Netwrk.18 Media Q1 FY27 Results (NSE: NETWORK18)
Signal: Loss narrowed
The read
Revenue inflection to positive YoY growth (+10.3%) is encouraging after six quarters of decline, but the operating structure remains deeply loss-making: EBITDA margin of 2.3% is up sharply from a year ago (negative base) but reflects continued high employee costs (40.4% of revenue) and finance costs (11% of revenue) that overwhelm gross operating profits. The business is still burning cash at the net level (PAT -₹38.71 Cr) despite a steady ₹37-38 Cr quarterly contribution from associates/JV (primarily BookMyShow). The QoQ revenue collapse (-75.7%) is seasonal and temporary; the real concern is that even in a Q1 with no exceptional items, the core media operations (consolidated pre-associate loss of ₹76 Cr) are far from breakeven.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹516.26 Cr | +10.3% | -75.7% |
| EBIT | ₹-19.42 Cr | +2.0% | |
| Net profit | ₹-38.71 Cr | -126.2% | |
| EPS | ₹-0.25 | -74.2% | |
| EBIT margin | 2.3% |
P&L walk
Revenue grew YoY for the second straight quarter (+10.3%) after six consecutive YoY declines, but QoQ plunged -75.7% — a typical seasonality in Q1 (post general elections/Q4). PAT swung from +₹148.03 Cr (Q1FY25, which included a ₹150.64 Cr exceptional gain on ETPL deconsolidation) to -₹38.71 Cr; excluding that one-off, the underlying loss widened versus a loss of ~₹1.79 Cr before tax and exceptional in Q1FY25. EBITDA margin contracted sharply QoQ from Q4's 5% to 2.3%, though improved from -15.9% a year ago (Q1FY25 standalone OPM was negative, but consolidated OPM that quarter was 15.9% due to exceptional/other income — here, base effect is misleading).
Key positives
- Consolidated revenue returned to YoY growth (+10.3%) after six consecutive quarters of decline (Q1FY25: -85.1% to Q4FY26: +9.8%), driven by higher TV and digital ad/sponsorship revenue.
- Consolidated EBITDA margin improved to 2.3% from -15.9% a year ago (Q1FY25 standalone OPM was deeply negative; the consolidated figure on a like-for-like basis is not strictly comparable due to the ETPL deconsolidation, but the direction is upward).
- Associate/JV profit contribution remained steady at ₹37.74 Cr (vs ₹70.32 Cr in Q1FY25, which included a one-off gain) — BookMyShow continues to generate reliable earnings.
- No exceptional items in Q1FY27 compared to ₹150.64 Cr gain in Q1FY25 and ₹12.13 Cr charge in Q4FY26 — earnings quality is cleaner this quarter.
Key concerns
- Consolidated PAT of -₹38.71 Cr, swinging from +₹148.03 Cr a year ago (which included an exceptional gain); underlying operating loss before associate/share of JV widened to -₹76.10 Cr from -₹72.11 Cr in Q1FY25.
- Employee benefits expense grew +12.2% YoY against revenue growth of +10.3%, pushing employee cost to 40.4% of revenue — a structural drag on margins.
- Finance costs at ₹56.68 Cr (11% of revenue) remain elevated, with debt service coverage at 0.28x — interest coverage is thin (EBITDA before finance costs = ₹11.63 Cr vs finance costs = ₹56.68 Cr).
- Standalone loss of -₹77.92 Cr worsened from -₹70.84 Cr a year ago, and was further hit by an exceptional charge of ₹11.75 Cr (Labour Code wage adjustment).
- QoQ revenue dropped -75.7% — while seasonal, it underscores the dependency on the high-revenue March quarter (general elections/IPL/ year-end advertising).
Research and educational content only. Not investment advice.