Summary
Shemaroo Entertainment Limited - Q3 FY2026 Earnings Call Summary Friday, January 30, 2026 12:00 PM IST
Event Participants
Executives 3 Amit Haria (CFO), Arghya Chakravarty (COO), Hiren Gada (CEO)
Analysts 5 Aryan (Individual Investor), Devansh (Internal Cap), Harshit Mishra (Individual Investor), Hetvi Shah (Individual Investor), Yajat Shah (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹161 crores | -2% YoY; Growth in digital business negated by pressure in traditional segments. |
| EBITDA | (₹67 crores) | Loss; Impacted by ₹34 crore investment in new initiatives and accelerated inventory charge-offs. |
| Net Profit/Loss | (₹55 crores) | Net loss reflects ongoing strategic inventory write-offs and soft advertising environment. |
| Digital Media Revenue | ₹81 crores | +14% YoY; Driven by sustained engagement across YouTube and ShemarooMe platforms. |
| Traditional Media Revenue | ₹80 crores | -14% YoY; Headwinds from big broadcasters re-entering Free Dish and soft FMCG ad-spend. |
| Inventory | ₹417 crores | Decr. from ₹727 crores in Dec FY24; Strategic reduction to lighten the balance sheet. |
| Debt | ₹310 crores | Increased from ₹295 crores in H1 FY26 due to operational losses and working capital needs. |
Geographic & Segment Commentary
Digital Media: Revenue grew 14% YoY to ₹81 crores, now constituting roughly 50% of total revenue. YouTube engagement remains high with Shemaroo Filmi Gaane reaching 74 million subscribers and the total portfolio garnering 9.5 billion views in Q3. The company is focusing on strengthening OTT offerings, specifically ShemarooMe Gujarati and Hindi original content.
Traditional Media: Revenue declined 14% YoY to ₹80 crores due to structural shifts and competitive intensity on the Free Dish platform. The re-entry of major GEC broadcasters and a sports-heavy calendar diverted advertising budgets. Management noted that while viewership shares have stabilized and partially recovered, the segment remains under pressure.
Company-Specific & Strategic Commentary
Inventory Rationalization: The company is in the eighth quarter of a strategic accelerated inventory charge-off exercise, reducing inventory from ₹727 crores to ₹417 crores over two years. Management expects this accounting-led transition to conclude by Q4 FY26, which will result in a cleaner P&L starting FY27 without impacting physical monetization of titles like “Jab We Met” or “Golmaal.”
Shemaroo Josh Rebranding: Formerly Chumbak TV, the channel was rebranded to Shemaroo Josh on September 1, 2025, pivoting from kids/youth content to a full-fledged movie channel. The move leverages Shemaroo’s core Bollywood library and has shown steady growth in reach and TRPs over its first five months of operation.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Inventory Charge-offs | Ending Q4 FY26 | Final accelerated write-off of ₹30-35 crores expected in the March quarter. |
| Profitability | Improvement in FY27 | Bottom line expected to improve significantly as inventory charge-offs cease and ad markets stabilize. |
| Debt Reduction | FY27 Focus | Management intends to utilize improved operating cash flows in the next fiscal year for debt repayment. |
Risks & Constraints
| Risk | Context |
|---|---|
| Advertising Headwinds | Sustained softness in FMCG advertising spend continues to impact traditional media margins; recovery timing remains uncertain. |
| Competitive Intensity | The return of “Big Four” broadcasters to the Free Dish GEC space has permanently altered the competitive landscape for viewership share. |
| Leverage | Total debt has risen to ₹310 crores to fund operational losses; stabilization depends on a turnaround in traditional media revenue. |
Q&A Highlights
Inventory and Accounting
- Question: What is the remaining inventory and the impact of write-offs on the P&L? (Yajat Shah)
- Answer: Current inventory is ₹417 crores, down from ₹727 crores two years ago. We expect a final ₹35 crore charge-off in Q4 FY26, ending the year below ₹400 crores. This is an accounting policy change and does not reflect a loss in content value or monetization potential (Amit Haria/Hiren Gada).
FY27 Outlook
- Question: What are the expectations for revenue and EBITDA in the next financial year? (Devansh)
- Answer: We are confident in FY27 due to three factors: the end of inventory charge-offs, stabilization of the Free Dish landscape, and a potential recovery in FMCG ads. We are planning based on “moderate” ad growth rather than aggressive assumptions (Arghya Chakravarty).
Debt and Cash Flow
- Question: Why has debt increased to ₹310 crores and what is the reduction plan? (Harshit Mishra)
- Answer: Debt rose due to operational losses and lower ad revenue. We expect debt to stabilize at current levels for the remainder of FY26 and prioritize repayment using improved cash flows in FY27 (Amit Haria/Hiren Gada).
Segment Strategy
- Question: Are there plans to enter the VFX or high-end animation segment? (Devansh)
- Answer: No immediate plans for VFX services. We will focus on strengthening our existing digital video and OTT offerings (Gujarati/Hindi originals). We will continue to monetize existing animation IPs like Bal Ganesh (Arghya Chakravarty).
Key Takeaway
Shemaroo Entertainment reported a challenging Q3 FY26, with revenue declining 2% YoY to ₹161 crores and an EBITDA loss of ₹67 crores. The performance was characterized by a sharp divide between the digital segment, which grew 14% to ₹81 crores, and the traditional segment, which fell 14% due to weak FMCG advertising and competitive pressure on Free Dish. Profitability was significantly impacted by the planned ₹30-35 crore inventory charge-off, part of an eight-quarter exercise to lighten the balance sheet that has seen inventory reduced from ₹727 crores to ₹417 crores. Management remains strategically focused on its digital pivot, specifically through YouTube and ShemarooMe, while rebranding Chumbak TV to Shemaroo Josh to leverage its movie library. With the inventory rationalization set to conclude in Q4 FY26, the company anticipates a structural turnaround in profitability and a transition to debt reduction starting in FY27.
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