The demonetisation of high currency notes in November last year led to the slowing down of advertising across categories and regions for HT Media. Though both the English and Hindi businesses were hurt, revenues in the case of the former alone declined by 18-21% in the fourth quarter of the fiscal year ended March 31, 2017. As per the transcript of HT Media’s Q4 FY17 earnings call held on May 19, the pinch of demonetisation was felt by advertisers from every sector barring one.
“I would say the government advertising was one category which held on, but by and large most segments were impacted,” said Piyush Gupta, Group CFO at HT Media. He added that the impact on the auto sector was relatively less owing to prior launches which were successfully carried out. While the company maintained that the road to recovery for the English business is certain, the Hindi business is expected to undergo “smarter” growth.
To achieve the same, the company is planning to scale-up the presence of Hindustan in the Hindi belt. “In our Hindi newspaper, Hindustan business, we are substantially deepening our presence in the very key critical market of Uttar Pradesh thereby a lot of working capital investment will happen,” said Gupta. Another major challenge before the company, which recorded a turnover of Rs 2681.6 crore in FY17, is concerning the financial viability of Mint.
In September 2016, the business daily migrated to being a business broadsheet. However, the newspaper continues to lack in profitability. Despite the shielding of exact loss figures, the company conceded that the newspaper is into “marginal losses” at the moment. On a positive note, the company received encouraging feedback regarding the revamp of Mint. It was noted that the broadsheet format enabled Mint to publish more content by covering issues which would have otherwise gone unnoticed.
“The only problem which is happening is that the business paper market has been a bit of a dampener for quite some time and post demonetisation while the general business papers have been hit on the revenue, the business papers have been hit harder,” felt Gupta. Nevertheless, he was optimistic that the fortune of the business newspaper is bound to improve once the market bounces back to being normal in a couple of quarters. Besides that, HT Media is confident that its organisation-wide cost rationalisation exercise will begin to yield results by the end of the first quarter of FY18. Albeit the cost-cutting measures are slated to continue over the next two months, HT intends to slash 5-10% of its entire cost structure through it.