Thank you. Good evening, ladies and gentlemen.

I welcome you to the Q1 FY '27 earnings conference call of Tips Music Limited. To discuss this quarter's performance, we have from the management Mr.

Kumar Taurani, Chairman and Managing Director; Mr. Girish Taurani, Executive Director; and Mr.

Sushant Dalmia, Chief Financial Officer. Before we proceed with the call, I would like to mention that some of the statements made in the today's call may be forward-looking in nature and may involve risk and uncertainties.

For more details, kindly refer to the investor presentation and other filings that can be found on the company's website. Without further ado, I would like to hand over the call to the management for their opening remarks, and then we can open the floor for the Q&A.

Thank you, and over to you, sir.

Good evening everyone, and welcome to Tips Music Limited's Q1 FY '27 earnings call. Thank you for joining us today and for your continued trust in the company.

Our catalog and new releases are doing very well. As a result, our growth as well as engagement has improved across all platforms.

Your company has announced a separate board meeting to consider buyback of shares on 5th August 2026. As stated earlier, we remain committed to distribute last year's PAT, that is ₹217 crores, this year in form of dividends and buyback.

With that, I would now like to invite Girish to share his perspective on the quarter. Over to you, Girish.

Thank you, Kumar. Good evening, everyone.

I am pleased to share that we delivered a strong quarter with healthy contributions both digital and non-digital segments. During Q1 FY '27, we released 73 songs, including 55 film songs and 18 non-film songs.

Our key releases, Ishq Vishk Rebound and [unclear] aaunga, received an encouraging response from the audiences. The album Ishq Vishk Rebound crossed 186 million views on YouTube, while its most popular track, Soni Soni, crossed 70 million views.

Similarly, the music album [unclear] achieved nearly 100 million YouTube views, with female versions of [unclear] witnessing strong traction on Spotify. Tere Liye from the movie Prince secured a position among the top 10 songs on Spotify's daily charts, highlighting the enduring appeal of our music library and its catalog.

Further strengthening our digital footprint, our cumulative YouTube subscriber base increased to 158.3 million, reflecting sustained audience engagement and the growing reach of our content across platforms. I will now be handing over the call to Sushant to take you through the financial performance in detail.

Thank you, everybody.

Thanks, Girish, and welcome everyone to the Q1 FY '27 earnings call. I'm pleased to present the key financial highlights for the quarter.

Revenue for Q1 FY '27 stood at ₹106.51 crores, reflecting a 21% Y-o-Y growth. Content cost increased by 90% Y-o-Y, driven by our new releases.

Please note that as per our conservative accounting policy, we have expensed the entire content cost of the new releases in this quarter, while the corresponding revenue started coming from mid-month of May only. Profit after tax amounted to ₹43.89 crores, reporting a 4% degrowth compared to Q1 FY '26.

With this, I conclude my opening remarks and open the floor for Q&A.

Thank you for taking my question. My question is on basically the content cost.

Basically, as also you are for last quarter, you are saying that around 80 to 90 crore of content we have acquired for the whole year, but we see that on this quarter, like Q1, your total content cost is around 40 crores. Do we still expect is there any increase in a content cost in going onward next quarters, or do we still maintain the 80, 90 crore of content cost?

Sushant?

Akshay, the overall content budget for the year would be in that range of 90 to 100 crore, reflecting our continued commitment to building strong content library. We have a robust new release pipeline also for the year that includes, let's say, music from Balaji Telefilms, music from Tips Films, and other, let's say, regional and non-film music releases also.

We are also pleased to report that the content released in Q1 has performed exceptionally well, reinforcing our confidence in the strength of this pipeline.

Got it. My second question is on basically as we see that the paid music subscription has been continually growing in India.

Do you expect that subscription revenue becomes a larger contribution than advertising-led revenue? What will be the mix over a 3 to 5 years horizon with how much is for subscription-based and advertisement-based revenue?

