₹1,105 crore loss in FY25: ShareChat faces ad revenue stress amid microdrama push

Homegrown social media platform ShareChat has reported a largely flat revenue performance in FY25, underscoring the pressure on its advertising-led business even as aggressive cost controls helped pare losses. The company’s operating revenue in FY25 stood at ₹723 crore, barely up from ₹718 crore a year earlier, highlighting the struggle to revive ad growth at a time when peers are scaling faster in India’s booming digital market.

While ShareChat has emphasised a sharp improvement in profitability metrics, the lack of meaningful topline expansion has raised questions about the platform’s ability to monetise its large user base amid intensifying competition and a structural slowdown in key ad categories.

As per company filings, adjusted EBITDA losses narrowed 72% year-on-year to ₹219 crore, down from ₹793 crore in FY24 at the parent entity Mohalla Tech. The improvement was driven largely by steep cost rationalisation, lower employee expenses and tighter control on discretionary spends, rather than a resurgence in advertising demand.

The company said its core business turned cashflow positive during the year, aided by leaner operations and a sharper focus on higher-yield content distribution. However, the modest revenue growth suggests that advertising — historically ShareChat’s primary monetisation engine — remained under strain.

That pressure has been compounded by the sharp decline in real-money gaming (RMG) advertising, once a significant contributor to digital ad spends. The government’s ban on RMG advertising in August, coupled with earlier GST hikes on the sector, has hit platforms like ShareChat harder than global rivals with more diversified advertiser bases.

In a clear acknowledgement of this weakness, the company is now pivoting away from its earlier heavy dependence on advertising towards a mix of ads and subscriptions. “Subscription will be a new revenue line item in FY27,” said co-founder and CFO Manohar Charan Singh in a virtual briefing, adding that live streaming would follow.

This strategic shift comes even as ShareChat claims to have crossed ₹1,000 crore in annual recurring revenue by the end of the first half of FY26 and is targeting around 30% topline growth in the current fiscal. Yet, analysts note that these projections hinge heavily on new verticals rather than a turnaround in the core ad business.

A significant portion of future investments — nearly 70–75%, according to Singh — will be channelled into micro-dramas through QuickTV, ShareChat’s newly launched app that has crossed 15 million downloads within four months. The company plans to rely on third-party creators for content and has ruled out AI-generated shows for now, betting instead on distribution scale to crack a crowded micro-drama market.

Founder and CEO Ankush Sachdeva said the company’s cost discipline and restructuring efforts are now yielding results, allowing it to invest in the next phase of growth. “We have built a strong core business with a large and sticky user base,” he said. But industry watchers argue that scale without strong monetisation has long been ShareChat’s Achilles’ heel.

Audited financials show that net losses narrowed 40% to ₹1,105 crore in FY25, alongside a 20% reduction in employee costs. While this marks tangible progress on efficiency, the underlying business challenge remains: sustaining growth in a market dominated by global giants like YouTube and Instagram, which command disproportionate user time and advertising budgets.

ShareChat has raised about $1.3 billion from investors including Twitter (now X), Tencent and Alkeon Capital, and secured $65 million in debt last year. With capital efficiency now firmly in focus, the company’s next test will be whether new subscription-led bets can compensate for a still-sluggish ad business and deliver durable profitability, rather than another cost-led pause in losses.