Regional Print Media to See 8-9% Revenue Growth This Fiscal: CRISIL Ratings

CRISIL Ratings projects an 8-9% revenue boost for regional print media, driven by strong advertising demand and resilient subscription base. Operating profitability is also expected to expand by 200 basis points due to softening newsprint prices.

Buoyant growth in advertising revenue, driven by strong demand from key advertising sectors, coupled with a loyal subscriber base, is predicted to lift the total revenue of regional print media companies by 8-9% this fiscal year, according to Crisil Ratings. The healthy growth, along with softening newsprint prices, will also expand operating profitability by 200 basis points, reaching 20-22%.

This expansion will be in addition to the 400 basis points margin increase already recorded in the last fiscal year. CRISIL's assumption is based on an analysis of eight regional print media players, which together account for 60% of the market in terms of circulation.

Advertising revenue contributes about two-thirds of total revenue and is highly correlated with economic sentiment and corporate as well as government spending on advertisements. "Economic sentiment remains positive, as evidenced by increased budgetary spending on advertisement and marketing by corporates. Demand from key sectors like automobiles, FMCG, education, e-commerce, real estate, and services is also robust," said Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings.

Subscription revenue remains resilient, making up 25% of the sector's revenue. Regional players are now pushing for subscriptions in adjacent areas to their existing coverage. Previously, these efforts were slowed due to insufficient cover prices to absorb newsprint paper costs.

The cost of newsprint paper, a critical raw material constituting 35-40% of total operating expenses, continues to decline due to modest global demand and the easing of supply chain issues. Newsprint prices, which surged by 41% in fiscal year 2023 amid logistical disruptions from the Russia-Ukraine conflict, have since softened and continue to fall. (ANI)