If you could give a percentage-wise for this quarter also, how much is for subscription-based revenue and advertisement-led this?

Akshay, subscription-based revenue across platform on an average is currently, let's say, 10% to 15%. Let's say, if you see globally, subscription is the main driver.

More than 50% of the revenue comes from subscription. In India also, we see that percentage moving ahead over the next 3 to 5 years, and most of the platforms, be it Spotify, YouTube, or other platforms, they're pushing more towards subscription.

Going ahead, let's say, we see a healthy growth and the paid subscribers are also growing, let's say, in the range of 40% to 50% CAGR.

Okay. My question is on basically EBITDA margin.

If we check the historically also, we have maintained around 65% to 70% of EBITDA margin on normalized level for full year basis. Due to a larger portion of content cost, this year around 40% we have EBITDA margin.

Do we expect any structural lower margin in the next quarter or going forward, or it will be a range around 65% to 70%?

Akshay, let's say, for EBITDA margin, you have to look on an annual basis. Quarterly, there could be aberrations due to content releases, but on an average, let's say, on an annual basis also, it would be in that range, what you said, that 65% to 70%.

Annually basis, we have maintained the 65% to 70% margin, correct?

Yes, yes, yes.

Okay.

It would be in that range,

yeah. Okay.

Thank you. That's it from my side.

Thanks for the opportunity. One of the questions has got answered.

I have a couple of questions. Can you comment on the pipeline of the film-based songs in Q2 specifically?

That is my first question.

Q2 specifically, I can't comment, but, let's say, over this year, as I said in my earlier answers, let's say, there are releases from music from movie from Balaji Telefilms, a couple of them from Tips Films, and, let's say, a healthy slate of both regional and non-film music. Again, it would depend on how the movie release gets scheduled, but this is, let's say, the tentative pipeline.

How many film songs it would be? How many number of films are there for this year?

At least five let's say, yeah, at least five of them. See how, let's say, the movie gets schedule gets released, but we tentatively you can take around five movies.

Yeah. Secondly, global music labels earn 50 to 90 paisa, as per your presentation, per stream, whereas the labels in India, they are earning 4 to 10 paisa per stream.

What explains this gap? Do you see some kind of convergence happening there?

Sagar, it's primarily, let's say, the subscription, that is a gap. Globally, let's say, the subscription price is also higher, and the subscription percentage is also higher, that is around 50% to 60%.

India, let's say, currently the subscription price is also lower, and the overall percentage to its call revenue is around that 15%. That's primarily the gap.

Any other player taking the price hike apart from Spotify, what they have taken last year? See,

last year to the end of the last calendar, let's say, Spotify, YouTube have taken the price hike. As of now, no one has taken it, but, let's say, we think there could be something in the pipeline, but difficult to comment on.

Thank you so much.

Thank you. My question is more around what sort of guidance are we working on in terms of the revenue?

Secondly, on the buyback, how are we placed? Have we just moved the agenda from today to the date in August?

Saket, we continue to maintain our 20% revenue guidance and PAT guidance. On the buyback, the board would like to also evaluate the open market linked buyback, which becomes effective from 1st August, and therefore, let's say, the board meeting for buyback got rescheduled to 5th August.

Okay. Understood.

Thank you, and all the best to the team.

Thanks.

Thank you. Kumar Taurani, again you have delivered very good numbers.

Can you bifurcate content cost of Ishq Vishk Rebound and [unclear] aaunga, how much cost we had paid?

See, we can't reveal that figure. That's a confidential.

Sorry, we can't do that. We can't tell you that because it's a competitive market, we can't do that.

Understand. Or can you tell how much content cost towards film song and non-film song in this quarter one?

Mostly it's a film music. Yeah.

How much cash we are having on 30th June?

A lot of cash we are having. Sushant, can you tell us, please?

Sure.

Ravi, it's around ₹345 crores as on 30th June.

The buyback we will do for 100 and something crore?

See, we don't know how much that exchanges and SEBI is allowing. Let us see.

