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Print media industry to grow by 8-10% due to FMCG recovery and upcoming elections: ICRA

According to the ICRA estimates, the print media ad revenue to remain below the pre-Covid level in FY2024, despite an expected increase in ad-spent by the Government in the run-up to the elections

ICRA has estimated the revenues for the print media industry will grow by 8%-10% YoY in FY2024 supported by a pick-up in ad-spends by the Government in view of the upcoming General Elections and recovery in demand from key end-user industries (mainly, FMCG and auto, currently ~25% below pre-pandemic levels).

Additionally, the easing in newsprint prices to approximately USD 650/MT currently, which had touched historically high levels (USD 1,000-1,100/MT) in FY2023, is expected to support a 500-600 bps (to 15-17%) recovery in the players’ operating margins.

Although, Ritu Goswami, Sector Head, Corporate Ratings, ICRA, pointed out that though the revenues and margins are expected to improve sequentially in FY2024, structural challenges owing to competition from digital media will limit the medium-term growth potential.

She said, “While ad volumes (insertions per day) reverted to pre-pandemic levels by the end of 2022, ad rates continued to lag due to weak demand from key end-user industries and a shift in ad spending towards alternative mediums – mainly digital.”

Goswami further said that in addition to the competitive ad rates vis-a-vis the print media (given the lower cost of production) digital media’s inherent benefits for advertisers such as flexible formats, personalised targeted campaigns, monitoring of real-time reader data, etc. have led to the shift in their ad budgets towards this medium.

Emphasising the newsprint supply side challenge hovering over the print industry, Goswami said that owing to the growing environmental concerns, the closure of several paper mills during the pandemic and the shift in production by several players from newsprint to other grades of paper (like packaging paper), newsprint prices will continue to be above the historically average levels.

“Industry margins are, therefore, unlikely to see pre-pandemic levels (of over 20%) over the medium term,” she added.

As per ICRA’s analysis of 10 print players representing approximately 30% of the industry size, the circulation revenues of the industry had reached around 90% of the pre-pandemic levels in FY2023e (estimated figures), primarily driven by the increase in cover prices, as the number of copies in circulation remained significantly low vis-à-vis 2019 levels.

The ICRA data mentioned that print ad revenues, at ~80% of FY2019 levels in FY2023, have been more gradual to recover. “On the cost side, the Russia-Ukraine war aggravated the newsprint supply issues and led to significant escalations in newsprint prices (Russia being a major supplier of imported newsprint to India) and adversely impacted the industry’s operating margins (YoY decline of ~600 bps in FY2023e),” said ICRA.


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