off revenue out even uh the live vertical has seen se seen growth this year. 18:52 18 minutes, 52 seconds FI27 will see us launching a series of small concerts under the Karma live branding targeting middle-aged and older 19:00 19 minutes audiences that enjoy sit-down premium music listening experience. We are also increasing our focus on the American market. 19:09 19 minutes, 9 seconds Tours with Ilia Raja, Sudesh Moslay and Anum Jalot have already been announced. 19:16 19 minutes, 16 seconds Globally, music labels are increasingly focused on monetizing super fans. In fact, Luminate research shows super fans 19:24 19 minutes, 24 seconds spend 105% more than the average listener and 73% of them buy physical merchandise. Carva live and our diaspora 19:34 19 minutes, 34 seconds of focus tools in America target exactly this audience segment within the Indian context. Older, financially comfortable 19:42 19 minutes, 42 seconds and willing to pay a premium for curated experience with artists they grew up listening to. 19:50 19 minutes, 50 seconds Our long-term belief in the potential of live events keeps getting reinforced every quarter and we will continue upping our focus in this area. 20:01 20 minutes, 1 second Brand partnerships as mentioned last time we had created a new vertical called brand partnerships in order to 20:08 20 minutes, 8 seconds maximize revenue from the brand across the various businesses that we have which is music live events and short 20:15 20 minutes, 15 seconds format videos. In this last quarter we partnered with brands such as Scoda, Lakme, Hero, Open Coca-Cola, AIO and and more. 20:28 20 minutes, 28 seconds Let me talk about the last vertical which is video. 20:32 20 minutes, 32 seconds On an annual basis, the video vertical has declined by 43% to 108 cr. Let me 20:39 20 minutes, 39 seconds very clearly state this. This decline is by design and is not happen by chance. 20:45 20 minutes, 45 seconds We have shared this with many of you guys in the past that early in the year last year we we have took a conscious 20:52 20 minutes, 52 seconds call that we will wind down our own uh in-house film production business that we were doing under the UDLI brand name 21:01 21 minutes, 1 second and instead we'll invest in a production house. During the year we zeroed down on a potential partnership with Bansalis 21:09 21 minutes, 9 seconds and went ahead with that. That's the only reason why you are seeing a serious decline in the video vertical and we are 21:17 21 minutes, 17 seconds happy with this. We don't expect video vertical to to go up substantially within the company. The focus will stay 21:24 21 minutes, 24 seconds primarily on TV serals and uh the digital content only primarily short format. All our film ambitions and hence 21:33 21 minutes, 33 seconds our need to secure music of big films that ambition is going to be fulfilled only through our partnership with Bansari Productions. 21:44 21 minutes, 44 seconds As I come to the close of my address, what I'd like to share with you is that India is at an early stage of global streaming curve. 21:54 21 minutes, 54 seconds And keep in mind this is a feature and not a bug. It means our growth is driven by subscriber expansion, arpoo expansion 22:03 22 minutes, 3 seconds and also format diversification simultaneously. 22:07 22 minutes, 7 seconds While the mature western market primary depends only on price hike. Today we have three ways in which we know our revenue is going to go up. 22:17 22 minutes, 17 seconds With that in mind, over the next few years, Sarajama will continue investing in new music content. This will contribute not only to the immediate 22:24 22 minutes, 24 seconds growth but also put the company on a long-term growth path for the music vertical which is uh 22:34 22 minutes, 34 seconds licensed music RS management and retail all combined. We continue with a medium-term guidance of 21 to 23% 22:43 22 minutes, 43 seconds revenue growth um 20 to 21 3% CAGR in terms of revenue with the annual AIDA 22:51 22 minutes, 51 seconds guidance for this vertical being anything between 60 to 65%. 22:59 22 minutes, 59 seconds Tarama's growth narrative will continue to be steady in the medium to long term thanks to the everinccreasing digital consumption both in terms of new 23:07 23 minutes, 7 seconds customers joining the market and existing customers consuming more. With over 650 million plus internet users 23:15 23 minutes, 15 seconds India, our cash reserves, professional managerial depth and access to the soundtracks of the best film, we will be able to drive earnings not just for the 23:23 23 minutes, 23 seconds next two to three years but for the next 20 to 30 years. 23:27 23 minutes, 27 seconds Thank you ladies and gentlemen. Happy to take questions. 23:32 23 minutes, 32 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 23:40 23 minutes, 40 seconds telephone. If you wish to remove yourself from the question queue, you you may press star and two. Participants are requested to please use handsets 23:48 23 minutes, 48 seconds while asking a question. Ladies and gentlemen, we will now wait for a moment while the question Q assembles. 23:56 23 minutes, 56 seconds Our first question comes from the line of Anish Roy from Nama. Please go ahead. 24:01 24 minutes, 1 second Uh congrats on very good uh numbers. My first question is on the two things which you highlighted. First was weakness in Punjabi. So I wanted to 24:10 24 minutes, 10 seconds understand why this uh segment has been a bit on the lower side. Is it because it's niche market or more competitive or 24:17 24 minutes, 17 seconds more expensive and uh uh how much allocation you plan over the next two years in this? And second is on AI IP 24:25 24 minutes, 25 seconds monetization. Uh how how big can this be? Uh any examples from the developed market and if you can talk more about this that is my first question. 24:34 24 minutes, 34 seconds Okay. On the Punjabi side uh we have experimented getting to this market twice over the 24:41 24 minutes, 41 seconds last six years and uh I'll be honest and confess that our strategy never worked out. uh any market that we get into, we 24:49 24 minutes, 49 seconds need to keep a very tight balance between market share and the return on investment which is a fiveyear payback principle. Um the market is a very 24:58 24 minutes, 58 seconds expensive market but we also understand that if you get it right the monetization happens not just from Punjabis living in India but from US, 25:08 25 minutes, 8 seconds Canada and UK also. Now we have been able to crack a model whereby we are working with more and more artist in a 25:15 25 minutes, 15 seconds fashion that we do a combined deal with them both for the recorded music as well as doing live events with with the same 25:23 25 minutes, 23 seconds artist. This is where Sarajama starts getting uniquely placed compared to all other players in the market because we're the only guys who are playing 25:31 25 minutes, 31 seconds across both recorded music and live. And I am fairly confident um hopefully not overconfident. fairly 25:39 25 minutes, 39 seconds confident that we will be able to crack it this time. Um we maybe by the end of the year or end of quarter three we'll 25:47 25 minutes, 47 seconds be in a better position to uh share our performance with you. Anyway, if you start following us on uh any of the 25:55 25 minutes, 55 seconds social media, you will have the answer faster than even I can share with you. 25:59 25 minutes, 59 seconds Uh you were asking about AI. See what we are very clearly seeing that all this uh AI slop which means uh purely AI 26:08 26 minutes, 8 seconds generated content which is from engines which have not been trained on any of the international music cataloges that 26:16 26 minutes, 16 seconds kind of content has come in a very big fashion. It's there. It's there across all platforms. But the fact of life is 26:23 26 minutes, 23 seconds it's seeing no traction. this and all the music labels globally and in India are working very closely with the 26:30 26 minutes, 30 seconds leading three global uh streaming platforms making it very clear that uh the raw when when the the content pool 26:40 26 minutes, 40 seconds is going to get distributed across the labels no value should get 26:47 26 minutes, 47 seconds assigned to content which is getting generated purely or through AI. So there there is there is no revenue leakage 26:55 26 minutes, 55 seconds today. There is no market share loss happening today. And we are hopeful that uh platforms and IP owners will come to 27:04 27 minutes, 4 seconds uh a reasonable um agreement whereby 27:14 27 minutes, 14 seconds the the royalty monies or the the content pool monies will get distributed only to genuine IP and not the AI slop. 27:23 27 minutes, 23 seconds Hopefully I've answered your question. 27:25 27 minutes, 25 seconds Yeah, thank you. Uh my second and last question will be uh you spent 235 crores on new content uh given some of the 27:32 27 minutes, 32 seconds movies which you said have been pushed to FI27. Uh what will be the budget for FI 207? 27:40 27 minutes, 40 seconds Yeah. What will be the budget for FI27 and in terms of uh Airel Wink uh that uh service uh ending essentially where 27:49 27 minutes, 49 seconds would that customer for you would have gone uh if any idea on that? No. So let me answer the first question. 