The financial year 2017-18 was eventful as India's macroeconomic sentiment remainedoptimistic for most of the year. The country's GDP grew by 6.7% during FY 2017-18 andpowered ahead by 7.7% in the fourth quarter after the twin impacts of remonetisation andGoods and Services Tax (GST) implementation began to wane. If we take a broad perspectiveeven with this sluggish pace the 4-year average GDP growth has been 7.3% the highestamong the world's major economies. With rapid GST implementation and consistent focus onsolving the issues related to non-performing assets of banks the economy is headingtowards enhanced momentum.
Supported by favourable demographics improving performance of several advertisersectors and a huge demand for information and knowledge India's Media and Entertainment(M&E) sector is seeing an interesting change. The reach of media is expandingsigni3cantly. This is not only driven by traditional media like television radio andprint but also by the digital evolution. Media consumption is growing exponentiallybased on growing choices and rising opportunities of access; with consumers consuming thecontent of their choice at the place of their choice in the language of their choice andat the time of their choice. India's M&E industry is expected to grow by 11.6% CAGR totouch Rs.2 trillion by 2021 from Rs.1.5 trillion (US$ 22.75 billion) in 2017. The countryremains one of the highest spending and fastest growing advertising markets globally.India's advertising expenditure is expected to grow at 12.1%.
During FY 2017-18 we grew by 10% with revenues of Rs.298.24 crore vis--vis Rs.271.42crore in the previous year. As a result our EBITDA increased to Rs.97.09 crore in FY2017-18 from Rs.91.25 crore last year. The operating margins stood at 33% vis--vis 34%in FY 2016-17 with a 1% margin dip attributable to Phase III investments.
During FY 2017-18 we grew by 10% with revenues of Rs.298.24 crore vis--vis Rs.271.42crore in the previous year.
With the acquisition of Friends 91.9 FM our coverage has increased from 62% to 72% ofthe FM population (subject to MIB approvals).
(Source: IRS Q4 2012 Census 2011 & Radio City Extrapolation)
The net pro3t reported Rs.51.72 crore against Rs.36.66 crore reported last year a 41%escalation.
We continue to adhere to our strategy of widening our reach in this Phase of FM'sexpansion. Our aim is to be present across all relevant markets of the country to attractquality advertisers and thus sustain our leadership by reaching out to more audiences. Ourfocus on content innovation has paved the way to reinforce our leadership position acrossmarkets. We have a portfolio of 39 radio stations excluding the recently acquired Friends91.9 FM in Kolkata (subject to MIB approvals). This acquisition was done with a view to bepresent in the markets where Radio City is yet to make a difference. With thisacquisition our coverage has increased from 62% to 72% of the FM population (subject toMIB approvals) (Source: IRS Q4 2012 Census 2011 & Radio City Extrapolation). We arecon3dent that tying up with a brand like Friends FM' which has a strong local teamsupported by our national presence will bene3t us in creating EPS-accretive opportunities.The stations acquired under Phase III policy are operationalised and have startedcontributing to the revenue and also have achieved EBITDA breakeven in FY 2017-18 Q4. Ourpresence across Tier I II and III cities serves various national and local advertisers aswell as various sectors of the industry.
We also have a digital presence with 51 web radio stations present across 10 languageswith over 800 playlists and approximately 40 million streams. (Source: Lasopi & PurpleStream). We have our web presence across www.radiocity.in and hindi.radiocity.in. To makethe radio experience more experimental we launched VideoCity last year which offers arange of customised programmes comprising celebrity interviews viral videos live studiotraffic updates curated playlists and much more. We believe in understanding the choicesand preferences of our listeners and localising our content to suit listenership habits.This has helped us maintain leadership in several markets. We have been ranked No. 1 inMumbai Pune Ahmednagar Bengaluru Baroda Surat Jaipur Delhi Lucknow Nagpur VizagGorakhpur Hisar and Karnal (Source: AZ Research TG 12+ Period - March 18 WeeklyListenership). A recent research report commissioned by MBL entitled Power ofRadio' highlighted radio as having the second-highest ad-attention compared to all othermedia. Thus in terms of ad effectiveness radio ads were the second most-effective indriving purchase intent. Radio as a medium also turned out to be the most trusted andcredible information source with RJs being key in3uencers amongst their listeners.
After the success of Tamil Kannada and Telugu Cine Awards Radio City extended its IPinto Marathi Bhojpuri and Punjabi markets with cumulatively over 2 crore votes makingCine awards a grand hit amongst listeners. Radio City Freedom Awards 5.0 which honoursand celebrates the essence of independent music across genres and languages was executedwith 13 LIVE gigs in 10 languages across 8 cities and garnered 864 entries and 16000votes.
RADIO CITY TEAM
We believe that operational excellence is achieved through a continuous emphasis onprocesses research and best-in-class people practices. Our focus on people has ensuredthat we are one of the best places to work at across industries and the employer ofchoice in the media industry. We believe in building an experienced team which deliversindustry-leading performance. In order to improve the skill sets of our employees weconduct various training programmes and focus on developing talent for the radio industry.
We are helping build an empowered society through educational and vocational trainingto assist children associated with orphanages and blind schools gain sustainableemployment. In FY 2017-18 we contributed Rs.1.03 crore towards our CSR initiativesprimarily in the form of financial aid to organisations such as Happy Home and School forthe Blind and Saath Charitable Trust.
To further increase the penetration of radio in December 2017 the Cabinet gave itsapproval for the e-auction of Batch 3 of private FM radio Phase III. Under this batch theGovernment was expected to auction 683 radio frequencies in 236 smaller cities thusbecoming an alternative local medium with an increased listener base. The industry is alsoworking on implementing its own measurement across 21 cities pilots of which are expectedto begin in 2018.
Going with the brand philosophy Rag Rag Mein Daude City our strategy is to remain aslocal as possible across markets and also become the most in3uential FM network in thecountry. The radio industry is bound to see faster growth compared to the traditionalmedium for several years to come as it moves from its nascent stage to a more mature one.As a leader we expect to bene3t from this fast-paced growth and expand our market shareeven further. Before I conclude I would like to thank our advertisers shareholdersgovernment bankers and most importantly our Radio City team who have contributed to ourgrowth story. I am con3dent that Radio City will continue to deliver on stakeholderexpectations and live up to the trust reposed in it.