revenue growth

The Indian media industry is projected to witness annual revenue growth of 8% by FY2027, driven by the increasing shift toward digital platforms, according to a recent CRISIL Ratings report. This marks an improvement from the 5% annual growth recorded between FY2019 and FY2024. The report, which analyzed 20 media companies accounting for 55% of the industry’s revenue, estimates that media revenue will reach approximately ₹60,000 crore by FY2027. Alongside revenue expansion, operating margins are expected to improve by nearly 500 basis points (bps) to 18%, aided by cost rationalization. Key Growth Drivers: Rising digital ad revenue as consumer preferences shift to online content Growth in traditional ad revenue from print, fueled by domestic retail demand in FMCG, automobiles, education, e-commerce, and real estate Increasing smartphone penetration, low-cost mobile data (approx. $0.2 per GB), and widespread 5G adoption Despite the delayed digital transformation by Indian media firms, the segment’s revenue share is expected to increase from 12% in FY2024 to over 18% by FY2027. However, high manpower, content creation, and marketing costs have kept digital ventures unprofitable, with the industry reporting a 20% operating loss in FY2024. Manish Gupta, Senior Director at CRISIL Ratings, stated: “To better leverage the digital wave, media companies have begun focusing on OTT platforms, social media, and mobile apps.” However, improved targeted advertising and customer segmentation are expected to enhance digital profitability, according to Ankit Hakhu, Director at CRISIL Ratings. At least 8 out of 20 companies in the study have successfully identified the right audience fit, allowing for more cost-effective promotional strategies. The report also warns of potential risks, particularly fluctuations in newsprint (NP) prices, which account for 30-40% of costs. Unexpected price surges, like the 23% spike in FY2023, could impact overall industry profitability. Conclusion: With an accelerated digital shift and stronger ad revenues, India’s media industry is poised for sustained growth. However, firms will need to optimize digital investments and mitigate supply chain risks to fully capitalize on this transformation. Source: Business Standard