Higher spends on ads by companies in key sectors as well as the government, in view of the upcoming State and general elections, is expected to boost the revenues of Indian print media sector. As per Crisil Ratings estimates, revenues of the print sector are expected to grow at 13-15 per cent to ₹30,000 crore this fiscal. Ad revenues are expected to touch pre-pandemic levels, it added.

Profitability is also expected to improve sharply on the back of a growing topline, along with a decline in newsprint prices, by about 1,000 basis points (bps) to about 14.5 per cent his fiscal, it added.

Nearly 70 per cent of the revenues of the print media sector comes from advertisements, with about 30 per cent from subscriptions. The sector revenue had plummeted by about 40 per cent in FY21 amid the pandemic. However, FY22 and FY23 saw it bounce back by about 25 per cent and about 15 per cent, respectively. This was due to the boost in ad spends.

Naveen Vaidyanathan, Director, Crisil Ratings, said: “Steadfast domestic demand for fast moving consumer goods, retail, clothing and fashion jewellery, launches of new automobiles, rising preference for higher education, online shopping and growing real estate sales — sectors that contribute about two-thirds of the print media ad revenue — will keep the momentum in ad revenue growth going. Higher ad spends by the government, which contributes a fifth of the sector’s ad pie, in the wake of the upcoming elections will also push growth. Therefore, we expect ad revenue to grow 15-17 per cent almost reaching the pre-pandemic level this fiscal.”

This recovery indicates “enduring popularity” of print media on the back of low cover prices, convenience of home delivery, ability to provide original and credible content and sticky reading habits.

“A significant share of readers continue to prefer physical newspapers as reflected in the 8-10 per cent growth in subscription revenue in each of the past two fiscals. This fiscal, subscription revenue is expected to grow 5-7 per cent, largely led by moderate revisions in cover prices,” it noted.

premium digital content

The report noted that the print media companies, especially English newspapers, have also begun monetising premium digital content, which is seeing good traction.

Rounak Agarwal, Team Leader, Crisil Ratings, said: “The steep surge in newsprint prices sheared about 850 bps off the operating margins of print media companies to about 4.5 per cent last fiscal even though revenue increased. However, newsprint prices have come down in recent months — correcting as much as 15-20 per cent from the peak last fiscal — owing to modest global demand and easing of supply chain issues.”

Easing of news print prints along with revenue growth is expected to “ shore up margins by about 1,000 bps to about 14.5 per cent this fiscal” on a low base of last fiscal.

“Over the medium term, margins should remain healthy but below the steady-state margins of >20 per cent seen in the past,” Crisil Ratings report noted.