27:56 27 minutes, 56 seconds It's also part of the presentation that uh we are expecting our new content budget to be anything between 300 to 350 28:03 28 minutes, 3 seconds K this year. That's a range it will be in. Um as for Airel Wink is Airel Wink 28:09 28 minutes, 9 seconds shut in November 24. Um the customers have already got distributed across the 28:16 28 minutes, 16 seconds other platforms. the what I can tell you um which are the other platforms uh it will be wrong on my part to tell you where did they exactly move that's a 28:25 28 minutes, 25 seconds platform prerogative um there's Spotify there's sav there's Amazon there's Ghana 28:31 28 minutes, 31 seconds there's Apple and then there's YouTube understood thank you that's all from thank you 28:40 28 minutes, 40 seconds thank you our next question is from the line of Kavish Parik from 361 Capital please go ahead Yeah. 28:48 28 minutes, 48 seconds Hi team. Uh thanks for the opportunity and congratulations on a great set of numbers for two quarters in a row. Uh my first question pertains to one of the notes to accounts you put. Uh you seem 28:57 28 minutes, 57 seconds to have written back provisions worth 99 million during the quarter. Uh could you share what do these provisions pertain to and where exactly is the impact reflected? 29:06 29 minutes, 6 seconds No this is something that happens every year. What we do is on a during the year we build up a position on the provision side and when the actual consumption 29:14 29 minutes, 14 seconds data comes out that's a time we are in a better position to decide how much royalty has to be paid or not paid. Uh remember I've shared this in the past 29:22 29 minutes, 22 seconds royalties um today when all the new content is being bought royalties are to be paid only on the Hindi film music. 29:31 29 minutes, 31 seconds All the south Indian content and Hindi non-film content is a royal is one-time payment content and there's no royalty overflow that happens but uh actual 29:40 29 minutes, 40 seconds consumption reports from the platforms come at a much later stage and that's why this is an actual process that happens every year. 29:47 29 minutes, 47 seconds So whenever the reports come we go back and clear it. 29:51 29 minutes, 51 seconds Uh so this does this in any way impact your revenue items or is this entirely on the royalty line item the cost side of it? 30:00 30 minutes So see what you need to do is um also the other part right now I forgot to mention is you congratulated us on a quarter three quarter four you need to 30:08 30 minutes, 8 seconds congratulate us from quarter 1 to quarter 4 because um it it very often happens is that some of the stuff right 30:16 30 minutes, 16 seconds now which we had taken a provision in quarter 1 actually got unwinded down in quarter 4. So please every time when 30:23 30 minutes, 23 seconds you're looking at um our numbers please Sarama's numbers always have to be 30:30 30 minutes, 30 seconds looked at on a rolling 12- month basis so that all these kind of factors start going out of the window even advances is 30:38 30 minutes, 38 seconds a pretty good decent another example I can throw in on a 12-month basis is um when you're looking on to look at a cash 30:45 30 minutes, 45 seconds position there are times right now when the advances come in and then finally that advances position is getting winded down. If we are going to be looking at 30:54 30 minutes, 54 seconds on a quarteronquarter basis, we you will see a serious amount of uh ups and downs there. So, it's best always evaluate our numbers right on a 12 month basis. 31:04 31 minutes, 4 seconds No, I understand that. What I'm trying to understand is uh is this one of the reasons for this provision right back? 31:10 31 minutes, 10 seconds Does this sit in your revenue or is it does does is that the reason for the uh 40 42% AIDA margin that you've reported? 31:19 31 minutes, 19 seconds uh is this in any way aiding your uh growth or is this only on the margin front? 31:25 31 minutes, 25 seconds It's all fitting part of your cost structures only. Nothing in the revenue. 31:30 31 minutes, 30 seconds It's as right now all these are all cost structures which are getting winded down. Understood. Understood. Pretty helpful. 31:36 31 minutes, 36 seconds Uh second on your disclosures on page 20 of your deck. Uh thanks for the clarification at the start of the call that music now includes uh licensing 31:44 31 minutes, 44 seconds retail as well as artists management. Uh here could you please explain the movement in margins? uh what explains the sustained up move in margins here uh 31:52 31 minutes, 52 seconds from about uh sub 60% few quarters ago to 60% and then uh the sharp jump to 68% today. Uh would you be able to attribute 32:01 32 minutes, 1 second this to any particular uh vertical here say licensing or artist or retail or is this broad-based across the three? So 32:08 32 minutes, 8 seconds the the uh individual uh if you see right now the segmental results uh you will realize they have also shared the individual results there at all times. 32:18 32 minutes, 18 seconds So you know exactly out of this how the margins have changed right now on the artist management part also when you're looking at my margins it's always better 32:25 32 minutes, 25 seconds once again please look at on a four month Q4 looks like that much better than a Q2 or a Q1 but the fact of life 32:33 32 minutes, 33 seconds is um it's about when the content got released in some quarter the cost of the content is being recognized but the 32:40 32 minutes, 40 seconds revenue is going to be flowing in in the next quarter onwards but overall um we had mentioned this that we were at a 32:47 32 minutes, 47 seconds stage age whereby we were uh really scaling up our content investments as far new music is concerned. As we people 32:55 32 minutes, 55 seconds go forward, as we look at FI28 to FI30, we believe that our our content investments should go up only at 33:04 33 minutes, 4 seconds closer to the rate of inflation because we will be in a good position of a 25 to 30% market share of the newer content. 33:12 33 minutes, 12 seconds As the new content investments start um going up in a linear fashion and not a step function fashion, you will see that 33:21 33 minutes, 21 seconds slow first EIDA and then PBT will start flowing the growth trajectory of the uh revenue growth. 33:30 33 minutes, 30 seconds Understood. Thanks for that Vikram. Uh last question from my side. Uh organic content spends this year stood at about 235 crores with the cash flow in the PPD 33:38 33 minutes, 38 seconds state about 186 crores. Uh I understand this difference here pertains to the marketing spend but your 9 month PPT mentioned about 228 crores in the PPD's 33:48 33 minutes, 48 seconds cash flow. Uh so that 228 seems to have come down to 186. Could you explain this movement? The specific one can I take offline with you right now because I'll 33:56 33 minutes, 56 seconds have to go through all the numbers when you're saying 9 months part. But um broadly speaking is um what we are sharing with you is the is the 34:04 34 minutes, 4 seconds investment when when we say the investment it is in terms of the music that got released during the financial year. The uh charge off that we are 34:14 34 minutes, 14 seconds taking right now will be connected not just to the music that got released this year but also the charge off of the music that got released over the last 34:21 34 minutes, 21 seconds few years because we write off our music uh charges uh on the content side over a period of 10 years while marketing gets written off in the same year. 34:31 34 minutes, 31 seconds Understood. Sure. Let's take this offline. Thank you. Thank you. 34:36 34 minutes, 36 seconds Thank you. Our next question comes from the line of Archel Jalan with Lotus Wealth Family Office. Please go ahead. 34:45 34 minutes, 45 seconds Hello, thank you for taking my question and congratulations on a good set of numbers. So sir, in the last call also 34:53 34 minutes, 53 seconds you had discussed that there is a potential of around 100 million paid subscribers in India and now also you said that 64% of free music users are 35:02 35 minutes, 2 seconds ready to switch to paid subscription. So say hypothetically if there are around 10 million paid subscribers in India 35:10 35 minutes, 10 seconds what would be our share in it uh in percentage terms um I can't go out there and share my my 35:17 35 minutes, 17 seconds market share in the market today but remember we are not getting the subscriber Spotify is getting the subscriber when a Spotify subscriber is 35:25 35 minutes, 25 seconds listening to music during the month we get paid bases our market share of what subscriber heard during the month are you with me? Yes sir. 35:35 35 minutes, 35 seconds I don't own the I don't own the subscriber. I partially own the consumption of that subscriber on that platform. 35:46 35 minutes, 46 seconds Yes. So can you give me some context like what would be our share in it as in our consumption share in it? Ma'am at 35:54 35 minutes, 54 seconds this juncture but the other data point I can go back and share with you that in terms of revenue which is coming from the music side we are the second largest company in the country after TS series. 