MAM
TRAI: FM Radio ad revenue moved up in third quarter
BENGALURU: After the slump in advertisement revenues by private FM radio stations in the quarters ended 30 June 2016 (Q1-17) and 31 March 2016 (Q4-17), the trend seems have been changed, albeit marginally for Q2-17 (quarter ended 30 September 2016) and Q3-17 (quarter ended 31 December 2017) according to the data released by The Telecom Regulatory Authority of India (TRAI).
According to TRAI data for Q3-17, radio combined ad revenues reported by 272 of the 273 private operating FM radio stations were Rs546.72 crore or an average of Rs2.01 lakh per station for Q3-17. This washigher than the average of Rs 1.94 crore per station (combined revenue Rs502.13 crore from 259 stations)for the immediate trailing quarter. Q3-17 ad revenue was however short by about Rs12 lakh per station as compared to the corresponding year ago quarter for which TRAI reported combined ad revenue of Rs533.7 crore from 240 radio stations (Average revenue per station of Rs2.22 crore per station). As a matter of fact, in Q2-16, the average revenue per station was highest at Rs 2.22 crore during the period commencing from end Q1-12 until the current quarter.
Please refer to the Figure below for FM Radio Ad Revenue over a five year plus period spanning a 23 quarter period starting with the quarter ended 30 June 2011 (Q1-12) until the quarter ended 31 December 2016 (Q2-17) as per TRAI data. The amounts are in Rs crore and rounded off to the nearest decimal place in the case of combined ad revenue and two decimal places in the case of Average Revenue per station.
In absolute terms, combined Radio ad revenue in Q3-17 increased 8.9 percent and 3.4 percent year-over-year (y-o-y, as compared to the corresponding quarter of the previous year) and quarter-over-quarter (q-o-q, immediate trailing quarter) respectively. Average revenue per station in the current quarter declined 9.6 percent y-o-y, but increased 3.7 percent q-o-q. The total number of stations in Q3-17 increased 13.3 percent y-o-y and 5 percent q-o-q.
Please refer to Figure B for y-o-y and q-o-q changes
Thirteen new private FM stations commenced operations to take the total number of stations at close of 31 December 2017 to 273 in the third quarter of 2017 according to TRAI. At the close of Q2-17 (previous quarter), there were 260 private FM stations operating in the country.
Here’s two of the major radio networks’ performed in Q3-17
One of the biggest players in the private FM radio business – Entertainment Network India Limited that runs the Radio Mirchi network among others, reported 4.9 percent y-o-y increase in consolidated Total Income from Operations or revenue (TIO) for Q3-17 of Rs 150.65 crore for the current quarter as compared to Rs 143.57 crore in the corresponding quarter of the previous fiscal. Q-o-q, revenue in Q3-17 also increased 16.2 percent from Rs 129.65 crore in Q2-17.The company’s consolidated profit after tax (PAT) in Q3-17 declined by 43.1 percent year-over-year (y-o-y) to Rs16.42 crore (10.9 percent margin) as compared to Rs28.86 crore (20.1 percent margin) and more than doubled (increased 2.18 times) q-o-q from Rs 8.05 crore (6.2 percent margin).
Commenting on the results, ENILmanaging director and chief executive officer, Prashant Pandaysaid, “We are poised on the cusp of a strong growth curve with the LoveNetwork – 8 ‘Mirchi Love’ channels of our own and 3 ‘Ishq FM’ channels of TV Today –now fully operational. This network, along with the original ‘Mirchi’ network, now comprising 42 channels, offer advertisers the widest coverage across the country. With thegovernment soon to announce the results of the second batch of auctions held recently, we willgrow even bigger. These are exciting times!”
Another player, DB Corp’s MY FM radio network which encompassed 26 live stations with the launch of nine new stations during Q2-17 and Q3-17 reported revenue increase in Q3-17 of 12.4 percent to Rs 36.32 crore as compared to Rs 32.32 crore in the corresponding year ago quarter. DB Corp’s earnings press release said that its radio business operating profit (EBIDTA) grew 3 percent y-o-y to Rs 14.8 crore (41 percent margin), while profit after tax (PAT) also increased 3 percent y-o-y to Rs 8.1 crore (22 percent margin).
Unlike most of the other players in the media and entertainment, the major players of the radio industry were not as affected by the government’s demonetisation drive that commenced on November 8, 2016. With more stations to roll, the industry’s ad revenues can only grow.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
