Media company HT Media is launching an online portal focused on education, Vinay Mittal, Chief Financial Strategist at the company said during its earnings conference call. This doesn’t come as a surprise to us, since HT’s Internet company FireFly E-Ventures had been handling sales for education portal StudyPlaces; FireFly was involved in talks for acquiring StudyPlaces before Educomp bought it for upto $1.5 Million.
Update: following a comment (below) we checked for further updates. According to Educomp’s subsequent filing, StudPlaces was acquired for Rs. 6.02 Cr, out of which Rs. 4.17 Cr was through preferential allotment of shares, and Rs. 1.85 Cr was cash.
The launch of an education portal would actually be a change in approach from HT Media on the Internet: it usually tends to enter segments rather late: whether Go4i, Shine or the DesiMartini acquisition. It is still early days for the education segment online, and though it is crowded and has had at least one failure. However, HT intends to tread cautiously.
Responding to a question on the company’s Internet strategy on the call, Mittal said “We are very clear that we will keep making investments in the Internet, but we would cap them at not more than Rs. 30-35 crores of EBITDA losses per annum. It’s not that one would go overboard. We have seen traction in Shine, and as we see more and more traction that comes through in Shine, and it becomes something that we are very sure will take off, then only will we start unfolding into other portals. It’s not like I’ll try and invest and open another portal and a third portal without seeing the success of Shine. You will see an education portal, which has the same platform the jobs site, and synchs in (sic) with the education institution that we visit as a part of our sales effort in Shine.”
HT Media CEO Rajiv Verma believes that Shine.com has “become very strong, with a resume database growing at 8000 resumes per day. Advertising revenues will also start coming, once recruitments have started. Last year, most companies were in downsizing mode. Now recruitment has been restarted, and we’re seeing a lot better traction.” He added that, at a marginal cost, the company will add many more properties in the “education, ratings and reviews and entertainment space. We did not lose direction, we are putting our weight behind it, because we believe these (Internet) are busienss of the future and HT has the necessary wherewithal and bandwidth to create a successful foray because of that.” During the call, Mittal also said that they would be looking at the matrimonial space.
Inputs on non-digital segments from the call:
— Print has gone to an EBITDA margin of 27%, and we did more than Rs. 100 crore EBITDA for this quarter. For full year, topline remains depressed and moved up only by only 5%, which in a declining economy was good. EBIDTA margin has gone up to 20%, compared to last year at 9%. EBITDA today is Rs. 296 crore for the year. This was helped by raw material costs being taken out by Rs. 85 crores. As a result of this, when EBITDA was only Rs. 120 crore, this year we have done almost Rs. 296 crores EBITDA on a consolidated basis. We are almost net debt free, compared to last year, when we had upwards of Rs. 200 crores of debt on the books of the company.
— Mint: HT Media’s business publication Mint reported revenues of Rs. 14 crores for the quarter, and Rs. 45 crores for FY10. Verma said that “Mint has unquestionably become the second largest brand in India, after Economic Times, and has distanced itself from number 3, which is Business Standard. This expansion will continue into cities like Ahmedabad, Surat and possibly in South in Hyderabad etc.”
— Our brand equity measures have all been very healthy, and improved a lot in the last one year. HT is the number one brand in Delhi, both in average issue readership as well as total readership. Delhi is our main business, where we are number one. HT Mumbai has not broken even yet. The other data is that our Hindi brand is the fastest growing brand in India, readership increasing at 6%. It’s average issue readership is nearly 1 crore, and it’s a robust number 3 brand, and it’s only a matter of time before it climbs even more heights.
— Ihe imported newsprint cost for India is $635. We’re covered uptil November, in terms of inventory. Domestic newsprint, we have 3-4 weeks of inventory. There isn’t a global demand pull in terms of newsprint, because global consumption is not increasing.
— Fever 104 saw a growth of 65-70% in revenue, and we expect to double this business again in the not too distant future. Our strategy of targeting the youth segment and the adult-contemporary-hit formatted radio station has paid rich dividends. It became profitable during the last quarter of this year, and made Rs. 2 crore EBITDA. We expect this to improve by a handsome margin this year.
— If Phase 3 of radio licensing comes, we will be active participants in it.
Partnership For Growth
Total amount invested in the ‘Partnership for growth”, HT Media’s ads for equity model, so far, is Rs. 280 crores.
— The economy seems to have stabilized, advertising market is picking up. We’re looking for inorganic expansion in all three segments: Print, Radio and Internet. The print industry is headed towards consolidation over the next two years. Jagran has kicked off by acquiring Mid-Day. We do believe we will see consolidation, especially in the Hindi and vernacular space.