36:04 36 minutes, 4 seconds Uh as far new music is concerned new music being defined as the music that were released over the last 12 months. 36:11 36 minutes, 11 seconds We have number one position across multiple languages in the country. Okay sir. Thank you. 36:20 36 minutes, 20 seconds Thank you. Our next question comes from the line of Anish Sharma with GM Financial. Please go ahead. 36:28 36 minutes, 28 seconds Yeah. Can you hear me? Yes. 36:31 36 minutes, 31 seconds Yeah. Uh so congratulations uh on the good side of numbers. Uh I have a few questions. So if you see a bit of history the revenue for 4Q uh that the 36:40 36 minutes, 40 seconds growth was around 40% at the time but after that the growth has remained subdued in terms of revenue. Uh but um it has improved over the last two 36:48 36 minutes, 48 seconds quarters. So my question is should we expect the current trends that we have in revenue to continue in the coming quarters or should we look at the 36:56 36 minutes, 56 seconds numbers like how should we look at the numbers ahead? 36:59 36 minutes, 59 seconds I'm assuming you're talking about the music vertical. Yeah. Yeah. Music vertical. Yeah. 37:03 37 minutes, 3 seconds So music vertical I had stated this uh in the past also that our our growth was getting subdued. Um in fact I'll say 37:11 37 minutes, 11 seconds over the last two years now uh primarily on account of the fact that lot of free streaming platforms had shut down and their revenue numbers were 37:20 37 minutes, 20 seconds sitting as part of the denominator while those things were not available in numerator at all. So you had four different platforms changing shape and 37:28 37 minutes, 28 seconds form some shutting down some going fully behind the pay wall. That effect is completely over which is the reason that 37:36 37 minutes, 36 seconds it gives us the confidence to give you a guidance of 20 to 23% growth coming as overall music vertical which is 37:44 37 minutes, 44 seconds licensing artist management I also including the carva business in this so we are fairly confident you will again 37:52 37 minutes, 52 seconds have a quarter here and a quarter there but on a full year basis we we will live up to these kind of numbers. 38:00 38 minutes Understood. That's great. Uh the second question is on the margins in the music segment. Uh so there's a significant uptick in the margins this quarter. So 38:08 38 minutes, 8 seconds just wanted to understand the reason for the same for this quarter. Yeah. 38:13 38 minutes, 13 seconds So again up please don't look at from the quarter perspective. Uh because like a very good example will be dur got 38:21 38 minutes, 21 seconds released in the month of December. So the entire marketing cost of Dinder is sitting in the in Q3 while the major but it got released in the end part of 38:29 38 minutes, 29 seconds December. lot of revenue upsideing in the on quarter four while the marketing got written in quarter three. So whenever you're looking at us please 38:37 38 minutes, 37 seconds look at us on a four month four quarter basis that gives some kind of a uniformity otherwise explain. 38:46 38 minutes, 46 seconds Yeah understood. Uh my last question is u in terms of the competition we see the non-digital revenue has increased uh sign significantly for the competition. 38:56 38 minutes, 56 seconds just wanted to know uh our split of digital and non-digital and uh trends over the past three four quarters. 39:03 39 minutes, 3 seconds Yes. So we don't disclose a digital non-digital but I am all I can go back and tell you and you can check this from non-m music labels. So don't ask me or 39:12 39 minutes, 12 seconds any of my competitors. Go to the normal industry uh people and check out the largest absolute number of non-digital 39:20 39 minutes, 20 seconds revenue in the country still comes to Zarama. 39:23 39 minutes, 23 seconds In fact on digital I'm number two. I'm not number one. On non-digital I'm number one. Understood. 39:31 39 minutes, 31 seconds Yeah. Thanks. Thanks. Thanks for the opportunity. Thanks. All the rest. 39:37 39 minutes, 37 seconds Thank you. Our next question comes from the line of Pratik Podar with Bundan AMC. Please go ahead. 39:46 39 minutes, 46 seconds Yeah. Hi. Am I audible? Yeah. 39:49 39 minutes, 49 seconds Yeah. Hi. Uh just could you confirm Vikram that uh you know we had this headwind of discontinued platforms in the base that is now over with. Is that a fair? 39:57 39 minutes, 57 seconds It's over with. There's no platform sitting out there now in a denominator. 40:01 40 minutes, 1 second Okay. Uh the second question just on events business while I understand and appreciate that this is a lumpy business from a revenue perspective uh this this 40:10 40 minutes, 10 seconds quote I saw loss in the event business uh that was something which I couldn't understand was it that uh yeah I add it as part of my opening 40:18 40 minutes, 18 seconds commentary uh we people launched our first uh festival IP this year typically festival IPS take anything 40:26 40 minutes, 26 seconds between 3 to four years to do a break even um that loss is all primary going out of because of unfort 40:41 40 minutes, 41 seconds we expect uh the festival to do a break even but every time you'd have any bit of a debate on a festival just look at a coachella numbers and then you start 40:50 40 minutes, 50 seconds realizing that festivals take five seven years to build but after that they become massive profit machines because 40:57 40 minutes, 57 seconds the biggest beauty of festival is you're not dependent on any one individual idual artist you can keep on changing artist because the festival is bigger 41:05 41 minutes, 5 seconds than the artist understood and uh this would be a quarterly phenomena right it's not for 41:11 41 minutes, 11 seconds the year this f I mean the the un40 festival which I heard 40 will be an annual phenomena this festival we may have we may end up 41:19 41 minutes, 19 seconds launching another one or two festivals if we believe there's a decent number of opportunity there but uh unfort is an annual thing we already announced unfort for February 27th. 41:30 41 minutes, 30 seconds Okay. Once in a year, right? Yeah. 41:33 41 minutes, 33 seconds Okay. And is there a budget of amount of losses you would want to keep aside or or let's say the investment? It's not losses. It's actually investments for 41:40 41 minutes, 40 seconds the future. Uh how much would you want to keep aside? Uh no, let's put it this way. You have seen the numbers now. Uh and this was year 41:49 41 minutes, 49 seconds one and year one takes the largest amount of losses because you're trying to establish. Uh now there are already expectations. We know brand revenues are 41:56 41 minutes, 56 seconds going to go up further. We know the number of tickets we'll be able to sell are are going to go up further. So the losses are going to come down. They're not going to go up on a on a festival by 42:05 42 minutes, 5 seconds festival basis. So typically if if one is running the festival business in a in a financially prudent fashion after year 42:14 42 minutes, 14 seconds one you need to take a call is that is it working uh or not? If not shut it down. If it's working year two you make it bigger but you get insured. Right now your losses come down. 42:26 42 minutes, 26 seconds Superb, superb. And last question, um sorry, uh uh uh just on the video segment, uh given that you have already called out that uh we would be going 42:35 42 minutes, 35 seconds through a production house and you will be uh winding down the video business, how should I think about capital employed and then overall margins, 42:42 42 minutes, 42 seconds right? I think you called out segmental margins and you did give a guidance, but uh the the revenue mix is right. uh 42:50 42 minutes, 50 seconds essentially uh a a lot of our revenue now comes from music plus artist plus retail and a bit of events and video sits with the production house. So how should I think about uh company level? 43:00 43 minutes You know the guidance that I've given right now are for the AIDA margins only of the music vertical and nothing else. 43:06 43 minutes, 6 seconds Um video part listen we are still going through this churn state. It will take us an year or something to stabilize the 43:13 43 minutes, 13 seconds bansali production uh numbers are going to get enter our books right now um in terms of what is the 43:21 43 minutes, 21 seconds exact name right now share or net profit of associate accounted for the using the equity method that's a line under which we are going to be putting the numbers 43:30 43 minutes, 30 seconds of uh up our partner company our own video vertical which time uh we are not greenlighting any major new projects whatever was there in the pipeline. 43:40 43 minutes, 40 seconds That's the only thing we want to complete in financial year 27. Our focus will continue on the shorter format and TV series and digital series uh 43:49 43 minutes, 49 seconds business. That business typically is you are saying the if run well uh should be 43:56 43 minutes, 56 seconds always be a profitable business. Uh and in the past we have always been profitable in that part of the business. 