Media companies are expected to grow ~8% annual revenue to Rs 60,000 crore by fiscal 2027, driven by digital expansion. The digital segment’s share is set to increase from 12% to 18%, despite initial profitability challenges. Improved ad targeting and cost management will help operating margins rise to 18%.
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According to CRISIL Ratings, media companies are expected to see annual revenue growth of ~8%, reaching ~Rs 60,000 crore by fiscal 2027, primarily driven by the increasing contribution from the digital segment. This comes after a slower compound annual growth rate (CAGR) of ~5% between fiscals 2019-2024, with revenue projected at ~Rs 47,000 crore by fiscal 2024. The growth in revenue, coupled with cost rationalization, is forecast to expand operating margins by ~500 basis points to 18% by fiscal 2027. CRISIL Ratings analyzed 20 companies, representing 55% of the media industry’s revenue.
The shift towards digital consumption, driven by smartphone proliferation, affordable mobile data, and 5G adoption, initially slowed revenue growth as media companies were slow to adapt. However, as Manish Gupta, Senior Director, CRISIL Ratings, states, “media companies have begun focusing on digital modes such as over-the-top platforms, social media, and mobile apps,” which will boost the digital segment’s share of revenue from ~12% in fiscal 2024 to over 18% by 2027.
Traditional print media will also benefit from growing ad revenues, supported by sectors like fast-moving consumer goods, automobiles, and education. Yet, profitability in the digital space has been hampered by high initial costs for manpower, content creation, and marketing. Despite this, Ankit Hakhu, Director, CRISIL Ratings, notes, “discovery of the product fits” has enabled companies to target their audiences more effectively, improving promotional efficiency.
Targeted ad campaigns, driven by analytics, will enhance ad revenues and help companies absorb fixed costs better. The digital segment, currently facing ~20% operating losses, is expected to break even by fiscal 2027, though profitability could still be impacted by fluctuating newsprint prices.
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