Regional print media revenues to grow 9% on higher ad revenues in FY25: Crisil

Mumbai: Higher ad revenues are expected to help regional print media entities post an 8-9 per cent revenue growth in 2024-25, according to a report released on Thursday.

The growth will be higher than the 6-7 per cent the industry is estimated to have achieved in FY24 on the back of higher government advertising in the run-up to the national elections, the report said.

In FY25, the further decline in newsprint prices, which constitute up to 40 per cent of the costs, will further help expand the operating profit by another 2 percentage points to 20-22 per cent, domestic rating agency Crisil said.

The operating profit margin had expanded by 4 percentage points in the previous fiscal year on the back of decline in newsprint prices, it said.

The estimates are based on an analysis of eight regional print media players, which account for 60 per cent of the regional print media market in terms of circulation, it said.

The revenue growth will be driven majorly by the rise in advertising, which contributes two-thirds of revenues for such players, it said.

It's Deputy Chief Ratings Officer Manish Gupta said there will be a moderation in the government segment when it comes to advertising, but others such as automobiles, FMCG, education, e-commerce, real estate, and services will continue booking space with the regional print media for its wide reach, which will lead to a 9-10 per cent growth in advertising revenue, he added.

Subscription revenues, which contribute around a fourth of the topline, are also holding up and will grow by up to 4 per cent in FY25, the agency said.

Interestingly, the regional print media players have restarted to push for subscriptions in places adjacent to their existing coverage area, it said, adding that entities were deliberately slow in growing their subscriber base as cover prices were not sufficient to absorb the cost of newsprint paper.

"While newsprint prices have remained volatile since October 2023 due to the prevailing shipping issues around Red Sea, they are still well below their average levels of FY24 and are expected to remain range-bound because of muted global demand and adequate supply," Crisil Director Ankit Kedia said.

Any major change in economic prospects, stark change in consumer preference away from newspapers or rise in newsprint prices owing to global factors will bear watching, the agency said.