First unka policy aa jane dijiye, fir uske hisaab se jo maximum hoga, we'll do that.

Okay. Sir, next release you tell Balaji Telefilms will come.

If you want to defer buying back next date, why you announce in today meeting? Because momentum of share prices have vanished like anything.

Agar

humko aaj nahi karna tha to humne kyu diya aisa agenda?

Ravi, let's say, the board wanted to evaluate the open market buyback also, and that is effective 1st August. The board decided let's do it on 5th August and evaluate both the options, open market or tender offer, and then accordingly decide.

We have communicated clearly that this is just been deferred by few days. The buyback option will be taken at the board meeting of 5th August.

Kumar, can you tell this thing, Ishq Vishk Rebound, we have recovered the cost whatever we have [unclear]?

Ravi, if you check your earlier communication with you all, humne hamesha bola hai ki jo content cost ka jo recovery hai, ek-do mahine me nahi hota hai. Wo 4 se 5 saal lag jaate hain.

Mai to ye keh

raha hu picture ka jo

cost hai wo recover ho gaya kya? Haan, picture ka cost mere khyal se ho jaega, kyunki abhi bhi satellite se, OTT se paise aane baki hain.

Humare ko abhi bhi jo accounting hai abhi bhi chalu hai. To accounting me bhi abhi 5 June ko picture lagi hai, to usko dedh-do mahina complete cycle ko hone ko lagta hai.

It will take little more time, next 15-20 days me. More or less, we are through.

Ek humare ko isme picture me bohot bada advantage tha ki we have shot this film in London. To London me bohot accha subsidy bhi hai, to we are getting moneys from there also.

I think we will make some money on this film.

Really, you have made a very fantastic movie. I saw in movie theater at least three

times, and

I enjoy it. Yes, sir, carry on.

Thank you. Thank you.

Thank you.

Hi, sir. Thanks for the opportunity.

Sir, just one thing on the growth. While we witness steady top-line growth for this quarter about 21% Y-o-Y, but this was also a quarter with two movie releases.

If I look at FY '26, despite no major movie releases, the top-line growth was 20% plus. What explains the slightly soft growth this time, 2% Q-o-Q, despite having new releases, two releases, both the movies we had this quarter?

I know we do not break down revenue details, but would it be great to get some color directionally? Did you see some relative weakness on the digital side, non-digital?

Last quarter was pretty strong at 32% Y-o-Y. Any color, any explanation here would be great.

Sushant, you

go. Kavish, let's say, this songs, let's say, got released, let's say, during the mid-month of May and during the June month only.

The full revenue impact is not there this quarter, and you will start seeing the full impact from Q2 onwards. I won't be able to comment on the digital, non-digital piece separately, but, let's say, if you see the presentation, the digital segment has contributed around 75%.

That's healthy for us. As the year, let's say, quarter passes on, you will see that number growing both digital and non-digital.

Sure. Thank you.

All the best.

Thank you.

Hi team. Am I audible?

Yes.

Hello. Hi, sir.

Very good evening. A couple of questions from my side.

Sir, I am referring to page number six of our investor presentation in which it is mentioned that the industry is expected to grow at 8%, whereas subscription revenue is expected to grow at 40% to 50%, assuming 10% to 15% of the overall revenue for the industry coming from subscribers. Sir, that translates to around all the growth coming from the subscription basis, right?

Sir, what could be the realistic numbers that you think the industry could be growing at in the future? Would love to know your thoughts on that.

Yash, let's say, the industry, let's say, as per the various industry reports, I can only say that the growth is in single digit for this year. Let's say, for us, we are seeing a strong traction and we continue to maintain our guidance of 20% growth.

Sushant, I get that point, right? Let's say if 15% of the overall pie is expected to grow at 50%, there must be something which is dragging down or not growing in the overall pie, right?

That the industry is growing at single digit. Since overall the tailwinds that we are facing is on the industry level, right?