44:02 44 minutes, 2 seconds You're looking at margins that are anything between what 8 to 15 net margins of 8 to 15 8 to 18%. But very 44:10 44 minutes, 10 seconds little capital actually gets allocated to series business. You take advantages from uh most of the times you take advantage from the platforms of the TV channels and make uh content using that. 44:21 44 minutes, 21 seconds The only place where we end up taking some of our own bets which is numbers which running into lakhs not even kores is what we do on the short format side. 44:30 44 minutes, 30 seconds From the capital allocation perspective to answer your question the um we had earlier indicate to you guys that between our video vertical and the live 44:38 44 minutes, 38 seconds vertical the total capital of uh that will get allocated will be 18% of the total capital deployed that number is 44:46 44 minutes, 46 seconds going to go down dramatically will be in the mid single digits now fantastic fantastic thanks thanks thanks 44:54 44 minutes, 54 seconds this was helpful best wishes thank Thank you. Our next question comes from the line of Yash Baj with Lucky Investments. Please go ahead. 45:07 45 minutes, 7 seconds Good afternoon team and uh thanks for the opportunity and congratulations for a great set of numbers. Uh my first 45:13 45 minutes, 13 seconds question is on uh uh our plans of the,000 cr uh spend on new content 45:20 45 minutes, 20 seconds acquisition. So uh should we consider FI27 as uh I mean one of the I mean the 45:28 45 minutes, 28 seconds enders for this kind of investment if you take a FI25 FI26 FI 27 cumulative numbers. 45:35 45 minutes, 35 seconds Yep. You're absolutely right. Uh FI25 26 27 was thousand K odd and we will be in that ballpark in that space 45:44 45 minutes, 44 seconds only. uh our our intent is from 28 onwards increase it only in a linear fashion uh and no more step fun uh jumps 45:53 45 minutes, 53 seconds in new content investment. We are happy with the current 25 to 30% market share that we have of the new music coming out in the market. 46:03 46 minutes, 3 seconds Got it. Understood. Um and my second question is uh and uh thank you for actually kind of uh giving a detailed 46:12 46 minutes, 12 seconds explanation of uh how the music business and the iida margins and profit margins look like. Uh my only uh question here 46:21 46 minutes, 21 seconds is that what is the difference between music iida percentage and music net margin percentage? Is it that the music 46:28 46 minutes, 28 seconds iida percentage has has only marketing and production? If you see that specific slide in the presentation we have made 46:36 46 minutes, 36 seconds we've written about it. So music net margin is a bit the less content charge. 46:41 46 minutes, 41 seconds So the newer content people are so marketing and everything we are considering then do you the the content charge that we are taking for the newer 46:49 46 minutes, 49 seconds content has not been deducted when we calculate EITA you deduct that you get the net margins. 46:57 46 minutes, 57 seconds Okay understood understood. And uh just a question around this as well that uh 47:04 47 minutes, 4 seconds now that if like you mentioned that uh we have to look at the P&LN on a rolling four quarter basis. Uh if we take uh 47:12 47 minutes, 12 seconds financial year 25 uh music net margin percentage compared to uh financial year 26 music net margin percentage uh there 47:21 47 minutes, 21 seconds is an increase from a 42% to I think 47 48%. 47:27 47 minutes, 27 seconds Uh so what explains that 600 bips uh improvement uh if you can help us understand that you know 47:35 47 minutes, 35 seconds so all verticals um and the biggest vertical remains the licensing vertical uh what you are seeing is that initial 47:43 47 minutes, 43 seconds years content investment that we had done the the heavy lifting of the the um the charge that we are taking had taken 47:52 47 minutes, 52 seconds had happened in 25 so all the content that we people did in 25 and there are massive hits like IS32 which is sitting 47:59 47 minutes, 59 seconds there or an aman which is sitting out there in FI25 the bigger charge of that has been taken in 25 while the re revenue benefits of that will keep on 48:08 48 minutes, 8 seconds acrewing to us over the years 26 is a good example of it so last year when the numbers were going on the flatter side 48:17 48 minutes, 17 seconds uh I had stated this that the numbers in 25 were on the flatter side compared to 24 just jumped into new content 48:26 48 minutes, 26 seconds investment in a meaningful fashion. So though the revenues were going up, the charge off was also very very big and hence the overall profitability was 48:34 48 minutes, 34 seconds going on the flattish side. This year onwards while a content investment is there but the benefit of 24 and 25 is also coming to 26. 48:43 48 minutes, 43 seconds You with me? 48:44 48 minutes, 44 seconds Okay, understood. Yes. Yes. Got it. Got it. See the beauty of music business is that um once you have done the heavy 48:52 48 minutes, 52 seconds charge off in the beginning and if you do your music selection in a correct in a fashion and you keep on doing that 48:59 48 minutes, 59 seconds some amount of drip marketing throughout behind a a hit song the song has got a very long life and will keep on generating revenues for you. 49:10 49 minutes, 10 seconds No, very clear sirly and just one final question is uh just on the subscription part of the business uh if you can help 49:18 49 minutes, 18 seconds us understand uh what proportion of our business would be subscription today uh or if you're not comfortable sharing that uh if you can help us understand 49:27 49 minutes, 27 seconds the growth rate between suppose subscription versus free music. 49:30 49 minutes, 30 seconds No, so I sama directly has no subscription. Um Spotify has subscription YouTube. I mean paid paid I mean paid. 49:39 49 minutes, 39 seconds No. So s let me not go back and share that data. It's just too competitor sensitive data. 49:45 49 minutes, 45 seconds Um but the fact of life is that uh the monies that we are making from the free side of audio streaming platforms are flattish and I'm acknowledging it. 49:57 49 minutes, 57 seconds Understood. 49:58 49 minutes, 58 seconds Growth that you are seeing in the numbers that is coming in and we the numbers are there in front of you is all coming to the the uh paid subscription side. 50:09 50 minutes, 9 seconds Got it. 50:10 50 minutes, 10 seconds And remember it's just right at the beginning. We have the massive play left in terms of new subscribers coming in, 50:19 50 minutes, 19 seconds aru expansion and various other monetization mechanisms coming in. We have a our um unfortunate part is that 50:29 50 minutes, 29 seconds the the even the Latin American countries are far ahead of us in terms of penetration. But the positive part is there's a massive road in front of us. 50:39 50 minutes, 39 seconds Understood. Thank you and all the best. 50:44 50 minutes, 44 seconds Thank you. Our next question is from the line of Govinda Rajan Chalapa from CSIM. Please go ahead. 50:52 50 minutes, 52 seconds Yeah. Hi. Hi. Thanks for taking my question. I had three of them. Uh first just a clarification. uh in your presentation you mentioned that you 51:00 51 minutes expect uh music net margins to improve by 300 to 500 basis points in 3 to 5 years uh so in essence uh you're 51:08 51 minutes, 8 seconds expecting the EBIT margins to move from 46 odd to a sustainable 50%. Is that understanding correct? 51:15 51 minutes, 15 seconds Yeah. So in fact if I'm looking at the EIT margins uh currently also music they're hovering on the are are hovering 51:22 51 minutes, 22 seconds around 60% odd. Uh if you look at my slide um not the net margins what what you 51:30 51 minutes, 30 seconds margin for the business if you're talking about the net percentages which are somewhere hovering between 46 to 50%. Yes over next 3 to 5 51:38 51 minutes, 38 seconds years you should have um 300 to 500 bits increase coming on our music business everything else remaining as it is. 51:49 51 minutes, 49 seconds Okay. and and and this would be a linear increase or you think this will be back ended? 51:54 51 minutes, 54 seconds No, no. So it it may take us another year or two for the buildup to start happening. But what we are realizing is that as our digital footprint is 52:02 52 minutes, 2 seconds becoming stronger and bigger. uh a big advantage is coming in that the incremental marketing cost that I have 52:10 52 minutes, 10 seconds to incur to promote a song um a a decent chunk of that I'm able to go out there and do it because of the pocket digital 52:19 52 minutes, 19 seconds footprint and that is the kind of saving we end up acrewing in the system that process has started you will see it in a 52:26 52 minutes, 26 seconds in a linear it will not be a single step jump that will happen but it will be linear but linear where the the angle is a little lower in the beginning can become steeper as we go ahead. 