00:00Kumar Taurani, Managing Director at TIPS Music, going to speak to us about Q2 numbers.
00:05Welcome Mr. Taurani. I want to first ask you with regard to top line growth.
00:10It's been strong this, you know, this quarter in Q2. When I'm looking at the numbers, why or why?
00:16What's driving the growth here? Actually, you see, we are, we started this business in 88
00:25to acquiring film content, film music content. And from then till 2020, I consider it as my repertoire, as my catalogue.
00:34And actually that catalogue is doing really well. So that's, we are seeing over the last few years,
00:40if you see quarter on quarter basis or year on year basis, if you see.
00:44So that's really extremely doing well. So that's the reason, that's the main reason you can say.
00:52And what do you think is going to be the growth number like going towards FY26?
01:00So in the medium term to the long term, what's the kind of growth trajectory that you're going to be looking at?
01:07See last few years, we are committing our investors, we will grow 30% on top line.
01:12And earlier we used to say 15-20% on bottom line. But last year onwards, we have changed that.
01:18We say 30 top line, 30% but last year actually we did 66% pad.
01:24This year also we will do 30% top line and we will surplus 30%, maybe a little more we will do on pad.
01:32And next year also we are targeting and we are focusing on to achieve that targets.
01:38Okay. And where should margins be sir for you?
01:43Margins as I told you, 30% we will maintain and top line same 30% that's my target for next over at least 2-3 years.
01:54We will do that.
01:55And what gives you that confidence sir? Is it the pipeline? Is it the robustness of the business?
02:00What's giving you that confidence of 30% across the board?
02:04See, number one as I told you, my repertoire is really doing well.
02:08Plus yes, we have a quality new releases we have acquired for next year.
02:13So we will achieve, we'll have those as well with us.
02:17Plus I feel key, we have our, and if you see ours overall, our business is growing.
02:24Everybody's listening music and music is in your hand now.
02:28You have mobile phone, whenever you remember any song, you can immediately hear that song.
02:34Plus all these platforms, OTT platforms, they are pushing their services for paid subscription service.
02:40So I think that will also be a big advantage to the industry and I'm part of it.
02:45So it will directly or indirectly benefit comes to us also.
02:49And so, you know, just in general, the industry as a whole has been shifting more towards quality than quantity.
02:58You've been doing a good part of both.
03:01What is it that's getting you to do it right? And is that sustainable?
03:06Let's see. I think time will tell. So far we have achieved our targets and we have achieved whatever we have said.
03:15God is really kind on us. So hope we will continue performing and doing well.
03:21And what's the release and what's the launch looking like for FY25 as well as what's the goal for FY26 in terms of launches?
03:30We have actually two films. Actually, we have another advantage.
03:35We have our own company, Tips Films, which produces and makes films and their content we acquire at absolutely arm's length.
03:44And we have a proper policy for that, how we look at it.
03:47So we were supposed to release their two music this year.
03:51One film was in Punjabi Sarbala and there was another film in Hindi, Malik, Rajkumar Rao starring in that.
03:58And in Sarbala, Kipi Grewal, Amy Sargun, four big actors of Punjab are participating.
04:04So we were supposed to release this year, but they have shifted to the next year.
04:08Music release, I feel. They are not coming this year.
04:11But we have a few other films and other non-film music, a lot of non-film music this year.
04:17So we are concentrating on that. And next year we have a full of new releases. Many films we have.
04:25And so how is revenue shaping up for you?
04:28What comes from the release itself in terms of music and how much comes from digital channels, YouTube, Spotify and the like?
04:36See, overall, if you see digital, digital is 75% contribute to our earnings and rest 25% comes from public performance, publishing and this TV broadcasting and all that other revenues.
04:51There are sync rights also there. Anybody, any ad company or any consumer product company or a producer or a web series show needs my song clips to sync in the program.
05:03They take rights from us. So these are the three, four models we have.
05:09You also tied up with Warner. Talk to us about that tie up, what it entails and what's the revenue expected to come in from there?
05:20Because you're guiding for a 30% growth, of course, your 250 crore top line should go to 325 crore, maybe FY25 end.
05:28But how much of that from this tie up and how much organic growth?
05:33See, Warner, actually we tied up with Warner around four years back.
05:40And first our license was with them for three and a half years, which expired in March.
05:47And that time we given them only international players to do business, to distribute our content and Hindi content only on three major apps, Apple, Amazon and Spotify.
06:00Plus, there is a small, small apps, many apps in international markets to do business with them.
06:08But now and last year, in last year, last quarter of last year, we have again started our discussions and we have formalized a deal in March, last week of March.
06:21For next four years, we have done a deal with them for four years.
06:27And we've given them entire OTT, all platforms to them to do business, including our regional catalog, entire library of tips music.
06:37And whatever we have taken, some MG and above MG profits will be 15% for them, 85% for me.
06:46And whatever monies they are giving me, we keeping as an advance in our books and whatever actual business is happening.
06:54And we are, we are taking that quarter wise, that business in our books.
06:59So that is the arrangement with Warner.
07:02So also you have a very lean balance sheet, right?
07:05When you're looking at the incremental borrowing that you're taking, it's nearly zero.
07:11You know, you're profitable, of course, cash flow positive, you're doing 30% on growth.
07:17So cash flows continue to come through.
07:19In fact, on your, just for viewer perspective, on a 240 crore, roughly top line, you're doing almost 120 crores on bottom line.
07:29So where are you investing the money that's coming in?
07:33See, one of the best policy of tips is we write off our entire content cost in same quarter.
07:39Okay.
07:40We don't delay, we will write off in many years.
07:44But we, same quarter we do and we do this practice since beginning.
07:48So, and this cash component and actually our, you are absolutely right.
07:53Our business is a very, very cash business.
07:56So we don't need money.
07:58So that's why we give whatever surplus monies are to the investors.
08:03We give, I think, whatever we, what we are thinking is to give entirely last year's profit.
08:12Whatever we earned in 2024, we should give as a dividend or a buyback this year.
08:17And we are already given this, this year we already given 97, 52 and 47.
08:2499 crores we have already given, including this last quarter, we have committed to give 2 rupees per share, which is in process.
08:31It will go soon.
08:33And so our target is that we will give surplus cash to our investors.
08:40Got it.
08:41Very interesting.
08:42So pretty much all the cash coming straight to investors.
08:45But thank you so much, Mr. Torani, for giving us all of that perspective with regard to tips, music and the business there.
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