Mumbai: Imagine waking up to the fiery frustration of your father or grandfather, only to find him fuming, his usual calm shattered, and the TV remote clutched in his hand. The news channel he swears by—his lifeline to the world—is now a blank screen, a casualty of the financial chaos engulfing one of India's iconic media houses. This isn’t just a glitch; it’s a symptom of something far deeper. New Delhi Television Limited (NDTV), once a household name for reliable news, is now struggling under the weight of plunging revenues and ballooning costs leaving the company on shaky ground.
NDTV’s revenue from operations for the quarter ending 30 September 2024, stood at Rs 5,980 lakhs, a 3.4 per cent drop from Rs 6,190 lakhs in the corresponding period of 2023. The fall in revenue is indicative of a deeper malaise afflicting the company, which has faced stiff competition and shifting consumer preferences. The total income also slid to Rs 6,432 lakhs, down from Rs 6,763 lakhs a year ago. While the quarter's operational revenue depicted a stark drop, other income further declined to Rs 452 lakhs from Rs 573 lakhs in the same quarter of the previous fiscal year, highlighting a troubling trend of diminishing ancillary revenue streams.
The company’s cost structure exacerbated the situation, with total expenses soaring by nearly 90 per cent, from Rs 5,955 lakhs in Q2 FY24 to Rs 11,267 lakhs this quarter. A major contributor was the surge in production and service costs, which nearly doubled to Rs 2,141 lakhs from Rs 1,180 lakhs last year. Employee benefit expenses also saw a considerable increase, rising to Rs 2,513 lakhs, compared to Rs 1,809 lakhs in Q2 FY24, signalling higher payroll liabilities despite stagnant revenue growth. Additionally, marketing, distribution, and promotional expenses ballooned to Rs 3,357 lakhs, reflecting the company’s aggressive but perhaps misaligned strategies to regain market share.
The financial turmoil is further underscored by a staggering quarterly net loss of Rs 4,835 lakhs, a dramatic reversal from the profit of Rs 808 lakhs in the previous year’s second quarter. This shift from profit to loss over a mere 12-month period is a concerning indicator of the company’s precarious financial position. For the half-year period ending 30 September 2024, the company reported a net loss of Rs 9,250 lakhs, starkly contrasting with a marginal profit of Rs 67 lakhs in the same period last year.
The bleak earnings report suggests NDTV’s cost-management strategies have been ineffective amid rising operational expenses. Depreciation and amortisation expenses alone nearly tripled to Rs 593 lakhs, further adding pressure to the bottom line. Finance costs have also surged to Rs 662 lakhs from Rs 165 lakhs a year prior, indicating increased borrowing and debt-related expenses, which could erode profitability further if not contained.
The ongoing financial struggles have raised questions about NDTV's ability to navigate the competitive media landscape. "We continue to face industry headwinds that have impacted our revenue streams," stated company secretary & compliance officer, Parinita Bhutani Duggal. The company’s challenges extend beyond financial performance, as it grapples with regulatory scrutiny and legal battles, which could potentially add to the financial strain in the coming quarters.
Looking ahead, NDTV's management faces the daunting task of reversing these trends, with mounting costs and declining revenues posing significant hurdles. Analysts suggest that strategic restructuring, cost-cutting measures, and exploring new revenue channels will be critical for the company’s turnaround. However, the lack of immediate recovery signals in this quarter’s report does not inspire confidence, leading stakeholders to brace for potentially tougher times ahead.