52:36 52 minutes, 36 seconds Okay, understood. My second question is on short format videos. Um, right now I think you get paid a fixed fee per anom 52:44 52 minutes, 44 seconds by each of the platforms. Uh, is this an annual contract? Uh, how or you know is it renewed annually and what is the 52:51 52 minutes, 51 seconds basis for renewal? Uh, and and you know you've mentioned that there could be um, you know, conversations around sharing 52:58 52 minutes, 58 seconds ad spins on short format. Uh, if you could give an update on that. Yeah. So actually nothing has changed over the last one year. This is one of the areas 53:07 53 minutes, 7 seconds which um bothers us. Uh short format content in all our deals have are one-year deals. Uh and the renewal 53:16 53 minutes, 16 seconds typically happens bases the usage of our content during the year. 53:22 53 minutes, 22 seconds So yes, we are able to get some kind of a step jump, but it is not um as ideal 53:29 53 minutes, 29 seconds as an advertisingdriven model is because an advertising driven model uh you straight away see benefit acrewing right 53:36 53 minutes, 36 seconds now to your bottom line. What happens with YouTube free service um short format content all the the the licensing 53:44 53 minutes, 44 seconds to short format services is still a fixed fee deal renewed on an annual basis. 53:50 53 minutes, 50 seconds Okay. My last question is on this uh line item unallocable expenditure. Uh it's moved from 7 odd crores in FI23 to 74 crores in FI26. 54:02 54 minutes, 2 seconds Uh you know what are the components of this? Has there been any reclassification and how do we think about growth in this expenditure over the next few years? 54:12 54 minutes, 12 seconds So I think my thing is unfortunately I don't have a CFO at this moment. Can I ensure right now somebody 54:20 54 minutes, 20 seconds calls you up and takes you through these numbers in detail because you're putting 3 to 26 moment now. Yeah, I mean every year it is doubled. 54:27 54 minutes, 27 seconds Uh no, so we will go back and sit with you. 54:30 54 minutes, 30 seconds See the the core part I can go back and say that the the core management team is all sitting in there. So there is some amount of manpower cost also that is 54:38 54 minutes, 38 seconds sitting in. Kulp do you have an answer to this if you can help? 54:44 54 minutes, 44 seconds Sir from the moment. Can you repeat your query? We just lost in between. 54:51 54 minutes, 51 seconds Yeah. The the unalocable expenditure uh which comes below the segmental results uh it moved from 7 crores in FI23 to 16 and 24 to 36 and 25 and 74 in FI26. 55:04 55 minutes, 4 seconds Right? There's a 10 10x increase in that expenditure. 55:09 55 minutes, 9 seconds Um so uh if we have to look u if we see comparison between 25 and 26 so in by 26 it was 37 crores and it is now 73 55:18 55 minutes, 18 seconds crores. The major because this unlookable expenses net of other income which is the income which we do in 55:24 55 minutes, 24 seconds investment in mutual funds and FDS. Now when we are investing in the content we are realizing that those investments and 55:33 55 minutes, 33 seconds that is where the interest income has dropped and as a result of same you are seeing the delta in this expense. 55:42 55 minutes, 42 seconds This is one of the major reason of increase in the expense which you see here. Okay. I I Okay, maybe I can. 55:50 55 minutes, 50 seconds So as the QIP funds are getting utilized um either in terms of purchases or pocket earlier pocket aces then happen 55:57 55 minutes, 57 seconds bansali and our newer music content that we are doing the interest income on that capital is coming down uh which means the netting off effect is coming down. 56:06 56 minutes, 6 seconds So in reality the unallocable expenses are not going up to to in any alarming fashion. is just 56:15 56 minutes, 15 seconds the netting off portion um which is giving this illusion as if they're going up. 56:21 56 minutes, 21 seconds Okay. I mean I I think I need to take this offline because between FI23 and FI26 other income has dropped only 10 crores whereas this is almost 20 crores. Yeah. 56:33 56 minutes, 33 seconds Yeah. Okay. I'll take this offline. Thank you. Sure. 56:37 56 minutes, 37 seconds Thank you. Our next question is from the line of Sonat Jen from Kamayaka Wealth Management. Please go ahead. 56:47 56 minutes, 47 seconds Yeah. Hi, am I audible? Yes, please. Yeah. So, I had a couple of questions. 56:53 56 minutes, 53 seconds So, I wanted to know about the revenue from social media platforms. So, suppose an influencer posts a re using our music. So, what's the deal structure and how much do we make from that one? 57:04 57 minutes, 4 seconds Really? What's the revenue model there? 57:07 57 minutes, 7 seconds So I I had answered this I think um just I think last question only. All our social media platform deals are flat fee 57:16 57 minutes, 16 seconds deals. That means we get paid a flat fee by this platform for utilization of our 57:23 57 minutes, 23 seconds music across a real short post during the year. So uh you're not getting paid right now on a per real basis. But this 57:32 57 minutes, 32 seconds license is uh is restricted only for individual consumption and usage. A brand cannot take advantage of this and 57:41 57 minutes, 41 seconds post any real of theirs. Brands have to take uh negotiate a license from us directly. 57:50 57 minutes, 50 seconds Okay. Okay. Understood. Understood. Uh okay. Uh my other question was relating related to the investment part. Suppose 57:56 57 minutes, 56 seconds we do 350 crores in FI27 to reach our stated target of 1,000 crores. But uh from FI28, what investment budget are we planning? 58:07 58 minutes, 7 seconds So we are looking at a linear increase uh as we people go forward from FI after post FI27 58:15 58 minutes, 15 seconds um because principally we are comfortable the 25 to 30% market share that we will get with the 300 to 350 K 58:24 58 minutes, 24 seconds uh content investment. So as you go forward you can look at anything in terms of very high singledigit to a very 58:31 58 minutes, 31 seconds low doubledigit percentage increase on nearear basis. 58:37 58 minutes, 37 seconds Okay. So aa so considering the base of 350 crores or fi27 58:44 58 minutes, 44 seconds so incremental to that you are saying right? So suppose it's 400 crores kind of number. 58:53 58 minutes, 53 seconds Yeah. So see uh for me it's a at this juncture of 12 months away it's more of a philosophical question and our 59:01 59 minutes, 1 second philosophy is clear that we started from zero investment in this company on new music. We have ramped it up in a in a 59:09 59 minutes, 9 seconds very rapid fashion over the last three years to give ourselves clear leadership position in multiple languages to get 59:16 59 minutes, 16 seconds ourselves a 25 to 30% beach market share on a pan India basis in terms of new music. We are comfortable. We want to 59:25 59 minutes, 25 seconds position here. We don't want to go back and do another massive step function jump here. 59:32 59 minutes, 32 seconds Okay. Okay. Thank you. That's it from my side. Thank you. 59:38 59 minutes, 38 seconds Thank you. Our next question is from the line of Rohan Nagpal with Helios Capital Management. Please go ahead. 59:46 59 minutes, 46 seconds Hey, thanks for taking my question. Am I audible? Yes, please. 59:50 59 minutes, 50 seconds Yeah. Uh yeah. Uh numbers. Um I just want to understand the seasonality that we see in uh the music revenues that 59:59 59 minutes, 59 seconds we're booking even after taking out artist management. There seems to be a through the year. Um so what is the 1:00:06 1 hour, 6 seconds underlying of that increasing uh streaming or licensing revenue Q1 to Q4? 1:00:15 1 hour, 15 seconds Sorry I'm so sorry you will have to repeat your question. Could not hear you. 1:00:28 1 hour, 28 seconds Hello. 1:00:33 1 hour, 33 seconds Hello Rohan. Please go ahead with your question once again. Your audio wasn't clear earlier. 1:00:39 1 hour, 39 seconds Okay. Um there's a clear sort of increasing trend uh between Q1 and Q4 on 1:00:46 1 hour, 46 seconds the music revenue that we generate X of ARA and XL artist management. Um so increase in licensing revenue. I want to 1:00:54 1 hour, 54 seconds understand what is the driver of this uh increasing revenue uh in licensing between Q1 and Q4 uh through the years. 1:01:04 1 hour, 1 minute, 4 seconds Now so between Q1 Q4 actually the biggest factor is when which a big album is getting released. A lot of this uh 1:01:11 1 hour, 1 minute, 11 seconds revenue that you are seeing right now is also governed by the new music releases. 