Shemaroo suffers loss of Rs 36.5 crore amid ad crunch
Shemaroo’s debt stood at Rs 331 crore as of December 2024, down Rs 7 crore from Rs 338 crore in September.
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Shemaroo Entertainment Ltd. wrote off Rs 138 crore worth of inventory in the past 12 months, revealed the company’s management in an investor call on January 17 discussing the third quarter of the financial year 2024-2025 (Q3FY25). Shemaroo’s inventory stood at Rs 589 crore as of December 2024, down from Rs 727 crore in December 2023, which is a decrease of 18.9%. It was brought down to Rs 682 crore in March 2024 and to Rs 618 crore in September 2024.
However, the company has also added new pieces of content to its inventory, which it attributed for an increase in its interest costs, which went to Rs 9.9 crore in this quarter from Rs 8.4 crore in the previous one. The company explained that it had picked up a number of new pieces of content using short-term loans, which it had since paid off.
Financial Results: According to the company’s stock exchange filings, Shemaroo showed a consolidated net loss of Rs 36.5 crore in Q3FY25, an increase of 20% when compared to losses in the same quarter of the previous year, which were only Rs 30.4. Meanwhile, losses in Q2FY25 amounted to Rs 25.9 crore. The company reported a total income of Rs 167.3 crore. It also saw a 5.4% increase YoY in its total income, going from Rs 155.9 crore last year.
In its earnings call, the company also stated that it had a positive operational cash flow of Rs 7 crores, since the beginning of the financial year.
Growth Primarily By Digital Segment: Shemaroo’s growth is currently driven by its digital syndication business, under which it offers content to other platforms. The management stated that there was a significant demand crunch in advertising revenue, especially in TV.
The company’s digital platforms are still growing, the company informed, especially in the Gujarati language, in which it released 14 new titles, including movies, series, and plays only this quarter. Its YouTube channel, Shemaroo Filmi Gaane, also crossed 70 million subscribers. It also launched a new Tamil devotional channel called Deiveegam on the Direct-T0-Home (DTH) service Tata Play.
Despite the demand crunch in advertising, the company’s television channels have increased their viewership. As of September 2024, the company’s Hindi General Entertainment Channels (GEC) increased their viewership share to over 7.6%, from 2% three years ago. Shemaroo’s Marathi channel Marathi Bana had also achieved a viewership share of around 6% in the Marathi genre as of September 2024.
The company has grown significantly in the digital segment, which covers 35% of its business as of FY2024, as opposed to only 20% in 2018.
Shemaroo’s debt stood at Rs 331 crore as of December 2024, down Rs 7 crore from Rs 338 crore in September. The management stated that it was confident of reaching its goal of reducing debt by Rs 100 crore by the end of FY 2026. The company was awaiting some television syndication deals which were deferred. “Once those materialize, a substantial portion of that would go into the debt repayment in that part,” said the company.
No Resolution On GST Notices: The government accused Shemaroo of evading Goods and Services Tax (GST) of Rs 133.60 crores via 20 bogus firms in 2023, which was followed by arrests of Joint Managing Director Atul Maru, CEO and director Hiren Gada and CFO Amit Haria. The complaint stated that Shemaroo had issued invoices without an actual supply of goods or services to these 20 bogus firms, which were reportedly owned by former employees of Shemaroo.
In the earnings call, the company’s management stated that it had sent a letter denying all allegations to the GST department and was now awaiting further instructions. This is similar to what it had stated in the previous call.
Shemaroo had also complained of a decrease in broadcast advertising spending in its previous earnings call in September last year, which it attributed to a “continued slowdown in the consumption economy.”
