HT Media has declared its standalone results for the quarter ended March 2008 (Q4). The company's standalone sales were at Rs 313 crore versus Rs 319 crore on QoQ basis and versus Rs 275 crore on YoY basis.

The company's Q4 standalone net profit was at Rs 41.5 crore versus Rs 36.8 crore on QoQ basis and versus Rs 24 crore on YoY basis. Its standalone other income was at Rs 12 crore versus Rs 8.7 crore on QoQ basis and versus Rs 9 crore on YoY basis.

Rajiv Verma, CEO of HT Media is optimistic that the results will be sustained in the quarters to come. He told CNBC-TV18 that he is bullish about the way their business has been performing.

Going forward, HT Media will be focusing on social networking, education, online jobs and classifieds.  “The internet is going to be an area of intensive focus and investment by the company,” he stated.

Excerpts from CNBC-TV18’s exclusive interview with Rajiv Verma: 

Q: How have you been able to control cost? Is there a scenario where you can maintain margins at these levels, given the way newsprint prices are moving?

A: We are quite bullish about the way our business has been performing. During this quarter, compared to the same period last year, business improved on an EBITDA basis where the margin improved from 18% to 22% as a percentage to sales. This has been possible because of operating leverage kicking in the businesses in which we have been investing.

With respect to cost control on the raw material as well as on the fixed investment side, there has been very good work happening in the company. Ad revenues also saw better growth than previous quarters. Most of that in our industry leads to an operating margin improvement. On the whole, this is because of good results on revenue as well as internal cost control in the company.   

Q: Can you sustain this performance on an EBITDA level, given the way newsprint prices are moving? Your inventory level is generally about two months. From this quarter onwards, would we see an impact coming in? How are you tying up the newsprint cost with your suppliers? How are you positioning yourself to safeguard margins?

A: We are fairly optimistic that these results will be sustained in the quarters to come. Currently, newsprint is seeing hyperinflation in the commodity cycle, which has now reached its peak. Globally, newsprint prices are going up.

However, because of a good forecast in the mechanism and seeing that the cyclicity of commodity is going to kick in soon, we had stocked ourselves up. Our inventories are going to last for a reasonably long period of time, at least for two more quarters after which we expect some softening to happen.

In addition to that, there is a lot of innovation happening within the company. On the newsprint consumption side, we are looking at all possibilities within the company in curtailing waste and for finding ways of using thinner paper without impacting consumer quality. So, there is a lot of work happening and ensuring that the cyclicity of this business does not impact the internal results.

However, I would add that businesses and brands that need investment will be provided with that level of investment. So, if at all one will see some change in result, it will not be because of commodity cycle only. It may be because we want to undertake investment behind some of our brands.

Q: How are you looking at ad rates, going forward? There are signs of a slowdown in the economy, in terms of industrial growth and loan offtake. Are you seeing an impact on your inability to increase ad rates? Will you have to bring the rates down?

A: Ad rates still have some way to go up. We are trying to improve return on investments for all our advertisers. We would like to bring them better impact, response, improve readership and improve the number of people who are reading those ads.

If the economy does not go in for a massive slowdown, I don’t think the pushback on advertising cost are going to be enormous. We are going to try and pass minimum cost increase on the commodity side to our advertisers.

Q: What can be the rise in ad rates that you are sensing you can push on?

A: I cannot put an exact number on that. It will not be different from the kind of increases we have been seeing in media prices over the last two-three years. It will be a very similar kind of price increase, which will be to basically counter the inflation that happens YoY as well as the improvement in the overall readership that we bring to our product, which is due to circulation increase.

Q: You are investing Rs 150 crore in your internet business. What are the properties that you hold there? What is the plan and have you talked about unlocking value somewhere down the line for that business? Is there a timeline or a business plan that you have laid out on that front?

A: Internet business is the news business that we are building with the launch of the online job portal called ‘Shine’. This is a differentiated offering in the Indian market, which has been built over the last two years with the help of some strong global partners coming from Israeli as well as American background.

Going forward, the areas in which we will be focusing are social networking, education as well as online job and classifieds. These are the three areas in which we are going to focus our efforts. But, going forward, internet is going to be an area of intensive focus and investment by the company.