Mumbai: You are crawling through the typical Mumbai’s infamous Saki Naka traffic, inching your way home after a long day. The only companion during this gridlock is the trusty voice of Radio City, filling the airwaves with your favourite tunes, celebrity gossip, and city updates. But behind the scenes, even as Music Broadcast Limited (MBL) keeps listeners entertained, the company grapples with financial challenges.
In its second quarter of FY25, MBL operating Radio City, recorded an increase in revenue to Rs 5,482.87 lakh, a noticeable 4.54 per cent improvement compared to the corresponding period last year. As India’s radio landscape evolves with shifting audience preferences and advertising trends, MBL’s ability to maintain revenue growth reflects its adaptability and market positioning. Yet, despite this, the company faced pressures that have impacted its profitability.
Total income for the quarter stood at Rs 6,131.77 lakh, a rise from Rs 5,815.48 lakh in Q2FY24, bolstered by a combination of operational revenue and other income sources. The operational strength is evident in the half-year results as well, with total income reaching Rs 12,754.13 lakh, marking a 9.15 per cent year-on-year growth. This growth trajectory signals a recovery trend in India’s media and entertainment sectors post-pandemic.
However, profitability remains an issue. The company registered a net loss of Rs 199.24 lakh this quarter, a swing from the Rs 36.62 lakh profit posted in Q2FY24. This loss has expanded the net profit margin into negative territory at -3.63 per cent, down from 0.70 per cent last year. The adverse movement in margins can be attributed to rising expenses across employee benefits, amortisation, and other operational costs.
Expenses grew at a faster pace than income, with total expenses reaching Rs 6,329.01 lakh for Q2FY25, compared to Rs 5,682.03 lakh for the same period last year. Employee benefits rose sharply to Rs 1,999.30 lakh, a 15.88 per cent increase over Q2FY24. This reflects Radio City’s efforts to retain talent and maintain operational efficiency amid growing competition from digital and online platforms. Meanwhile, depreciation and amortisation expenses surged 37.34 per cent to Rs 862.80 lakh.
The sharp rise in these costs, combined with the firm’s legal and financial obligations, is likely to have weighed down overall profitability. Additionally, finance costs climbed to Rs 286.18 lakh, up from Rs 247.44 lakh in the same quarter last year.
Despite the profitability challenges, the company remains operationally resilient. It reported an operating margin of 17.36 per cent for the quarter, and while this is a decline from 23.05 per cent in Q2FY24, it still reflects sound cost management in the face of rising expenses. MBL has also been involved in an ongoing legal case with Phonographic Performance Limited (PPL), over licensing fees, which continues to pose financial uncertainties. The outcome of this litigation could have further implications on the company’s future cash flows.
The company has maintained a strong debt-to-equity ratio of 0.23, reflecting a conservative financial strategy. Moreover, MBL’s net worth increased to Rs 53,220.13 lakh from Rs 52,601.41 lakh in the previous year, demonstrating long-term financial stability, even as short-term challenges mount.
The radio industry, long considered a staple of India’s media consumption, is undergoing significant transformation with competition from digital streaming services and podcasts. MBL’s ability to retain its market share and attract advertisers will be key to its recovery. Despite near-term setbacks, MBL’s revenue growth highlights the continued relevance of radio as a medium in India’s diverse media landscape.