The Sandesh Limited

TSL’s total operating income (TOI) declined by around 5% in FY24 Y-o-Y, mainly considering decline in advertising revenue on a higher base of FY23. Advertising revenue constitutes around 70% of its TOI and balance is contributed by newspaper subscription revenue. In FY23, the company earned higher advertising revenue considering Gujarat state assembly election. However, due to 1Complete definition of ratings assigned are available at www.careedge.in and other CARE Ratings Limited’s publications.

TSL was promoted by the late Chimanbhai Patel more than seven decades ago and is now being managed by the next generation promoters. Over time, TSL has evolved itself as one of the prominent print media players in Gujarat. Liquidity: Strong TSL’s strong liquidity is marked by NIL utilisation of its fund-based working capital limit in last 12 months ended June 30, 2024, aided by healthy cash flow from operations. With NIL leverage, TSL has sufficient gearing headroom to raise debt, if required .

TSL’s strong liquidity is marked by NIL utilisation of its fund-based working capital limit in last 12 months ended June 30, 2024, aided by healthy cash flow from operations. With NIL leverage, TSL has sufficient gearing headroom to raise debt, if required . TSL’s healthy unencumbered liquid investment portfolio of ₹817 crore as on March 31, 2024, also strengthens its liquidity.

Unlike many large print media companies having presence in multiple states and languages across the country, since its incorporation, TSL has focused only on the local market of Gujarat. This has restricted its scale to a moderate level. However, it has established itself as one of the leading print media players in Gujarat. Upon entry of Divya Bhaskar in the Gujarati print media, the existing market share of TSL and Gujarat Samachar reduced to some extent, and since then, there has been intense

India’s print media industry is facing headwinds due to declining circulation. Newspaper circulation in India has declined by ~6.3% in last seven years ended FY23 (Source: Press India Annual Report from Ministry of Information and Broadcast). Shift in consumer preference towards digital media especially post COVID-19 is leading the decline in newspaper circulation. TSL’s circulation has also declined in last few years. However, CARE Ratings expects this to continue to have a decent readership s

Newsprint constitutes TSL’s key raw material. It procures newsprint through a mix of local suppliers and imports. in FY24, TSL largely procured its newsprint requirement from overseas market. The average cost of TSL’s newsprint consumption declined from ₹60,669 per MT in FY23 to ₹56,114 per MT in FY24, which further moderated to ₹47,987 per MT in Q1FY25. Although the company witnessed some increase in newsprint prices in near term, unprecedented increase in the newsprint prices going forward

The advertisement revenue remains vulnerable to factors such as readership base of the newspaper, market competition -led advertisement-rate movements, and the level of economic activity in general. High inflationary environment and volatility in commodity prices could cause businesses to trim the advertisement spending to offset rising costs in their operations, which could thus impact TSL’s advertisement revenues. 2 CARE Ratings Ltd.