An analysis of print media companies rated by CRISIL Ratings, accounting for over 40 pc of the sector revenue, indicates that higher spending ad spend by corporates in key sectors and an uptick in government ad spend in view of the upcoming state and general elections are expected to lift the revenue of the Indian print media sector by 13 to 15 pc to around Rs.30,000 crore in FY24.
A growing topline, along with a decline in newsprint prices, will lead to profitability of the sector rising to 14.5 pc this fiscal, predicts the CRISIL analysis.
The sector revenue – split 70:30 between ads and subscription – had fallen by 40 pc in FY2021 amid the pandemic. However, FY2022 and 2023 saw it bounce back by around 25 pc and 15 pc respectively, informed a CRISIL statement.
Naveen Vaidyanathan, Director, CRISIL Ratings, said, “Steadfast domestic demand for fast-moving consumer goods, retail, clothing and fashion jewellery, launches of new automobiles, rising preference for higher education, online shopping and growing real estate sales – sectors that contribute about two-thirds of the print media ad revenue – will keep the momentum in ad revenue growth going. Higher ad spends by the government, which contributes a fifth of the sector’s ad pie, in the wake of the upcoming elections will also push growth. Therefore, we expect ad revenue to grow 15 to 17 pc, almost reaching the pre-pandemic level this fiscal.”
Physical newspapers saw 8 to 10 pc growth in subscription revenue in FY22 and FY23, according to the analysis. It is expected to grow by 5 to 7 pc in the current financial year.
English newspapers, which have been feeling the heat of digital competition more than the vernacular ones, have started monetising premium digital content and seeing good traction, according to the ratings agency.
Rounak Agarwal, Team Leader, CRISIL Ratings, added that a steep surge in newsprint prices hit operating margins of print media companies last financial year even though revenue increased. However, newsprint prices have come down in recent months by as much as 15 to 20 pc from the peak last fiscal. Along with revenue growth, this should help profit grow to around 14.5 pc this fiscal; over the medium term, margins should remain healthy but below the steady-state margins of over 20 pc in the past, he explained.
