CRISIL – Indian print media revenue to grow 20% in FY 22-23

Profitability of print media impacted by higher raw material prices

Indian news media in print| print media
Indian print news media in recovery mode

The financial press has reported that a recent CRISIL Rating report expects the Indian print media’s topline to bounce back in the next financial year by about 20% despite challenges such as high newsprint prices. The report is clear that this growth is likely to be on the low base of the 2021-2022 financial year.

It expects both circulation and advertising revenues to recover to approximately Rs. 27,000 in FY 2022-23, from the dismal Rs 18,600 crore in FY 2021-22. Moreover, the industry is not likely to reach its pre-pandemic high of Rs 32,000 crore for several years.

With the Indian economy recovering, ad revenues for print media are expected to increase by about 25% over the previous year. The report says that subscription revenues are likely to come back by 30% but that there is some long-term erosion of customers shifting to digital media.

Profitability is forecast to be impacted by 300 to 350 basis points (3 to 3.5%) by the high newsprint prices that other sources tell us are currently prevailing in the US$ 1,000 to US$ 1,200 range. According to the analysis of print media companies rated by CRISIL, the higher newsprint prices take away as much as 40% of the sector’s revenues although they represent about 30 to 35% of its costs. The operating margin of print media companies is projected to be 6 to 6.5% in FY 2022-23, in comparison to the previous financial year’s margins of 9 to 9.5% according to the research.

Possible challenges include a continued rise in raw material prices instead of a leveling-off after a couple of quarters or other unforeseen global events. CRISIL expects smaller media organizations to be more vulnerable because of the rising raw material prices. It said, “While the credit risk profiles of large print media companies will be cushioned by healthy liquidity and strong balance sheets – most of them are net debt-free – liquidity management will be crucial for the smaller ones because of the rise in newsprint prices, as their interest cover is estimated to be 2 to 2.5 times as on 31 March 2022.”

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Indian Printer and Publisher’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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