1:01:15 1 hour, 1 minute, 15 seconds Typically in our country Q1 being the IPL time you will have less new big movies getting released during the year. 1:01:24 1 hour, 1 minute, 24 seconds Uh Q3 being the Diwali time ends up seeing a massive release in terms of new music and then that December January 1:01:31 1 hour, 1 minute, 31 seconds time frame is very very big. uh one being Christmas, second uh being around ONUM. Uh what why am I saying Oman? 1:01:38 1 hour, 1 minute, 38 seconds Around uh 14th of January um the 14th January becomes a very big release date in South India and then 1:01:46 1 hour, 1 minute, 46 seconds 14th February becomes a very big release date across the country as far romantic movies are concerned. So you typically 1:01:54 1 hour, 1 minute, 54 seconds in our country have bigger releases coming in Q3 Q4. The only date that stands out is uh around onala date which 1:02:03 1 hour, 2 minutes, 3 seconds is from 15th August to end of the August where you do have big mallayalam and sometimes patriotic uh patriotismdriven 1:02:11 1 hour, 2 minutes, 11 seconds Hindi films also coming out. So that's the level of seasonality you may have seen um sometime that Q2 may become 1:02:18 1 hour, 2 minutes, 18 seconds bigger than Q3 also and we have seen that in the past happening with us. Um but Q1 typically is the most muted one because there are very few releases. 1:02:29 1 hour, 2 minutes, 29 seconds The other factor which need need to keep in mind for Q4 is that uh there are some of the uh commercial relationships where 1:02:38 1 hour, 2 minutes, 38 seconds the money hits us only at the end of the year. This typically happens with various relationships we have with various societies. they are able to go 1:02:46 1 hour, 2 minutes, 46 seconds out there and finish the reconciliation for the entire year and release the monies only typically they do two or 1:02:54 1 hour, 2 minutes, 54 seconds three transes may payment but if they're getting delayed primary all the payments end up hitting you on Q4 that's why like 1:03:01 1 hour, 3 minutes, 1 second a stuck record I will be please look at us on a rolling 12 month basis understood that's really helpful thank 1:03:08 1 hour, 3 minutes, 8 seconds you um and then the other question I had was uh there's a sharp decrease in the advertisement and sales promotion 1:03:15 1 hour, 3 minutes, 15 seconds expensive here. Is that on account of uh events not being events not being there this year or not in the same not with 1:03:23 1 hour, 3 minutes, 23 seconds the same intensity or is there some other factor driving that? 1:03:28 1 hour, 3 minutes, 28 seconds Ali two big factors start coming in here. One you have nailed it. Uh last year this also included all the advertising that we people had done for 1:03:36 1 hour, 3 minutes, 36 seconds the Dji Dossan show. Also uh we have scaled down the video vertical this year. So very few new films were 1:03:43 1 hour, 3 minutes, 43 seconds released by us this year while 25 also had film advertising expenses hitting in. So this is not just music there isn't that much amount of change. 1:03:52 1 hour, 3 minutes, 52 seconds There is some amount of reduction because if you see the content investment that we have done during the year which is a combination of content plus marketing or new music has come down compared to the previous year. 1:04:03 1 hour, 4 minutes, 3 seconds These movies like Paradise and Love and War had they got released as earlier planned in February March time frame these expenses would have been a little higher. 1:04:13 1 hour, 4 minutes, 13 seconds Understood. And the last question uh there's a um there's a sharp decrease in the content charging cost this quarter. 1:04:20 1 hour, 4 minutes, 20 seconds Is that because there was the the run marketing spend that was incurred in Q3 which is not there in Q4 or is 1:04:30 1 hour, 4 minutes, 30 seconds quarter on quarter becomes very tricky when it goes up we don't take but when the numbers move in our favor also we don't take the credit on a 1:04:38 1 hour, 4 minutes, 38 seconds quarteronquarter basis evaluate us on an on a 12-month basis becomes that much easier 1:04:45 1 hour, 4 minutes, 45 seconds thank you movie release 27th or December Now it it will get the the the marketing 1:04:54 1 hour, 4 minutes, 54 seconds spread depend frontloaded is it backloaded and everything changes. So 1:05:01 1 hour, 5 minutes, 1 second and and if the movie is getting released in December was the last song also released in December. If the last song was also released we will consider the 1:05:09 1 hour, 5 minutes, 9 seconds entire content charge otherwise the content charge moves to January. That's why it's always better to evaluate this thing on a 12 month basis. 1:05:16 1 hour, 5 minutes, 16 seconds Fair enough. Understood. Thank you very much. Thank you. 1:05:21 1 hour, 5 minutes, 21 seconds Thank you. Our next question comes from the line of Manish Gupta from Equinox Investment Advisors. Please go ahead. 1:05:29 1 hour, 5 minutes, 29 seconds Uh thank you for taking my question. Uh so is the uh uh IPRS movement upset to 1:05:37 1 hour, 5 minutes, 37 seconds the revenues especially after Kolkata High Court ruling in that vodafon case? It does not have any implication on us. 1:05:44 1 hour, 5 minutes, 44 seconds I'll just leave it there. Okay. Okay. 1:05:48 1 hour, 5 minutes, 48 seconds And uh secondly sir I understand that market price of the stock is neither your focus and it should not be and nor 1:05:56 1 hour, 5 minutes, 56 seconds under your control. However markets are said to be voting machines in the short term and ving machines in the long term. 1:06:04 1 hour, 6 minutes, 4 seconds Paragama has been on a downtrend for several quarters now not withstanding today which we are grateful for. Is there anything fundamentally altered or 1:06:12 1 hour, 6 minutes, 12 seconds disrupted in the music industry or Sarama's business which is causing this downtrend in your opinion? 1:06:20 1 hour, 6 minutes, 20 seconds So I'll I'll not comment as you rightly said I am not going to be commenting on 1:06:26 1 hour, 6 minutes, 26 seconds um on the the the pricing the P part of it. I am and the management team is fully accountable on the EPS part of it. 1:06:35 1 hour, 6 minutes, 35 seconds All I can go back and say is Sarama three years back when we decided to get into new music, we had made a statement at that particular time that uh we are preparing this company for 2050. 1:06:46 1 hour, 6 minutes, 46 seconds This company had made a mistake in year 2000 by deciding not to invest in new music content. It's easy for us today, 1:06:55 1 hour, 6 minutes, 55 seconds right? If we sit and say that the only thing we want to drive is profitability, all that board has to go back and decide 1:07:03 1 hour, 7 minutes, 3 seconds is that from now onwards we will not invest in new content. If we do that and and it is a very conscious part that we 1:07:10 1 hour, 7 minutes, 10 seconds want to drive only profitability from music today growth and a long-term sustainability is not something that we 1:07:18 1 hour, 7 minutes, 18 seconds want to drive. This company can become a 75% margin in business tomorrow because there is in music business that's your 1:07:25 1 hour, 7 minutes, 25 seconds beauty. There's very limited cost once you have already paid for the content that you have taken and the music keeps on making money for you in a long-term basis. We took a conscious call and that 1:07:34 1 hour, 7 minutes, 34 seconds time also we had prepared the market saying the going has been great but the going has been great only on the back of the catalog. We don't want a situation 1:07:43 1 hour, 7 minutes, 43 seconds 20 years down the line that the kids of that time asked that who was Kishor Kumar or who was Adi Burman. We because 1:07:50 1 hour, 7 minutes, 50 seconds the Kishor Kumar of what Kishor Kumar is for us today 20 years of Arijit will have. So we are just 1:07:58 1 hour, 7 minutes, 58 seconds investing in newer content in an aggressive in a passion and when you invest so heavily in newer content especially in a step function jump in 1:08:06 1 hour, 8 minutes, 6 seconds the short run the increase in revenue was get is getting will get mashed completely by the charge off on content 1:08:13 1 hour, 8 minutes, 13 seconds that you are taking. We are slowly getting out of that cycle now. So if if you are congratulating us for the 1:08:19 1 hour, 8 minutes, 19 seconds quarter 4 results, believe you me right now the real game of this started 3 years ago. We now slowly getting into a position where the benefits will start acrewing to us. 1:08:30 1 hour, 8 minutes, 30 seconds Fantastic. Fantastic. And my last question is that uh the new generation is now watching RES all the time. 1:08:37 1 hour, 8 minutes, 37 seconds So does it or can it affect music revenues in coming? So um 1:08:43 1 hour, 8 minutes, 43 seconds Sarama has owns 92.91% of pocket aces which owns the biggest uh Gen Z channel. 1:08:53 1 hour, 8 minutes, 53 seconds So Sarajama also owns in through pocket aces filter copy which is the ultimate real place for people under the age of 1:09:01 1 hour, 9 minutes, 1 second 30. So I have a play there. Second, anybody else who is using a reel at any particular time, you'll realize 1:09:08 1 hour, 9 minutes, 8 seconds majority of the reels, I don't know the percentage, but bulk of the reels you will see on any of the social media will have music attached to it. So there is a 1:09:17 1 hour, 9 minutes, 17 seconds monetization that ends up happening right now on the music side too. So for us uh presence on social media uh 1:09:25 1 hour, 9 minutes, 25 seconds whether it's presence of social media, presence on a TV channel, presence on a digital series or a film anytime a video is seen there is a high probability a 1:09:34 1 hour, 9 minutes, 34 seconds music get attached to it which becomes another touch point for us to monetize. 