How is it possible? Just wanted to get more color on that.

Yash, let's say, it all depends on the content. For us, let's say, the content is doing well, our catalog is doing well, you see a higher growth rate at least for us.

On the industry front, it would be difficult to comment.

Okay. Fine, Sushant.

That's right. Just a few pages after that, it is mentioned that Spotify is targeting around 15 crore potential users in India, right?

Even assuming ₹1,000 per person spend, that would translate to ₹15,000 crores. Of course, not in few years, but let's say in the medium term, probably 5, 7 years down the line, and even if 50% flows through to the music labels, that would translate to somewhere around 7 to ₹8,000 crores of revenue pool for the overall music label.

Would that be the right way to look at it?

Absolutely. Yes.

Perfect. That is great.

My another question is that Spotify had revised his subscription prices in mid-May negatively. Do we expect any impact of that in our revenue going forward?

Yes,

yes. Revenue will That's not a material impact on

That won't have a material impact. Got it, sir.

Sir, what could be the update on the YouTube Shorts renewal deal, which was supposed to happen in June or July this year?

YouTube Shorts, let's say, the negotiations are still going on, and probably will update you by end of Q2.

Okay. Perfect, sir.

My last question is that earlier you mentioned that we are still holding on to our guidance of 20% revenue growth and 20% PAT growth, with content acquisition cost to be in the range of 85 to ₹90 crores. Is that correct?

That's true.

Perfect, sir. Thank you so much and wish you

That's true. This year's.

Thank you.

Thanks for the opportunity. My first question is that I am able to see that there is a additional 4,000 music library added, which used to be around 34,000 to 38,000.

Is there one-off or a separate buyout that we have taken in this particular quarter, which has included to our content cost?

Chirag, last year we had acquired Gujarati catalog. Let's say, by end of Q4, we had digitized the thing and that's get added to the library.

That had around 4,000 songs.

Got it. Second thing, I wanted to understand related to if there is any kind of an exclusivity we have with some artist for the non-film songs specifically.

Does this industry functions in this way, or no one can have a particular exclusivity in this particular industry?

Chirag, actually we don't

We don't have

Sushant, go on.

Chirag, let's say, we are not there into that artist management business. We have focused primarily on the music content business.

We don't have any specific exclusivity with any of the major artists.

Got it.

We are signing major artists, but we are doing a deal for one song, two songs, three songs. Song-wise deals we are doing.

Fair enough. Just one last question from my side.

Just wanted to understand, a lot of large players in this industry are getting entered from the international markets. They would have ample amount of money to spend or to acquire songs.

Does this additional number of players or the ability for peers to spend huge amount of money towards the content, is it impacting the industry in a way that content acquisition cost in the industry is going up compared to what it is 5 years back? Down the line, our focus would be that the mid-level we don't try to compete in the upper bandwidth, still will face some kind of a competitive intensity leading to slightly higher cost than whatever we are spending today.

Sir, you want to take it?

Chalo. I think, I feel it won't create any impact on us because we have a relationship in place and we also create a lot of our own music.

Now in this forthcoming film, we are providing music to the film companies. That is really a strong point only Tips has at present.

I don't feel we will have any competition. We will, touch wood, survive better than everyone else.

Got it. Fair enough.

Thank you, sir.

Thank you.

Hi, sir. Good set.

Sir, a couple of questions. Firstly, there were some news around some stake sale or purchases.

Would you like to comment anything?

Sushant?

There's nothing, no stake sale or anything from, let's say, the promoters' end. There are various news which floats around in terms of the stake sale on a quarterly basis, but nothing as of now or in pipeline.

Just wanted a broad perspective, even if, I understand, promoters are currently not looking to exit the company. Is there anything strategically we are looking for, like to partner with some other player, maybe in the industry, maybe internationally, in such a way that is beneficial for the company as a whole?

That's more of a view that I was looking to get from the promoters. I understand that obviously no one wants to sell.

