Financial Performance Summary

Quarter Ended June 30, 2026 (Q1 FY27):

  • Revenue: ₹106.51 crores, representing 21% year-on-year growth
  • Profit After Tax (PAT): ₹43.89 crores, showing 4% degrowth compared to Q1 FY26
  • Content costs increased by 90% year-on-year
  • Digital segment contributed approximately 75% of total revenue
  • Subscription-based revenue accounted for 10-15% of total revenue
  • Cash balance as of June 30, 2026: ₹345 crores

Content Performance and Releases

During Q1 FY27, the company released 73 songs comprising:

  • 55 film songs
  • 18 non-film songs

Key successful releases:

  • "Hai Jawani Toh Ishq Hona Hai" album crossed 186 million YouTube views
  • "Chunnari Chunnari - Let's Go" (most popular track) crossed 70 million YouTube views
  • "Main Vaapas Aaunga" album achieved nearly 100 million YouTube views
  • "Tere Paas Mein" female versions showed strong traction on Spotify
  • "Tere Liye" from movie "Prince" secured position among top 10 songs on Spotify's daily charts

Cumulative YouTube subscriber base increased to 158.3 million subscribers.

Content Acquisition Strategy

  • Annual content budget guidance: ₹90-100 crores for FY27
  • Content cost represents 20-25% of revenue as a long-term policy
  • Content acquisition distribution: 1/3 from outside production houses, 1/3 from Tips Films, 1/3 internally produced non-film music
  • Library expanded by 4,000 songs from acquired Gujarati catalog (digitized in Q4 FY26)
  • Conservative accounting policy: entire content cost of new releases expensed in quarter of acquisition

Management Guidance and Outlook

  • Maintained revenue growth guidance: 20% for FY27
  • Maintained PAT growth guidance: 20% for FY27
  • EBITDA margin guidance: 65-70% on annual basis (quarterly variations expected due to content release timing)
  • Subscription revenue expected to grow significantly over 3-5 years, mirroring global trends where subscription contributes >50% of revenue
  • Paid subscriber growth estimated at 40-50% CAGR

Capital Distribution Policy

  • Board meeting scheduled for August 5, 2026 to consider share buyback
  • Company committed to distribute last year's PAT of ₹217 crores through dividends and buyback in current year
  • Evaluating both open market buyback and tender offer options
  • Open market buyback option becomes effective from August 1, 2026

Platform Developments and Negotiations

  • YouTube Shorts renewal deal negotiations ongoing, update expected by end of Q2 FY27
  • Spotify and YouTube implemented price hikes in previous calendar year
  • Amazon Music started 3-tier structure for non-Prime members
  • No material impact expected from Spotify's recent subscription price revision

Operational Highlights

  • Employee cost increased due to change in labor code, moving consultants to payroll (no net impact on profit)
  • Company maintains partnerships with Warner Music and Sony Music Publishing as distributors
  • Searching for replacement after exit of Mr. Hari Nair, with current management handling operations
  • No promoter stake sale or strategic investment plans currently

Industry Context

  • Music industry expected to grow at 8% annually
  • Global music labels earn ₹0.50-0.90 per stream vs. Indian labels earning ₹0.04-0.10 per stream
  • Gap primarily due to lower subscription prices and lower subscription percentage (15% in India vs 50-60% globally)
  • Spotify targeting 15 crore potential users in India
  • No significant competitive pressure from international players due to strong relationships and internal content creation capabilities

Revenue Composition

  • 15% of revenue comes from content released in last 3 years
  • 85% of revenue from catalog spanning past 3 decades
  • No platform-specific revenue share disclosure due to competitive reasons

Conference Call Participants

Management:

  • Mr. Kumar Taurani - Chairman and Managing Director
  • Mr. Girish Taurani - Executive Director
  • Mr. Sushant Dalmia - Chief Financial Officer

Moderator: Ms. Ayushi Gupta - MUFG Intime