1:09:40 1 hour, 9 minutes, 40 seconds So we look at it this pansioner re lot of positivity. Okay. Okay. Thank you very much sir. Thank you. 1:09:49 1 hour, 9 minutes, 49 seconds Thank you. Our next question is from the line of Risham Jen from VVD Asset Managers. Please go ahead. 1:09:57 1 hour, 9 minutes, 57 seconds Yeah. Hi. Uh so I just one question uh if you can share the revenue uh from the content uh which has been 1:10:06 1 hour, 10 minutes, 6 seconds bought over the last 5 years if that number can be shared because uh there is hardly any way you have this payback 1:10:14 1 hour, 10 minutes, 14 seconds period in mind of five years but for us it's very difficult to assess u how profitable it is. So if you can share at 1:10:22 1 hour, 10 minutes, 22 seconds least the last five year cumulative revenue uh in busier year after 26 of the content board that will at least be helpful for us to evaluate. 1:10:31 1 hour, 10 minutes, 31 seconds So I'll tell you how you can arrive at this if you check out my last corporate presentation. Uh there we have shared 1:10:37 1 hour, 10 minutes, 37 seconds data with you that how much revenue is what percentage of the total revenue in the on the music side is coming actually 1:10:46 1 hour, 10 minutes, 46 seconds from the music release after 2020. that data is as of FI25 uh does not include the 26 data and we 1:10:53 1 hour, 10 minutes, 53 seconds will be releasing that part also shortly but till 25 you will get that information if I remember my numbers correctly um 1:11:03 1 hour, 11 minutes, 3 seconds right 40% of the total revenue that we people had um is music is released 1:11:11 1 hour, 11 minutes, 11 seconds between 21 to 24 this is as of May 25 data Um 1:11:22 1 hour, 11 minutes, 22 seconds okay okay okay so if I then uh look at the overall revenue uh because now you have artist 1:11:31 1 hour, 11 minutes, 31 seconds uh management and other things also obviously music revenue also is separate but then the cagger growth of the old 1:11:38 1 hour, 11 minutes, 38 seconds music uh from as you mentioned in your uh comments also that it is inflationdriven 1:11:46 1 hour, 11 minutes, 46 seconds uh how should then one look at that part because that seems to be growing much slower than uh maybe some of the other competitors. 1:11:55 1 hour, 11 minutes, 55 seconds No, so so I disagree with that part. Um I am not going to talk about competitors please. I'm talking about our absolute 1:12:04 1 hour, 12 minutes, 4 seconds numbers here. Um the catalog growth that we people have seen uh for us on an 1:12:10 1 hour, 12 minutes, 10 seconds appletoapple basis. Um what does mean is that I'm going to be comparing my catalog growth on Spotify in over the 1:12:18 1 hour, 12 minutes, 18 seconds last 3 years or a sav over the last 3 years or a YouTube over the last 3 years. We are growing at this juncture 1:12:24 1 hour, 12 minutes, 24 seconds bit higher than inflation also. Um and we are fairly confident this growth 1:12:32 1 hour, 12 minutes, 32 seconds is going to get further accelerated as we go ahead. Uh let me take this opportunity to also share with you that 1:12:39 1 hour, 12 minutes, 39 seconds we are now creating a newer experiment within the company whereby we are saying that how can we use the capability of 1:12:46 1 hour, 12 minutes, 46 seconds the generative AI to create enhanced content and properties around older uh 1:12:54 1 hour, 12 minutes, 54 seconds music that we people have which may be generative AIdriven music videos for a Hmon Kumar song or an SD Bmana song or 1:13:02 1 hour, 13 minutes, 2 seconds it may be podcast which will be connected to the older songs that we people have which gives us not only an opportunity to promote the older music 1:13:10 1 hour, 13 minutes, 10 seconds but also find a fresher way to monetize the older music. The problem is on the on when you are going to be looking at 1:13:18 1 hour, 13 minutes, 18 seconds my numbers do keep in mind um the moment you do absolute catalog to absolute catalog there's a decline because music at a decline because we had platforms 1:13:27 1 hour, 13 minutes, 27 seconds like reso shutting down we had platform like wink shutting down we had Ghana going from a free to pay completely we had hungama shutting down so overall 1:13:36 1 hour, 13 minutes, 36 seconds numbers fell down in a dramatic enough fashion which is the reason why you see music revenue growth over except the 1:13:43 1 hour, 13 minutes, 43 seconds last two quarters of going on a more muted basis but on an apple to apple comparison basis right now the catalog is growing. 1:13:52 1 hour, 13 minutes, 52 seconds Okay, understood. Uh perfect. All the best. Uh and really admirable the way you uh communicate and uh uh show the 1:14:01 1 hour, 14 minutes, 1 second passion about your business. Thanks for the time. 1:14:06 1 hour, 14 minutes, 6 seconds Thank you. Our next question is from the line of Separal from Nari Investment. Please go ahead. Yeah. Uh thank you for the opportunity. 1:14:15 1 hour, 14 minutes, 15 seconds This is I just don't uh my question is this our performance regarding the last 1:14:22 1 hour, 14 minutes, 22 seconds three years. So our uh our competitor company also have a market cap of 8,000 1:14:29 1 hour, 14 minutes, 29 seconds approxim 37. There is ROC is um our company uh RO 1:14:39 1 hour, 14 minutes, 39 seconds our competitor company ROC is 122 while our our ROC is 17%. 1:14:46 1 hour, 14 minutes, 46 seconds They said um 1990 music which music they top line and bottom line 1:14:53 1 hour, 14 minutes, 53 seconds while we have a very we have more good library of music song but we can't perform 1:15:00 1 hour, 15 minutes uh will you tell where we are weak they have uh they have 59 cr content cost 1:15:07 1 hour, 15 minutes, 7 seconds last year and we have appro 235 cr they write up content cost 100% on release itself 1:15:15 1 hour, 15 minutes, 15 seconds They also are good. They are also a good property to monetize in Dumang area. 1:15:20 1 hour, 15 minutes, 20 seconds It's still we are far away from them. So just comment. 1:15:28 1 hour, 15 minutes, 28 seconds So I can talk only about myself. So if you have any question directly connected to Saram, I'm happy to discuss. Uh I'll 1:15:34 1 hour, 15 minutes, 34 seconds not like to uh pass any comments uh on my competitor on my competitor's business. 1:15:42 1 hour, 15 minutes, 42 seconds So this is Hello. Hello. 1:15:49 1 hour, 15 minutes, 49 seconds Uh if you are go ahead hello 1:15:57 1 hour, 15 minutes, 57 seconds ahead please. Yeah, there yeah I just I just want to know the uh where we are 1:16:05 1 hour, 16 minutes, 5 seconds just just so my question my question is uh regarding the performance of our company 1:16:14 1 hour, 16 minutes, 14 seconds there uh uh why they are not performing 1:16:21 1 hour, 16 minutes, 21 seconds sir I don't know how you calling it not performing the Indian music industry uh growth numbers have been published 1:16:28 1 hour, 16 minutes, 28 seconds This is a neutral study. None of us are involved in that part. ENY has gone out there and done it as part of Fiki report. IMI which is the music 1:16:37 1 hour, 16 minutes, 37 seconds industry's apex body has gone back and published this. Both of them are saying music industry during the year grew up between 7 to 8. Somebody saying six 1:16:45 1 hour, 16 minutes, 45 seconds other is saying 8%. That's the industry growth rate. in that industry growth rate. The only reason Sharia Gama has been able to grow faster because we 1:16:54 1 hour, 16 minutes, 54 seconds aggressively bought newer content and the fact a newer content has worked can be checked on YouTube can be checked on 1:17:02 1 hour, 17 minutes, 2 seconds Instagram can be checked on Spotify. You can go to various charts of Spotify and see that when I am saying my content has worked there are third party which is 1:17:10 1 hour, 17 minutes, 10 seconds saying that the content has gone out there and worked. So I I know there's far better work we people can do and we will try our very best to 1:17:19 1 hour, 17 minutes, 19 seconds improve our numbers even further but saying that our our um revenue is not growing or our strategy is not working 1:17:27 1 hour, 17 minutes, 27 seconds will be a little unfair sir. Um I don't know about competition I know absolute numbers that are there in the market. uh and I also promise you and commitment to 1:17:35 1 hour, 17 minutes, 35 seconds you right now that the numbers in terms of profitability as we go forward with the strategic approach we took 3 years back as we continue on that path are going to become even better. 1:17:46 1 hour, 17 minutes, 46 seconds Just just one more s the uh the company has been an aggressive content investment cycle 1,000 cr across 1:17:54 1 hour, 17 minutes, 54 seconds financial year 25 to 27 which is very exciting. How from the shareholder perspective the roe has been around 13%. 