We already have a partner.

Go on.

We already have partnership. Let's say we are the only one who have the partnership, let's say, with Warner Music as a distributor, Sony Music Publishing as our distributor.

Let's say we are the only one in terms of the larger labels who have such partnerships.

Got that. Nothing strategically we are looking to get investment in the company.

Great. Secondly, after exit from Mr.

Hari Nair, are we looking for someone else, and what are the plans?

Sir, you want to take it?

Actually we are searching for a right candidate, but at present Sushant and Girish is handling very well business as usual. We are looking for one person.

I think in our industry, if you see, there are very less people for that post. Soon we'll get someone and definitely we need that position.

We will definitely appoint someone soon. Definitely, because

I think he was actively working on getting us deals through various channel partners as well. I hope we get someone who can help us on a broader way.

Anything we're hearing on TikTok, or in the sense, good monetization from YouTube Shorts or something?

YouTube Shorts is still we are discussing with

Let's say

Sushant, go on.

YouTube Shorts deal is under negotiation, give us a quarter. We'll provide more color on it.

Second, let's say, in terms of, let's say, newer platform, let's say Amazon Music has started. It's three-tier structure and for non-Prime members.

That's quite positive news for the industry.

Great. I think YouTube Shorts is long awaited now, it's time that we get through something.

Yeah. Great.

Good one. Good set.

I hope market also understands that the company's content cost heavy in this quarter. It will normalize over the year.

That's true.

Thank you. All the best.

Thank you. Am I audible?

Yes.

Yes, you're audible.

Yeah. If I look at the content cost for FY '26 and the number of songs released, and the same for this quarter, the content cost per song has gone up around 4x.

Any particular reason for that, or how should we look at this number?

Shirish, let's say, this quarter the releases were primarily film music. Overall, let's say, they are much more expensive.

Let's say, last year, it was primarily non-film and regional music. That way, let's say, comparison of, let's say, cost on a per-song basis won't be the right metric.

Understood. Understood.

Thank you. That's all from my side.

Hello. My question was regarding employee cost.

Even though we saw a 50% increase last year in employee cost, this quarter, too, we have seen a 30% increase in it. Is that the sustainable growth rate which is going to be there in the near future?

That's my first question.

Jenil, on the employee cost, let's say, in December quarter, due to the change in the labor code, we have moved few of the full-time consultants on the payroll. Let's say, your other expenses have come down and the employee costs you see have increased.

Netting both against each other, there is no impact on the profit. Going ahead, let's say, the employee cost would be in a similar range as the first quarter.

For the full year?

Sorry?

For the full year, it will be around this

Yes. This quarterly run rate would be there.

The second question was regarding the YouTube Shorts deal, which was supposed to happen in Q1 or Q2. Is there any update on that?

As mentioned earlier, this is still under negotiations, and let's say we'll update at the end of Q2.

Okay. Another question I had was regarding how much market share would Spotify hold in our revenue or something?

Revenue share, how much would Spotify hold? Is there any problem due to an overdependence on a single app or platform which might affect our revenues too?

Yeah. See,

let's say, we don't give bifurcation platform-wise in terms of revenue share because these are competitive data points. Let's say, in terms of your second question, we don't feel impact of, let's say, fewer platforms because at the end of the day, they also require the content, and, let's say, it's the music labels which provide content to them.

It's a win-win situation for both the platform and for us also.

Nothing more from my side, sir. Thank you.

Hello. Am I audible?

Yes.

Yes.

Yeah. Thank you, sir, for the opportunity.

My question is regarding EBITDA margin. Due to higher content charges, EBITDA margin is little bit hit this quarter.

What are your view on going forward? Should we recover in the range of 74 around, or what was the sustainable margin for full year FY '27 and going forward?

Shweta, on an annual basis, the EBITDA margins would be in the range of 65% to 70%. You can take that assumption.

Okay. Sir, what are our view on content charge for full year basis and next 2, 3 years?

