TV broadcasters’ margins set to expand 300 basis points to 15% by FY27 driven by digital growth: Crisil

The operating margins of Indian television (TV) broadcasters are projected to expand by 300 basis points (bps) to 15% by FY27, driven by growth in digital offerings, according to a Crisil Ratings report. The report covers 90% of the industry’s revenue. It highlights that digital revenue is expected to double-digit growth, boosting profitability and advertisement revenues. However, success will depend on broadcasters’ ability to compete with digital platforms while leveraging economies of scale. The report notes that improved profitability will elevate returns on capital to 10-12% by FY27, though still below the pre-pandemic levels of 12-15%. With traditional TV revenue stagnating between 2021-22 and 2024-25 due to the shift towards over-the-top (OTT) platforms and social media, broadcasters focus on launching their digital platforms and offering live sports and news content. Crisil expects the revenue contribution from digital to rise to 25% by FY27, with broadcasters benefiting from lower fixed costs and better content monetisation strategies.