1:18:01 1 hour, 18 minutes, 1 second over the last three years this stock has some correction. So could you management help us in the end? 1:18:08 1 hour, 18 minutes, 8 seconds You will um the the uh when we people raised the QIP it was with a very specific uh thing in mind that we want 1:18:16 1 hour, 18 minutes, 16 seconds to go out there and invest in content that will get us ready for the for future. The the first strategic call we take right now that the music has to be 1:18:24 1 hour, 18 minutes, 24 seconds invested in. You are already seeing the results. we are growing far faster than the publicly acknowledged and published 1:18:32 1 hour, 18 minutes, 32 seconds growth rate of the industry. Second, we took a call to go back and buy pocket aces. The the fact that in last two 1:18:39 1 hour, 18 minutes, 39 seconds years we have been able to go out there and turn around pocket aces and and make it a huge marketing machine and it's 1:18:46 1 hour, 18 minutes, 46 seconds growing at a very fast pace. Third, we have taken a conscious call to go out there and invest in banchali productions. This will ensure that in 1:18:53 1 hour, 18 minutes, 53 seconds the days to come the most valuable film albums that will be coming out in the market will automatically go to Sarama 1:19:01 1 hour, 19 minutes, 1 second at a pre-aggreed and negotiated price so that I have some kind of a control on the cost escalation that may happen in a 1:19:09 1 hour, 19 minutes, 9 seconds very very competitive market. So the results of all these will start coming out. So the equity that was raised has 1:19:15 1 hour, 19 minutes, 15 seconds been invested in these areas if and we are on the path finally to go back and increase the ro are we happy with a 3 1:19:24 1 hour, 19 minutes, 24 seconds and a half% ro we are not sir but we know this that journey has to be traveled through and we are traveling on 1:19:30 1 hour, 19 minutes, 30 seconds that journey and hopefully we are taking care of the guardrails uh we may make here and there but the intent is very 1:19:38 1 hour, 19 minutes, 38 seconds very clear that uh in the end the RO has to go up because eventually share shareholder value uh improvement is the final goal for everybody. 1:19:49 1 hour, 19 minutes, 49 seconds Thank you. 1:19:52 1 hour, 19 minutes, 52 seconds Thank you. Our next question comes from the line of Akshai Jugani with Exponent Tribe. Please go ahead. 1:20:02 1 hour, 20 minutes, 2 seconds Hi Vam, thank you for the opportunity and congratulations on a good set of numbers. Um am I audible? Yes, please. 1:20:09 1 hour, 20 minutes, 9 seconds Yeah, perfect. Thank you. Uh we have a couple of uh couple of questions. Um like you mentioned that the the headwind 1:20:17 1 hour, 20 minutes, 17 seconds on uh the the platforms shutting down or switching off uh free is sort of behind 1:20:23 1 hour, 20 minutes, 23 seconds you. So over the next um one to two years um as platforms sort of start u 1:20:32 1 hour, 20 minutes, 32 seconds pushing and they have already started pushing uh premium. Do you expect the growth rates to now sort of 1:20:39 1 hour, 20 minutes, 39 seconds kind of mirror their growth rates uh or or or do you think there are more uh 1:20:47 1 hour, 20 minutes, 47 seconds more changes within the industry structure that kind of are expected? No. So one part is what I'm expecting. 1:20:55 1 hour, 20 minutes, 55 seconds Second is the guidance I'm happy to give at this juncture knowing the current situation. So in the current scenario uh 1:21:04 1 hour, 21 minutes, 4 seconds looking at the subscription growth rate that is happening for the music vertical of pass which says now added retail also 1:21:12 1 hour, 21 minutes, 12 seconds to it uh we are projecting a 20 to 23% CAGR over next 3 to 5 years but can this change dramatically into a 1:21:20 1 hour, 21 minutes, 20 seconds hockey stick effect it can the if if anything is to go by look at the subscription data in other parts of the 1:21:27 1 hour, 21 minutes, 27 seconds world even a American country is sitting out there in and 15%. Which will be five times of what we people are today and those numbers are not very difficult to 1:21:36 1 hour, 21 minutes, 36 seconds achieve. Um all that one or two of the leading platforms has to go back and do is that they just shut the the tap of 1:21:44 1 hour, 21 minutes, 44 seconds the free content. They are all making the right noises. The the subscription is going to take off. What I can promise 1:21:52 1 hour, 21 minutes, 52 seconds you is the day subscription generally take off. It's we are not talking of double-digit growth there. You will see numbers going out and literally doubling 1:22:00 1 hour, 22 minutes if needed be on a year-on-year basis for the first few years. It will be hockey stick effect. But till the time it doesn't happen, I can't go back and give you a guidance on that. 1:22:11 1 hour, 22 minutes, 11 seconds We believe in that very strongly. We believe subscription story has played out in every part of the world. In India, it's playing out on the video 1:22:20 1 hour, 22 minutes, 20 seconds side now. Uh the T-watch story uh is playing out on the gaming side in India now. So we understand that the younger 1:22:28 1 hour, 22 minutes, 28 seconds generation is comfortable with the idea of paying for digital content. Um I am 50 plus my age group has a serious problem paying for anything on digital. 1:22:39 1 hour, 22 minutes, 39 seconds Even I start thinking free but the younger people don't think that way. They have not grown in the world of digital always being free and they are 1:22:47 1 hour, 22 minutes, 47 seconds comfortable paying for better experiences and not necessarily trying to find an easy way out. But the fact of life is somebody has to shut the free 1:22:56 1 hour, 22 minutes, 56 seconds supply and make pay on an affordable basis. India is not a $5 market. Any company that will try that is going to burn themselves here. India is a dollar 1:23:05 1 hour, 23 minutes, 5 seconds dollar and a half kind of a market but you can easily generate numbers of 100 million. 1:23:09 1 hour, 23 minutes, 9 seconds Sure. You know, one of the things you spoke in this in this conversation uh earlier uh was that your uh at a 1:23:17 1 hour, 23 minutes, 17 seconds directional level your free part of the revenue within music uh has remained flattish while a large part of growth 1:23:24 1 hour, 23 minutes, 24 seconds has come from the paid part. I mean right now I I understand that over the last one one and a half years there's 1:23:31 1 hour, 23 minutes, 31 seconds been uh CPM pressures. Uh there has been um I think YouTube algorithm changes uh and YouTube stuff has sort of not grown 1:23:41 1 hour, 23 minutes, 41 seconds as much as they would have probably thought at least our understanding is that um is that something that you expect to change over the next year as 1:23:47 1 hour, 23 minutes, 47 seconds well. So when I gave you that number right here of free being flat is more for audio than the video. 1:23:55 1 hour, 23 minutes, 55 seconds So YouTube for us has seen a growth if that's the direct question on free and pay both. Um remember video OTT had 1:24:05 1 hour, 24 minutes, 5 seconds it every year there's some other or new pressure that starts coming up. I think the ban of real money games uh ended up taking a large revenue stream out of 1:24:14 1 hour, 24 minutes, 14 seconds YouTube. But the good part for us is because the kind of content we are putting out is more film music which is 1:24:20 1 hour, 24 minutes, 20 seconds more family content that's going in. uh we as a category got affected less 1:24:28 1 hour, 24 minutes, 28 seconds um by the going out of RMG advertising money and hence on YouTube we were able to show a healthy growth both on the 1:24:36 1 hour, 24 minutes, 36 seconds free and the pay side actually I I have heard this story of people saying that the numbers from video are going down 1:24:43 1 hour, 24 minutes, 43 seconds actually I am that doesn't apply to us ah okay interesting interesting sure thank you and best of luck for the for 1:24:51 1 hour, 24 minutes, 51 seconds the coming coming years thank Thank you ladies and gentlemen. We will take that as the last question for today. I would now like to hand the 1:24:59 1 hour, 24 minutes, 59 seconds conference over to the management for closing comments. 1:25:04 1 hour, 25 minutes, 4 seconds Thank you everyone. Uh many of you guys have have have uh complimented us on our quarter 4 results. Uh please remember 1:25:12 1 hour, 25 minutes, 12 seconds you're finally seeing the fruits of what was started uh by us as a company 3 years ago. uh and this trend hopefully 1:25:21 1 hour, 25 minutes, 21 seconds is going to become even more pronounced as we people go forward. 1:25:26 1 hour, 25 minutes, 26 seconds Always keep in mind we in India are operating in world's most underpenetrated large music market with 1:25:33 1 hour, 25 minutes, 33 seconds the most dominant catalog which is growing at by 5500 songs every year a 1:25:39 1 hour, 25 minutes, 39 seconds net debt-free balance sheet and a 650 million digital footprint. every global trend, subscription growth, ARU 1:25:48 1 hour, 25 minutes, 48 seconds expansion, super fan monetization, catalog B purchases and diversification 1:25:56 1 hour, 25 minutes, 56 seconds that goes beyond streaming which includes live events has a much longer runway in India than anywhere else 1:26:03 1 hour, 26 minutes, 3 seconds and Sarama is the cleanest way for anybody to own this thesis. Thank you and look forward to talking to you guys again next quarter. 1:26:13 1 hour, 26 minutes, 13 seconds Thank you. On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.