This year, we are looking at around, let's say, around that 90 to 100 crores. This also depends on that movie release schedule.

Over a longer term, it would be in that range of percentage to revenue, that is 20% to 25%.

Okay. Thank you so much, sir.

That's all from my side. Thank you.

Thank you for the opportunity again. Sir, one question I would want to know is if I bifurcate our music library into some old songs and new songs, let's say 5 to 6 years are the new songs, and rest are the old songs, is it possible for you to just give me a bifurcation of revenue, what percentage of revenue comes from the new songs and the old songs?

Chirag, in terms of, let's say, new songs, we get approximately 15% of our revenue from the content which are released over the last 3 years, and the balance 85% is spread across, let's say, the past three decades.

Got it. Secondly, I wanted to know, like you said that our policy for the content acquisition is around we like to spend about 20% to 25% of the revenue.

Is this a particular mark or it's more driven by the actual content get released? For example, if I see a period of last 3 years, the movie released compared to a decade back, let's say 2017, '16, which was in the range of 1,400 movies in a year, it fell down to about 1,000.

That was the reason we were spending a little less. Now if I'm able to see the pipeline of movies coming in this particular year, is it possible that the cost can go up based on the quality of content coming and your capability to spend on the quality content which is the right one, this can actually go up?

It is not an actual mark that you want to keep.

Chirag, primarily we have kept this as a budget of 20% to 25%. Let's say, our dependency on the outside, let's say, production houses is also limited.

One-third of our content comes from outside production houses, one-third comes from Tips Films, and one-third we do non-film. That way, let's say, our dependency on outside production houses is limited.

Another thing is primarily, let's say, on the quality front, let's say, we have a good A&R team in place, which ensures good quality music comes to us. In some years, if we want, let's say, we can exceed 1% or 2%, let's say 25% can become up to 30%, but it would strictly be on the quality of the content which we're getting.

Anyway, there are no pressure as such. There's enough content available in the market.

Fair enough.

Fair enough. This was just linked to the content only.

The cash distribution policy is dependent on the profits we earn, or is it dependent on the war chest money that we are keeping aside? Apart from that, whatever money we have, we are willing to distribute as dividends or buyback?

It's primarily linked to our revenue rather than anything else. Let's say we strictly link our content budgets to the revenue what we earn.

No, I was talking about the cash policy. Content policy you've specified related to revenue.

Cash would be, let's say, yeah. Cash, let's say, we have stated earlier also, whatever we are earning PAT of last year, we'll distribute that this year in form of dividends and buyback.

Got it. No, fair enough.

Thank you so much, sir.

Yeah. Sir, I think the questions have been asked already quite well.

I just wanted to understand one small thing here. The content cost here was almost 45 crores, and we had only 73 new releases, which takes it to almost some 61 lakhs per song.

Is this a right way to see this, because on an average last year, it was around 15 lakhs per song? Is the overall cost going up, or is it just the kind of songs that we took this time were slightly higher cost?

Small small question.

Shrenik, let's say, this quarter, let's say, it was primarily film music as compared to non-film music last year and regional music last year. That's the difference.

As stated earlier, comparing, let's say, cost per song won't be the right metric. Okay.

It's not a general trend that the cost is going up in general or so sharply between the previous year and this year?

We are very conservative, let's say, in terms of our acquisitions. We don't enter into any bidding war.

Let's say, our content policy is also divided well, let's say one-third from Tips Films, one-third from outside production houses, and one-third we do it internally. That way, let's say, there is no significant cost pressure we face.

Okay. Congratulations again for a good set of results.

Thank you.

Thanks. Thanks, Shrenik.

I would like to thank the management for taking their time out for this conference call today, and also thank all the participants. If you have any queries, please feel free to contact us.

We are SGA, Strategic Growth Advisors Private Limited, Investor Relation Advisors for Tips Music Limited. Thank you so much.

Thank you.

Thank you.

Thanks, everyone.