Sandesh Ltd Management Discussions.


The year 2020 has been etched in our memories for turning our lives upside down. It brought distraught changes wherein entire strata of the society were affected and one being Media & Entertainment Sector. Media & Entertainment (M & E) Sector in India fell 24% in the year 2020 to reach INR 1.38 trillion (taking revenues back to 2017 levels). Digital subscription and Online gaming were the only two segments which grew in 2020 out of all the segments under M & E Sector. Print Segment witnessed 36% decline and the revenue declines were led by a 41% fall in advertising and 24% fall in circulation revenues. Despite the country being into lockdown for the major part of the year 2020, the Television segment declined 13% in 2020.

While the M & E Sector will witness a rebound in 2021 and is predicted to reach around INR 2.68 trillion by 2025, however, the recovery will vary over different segments. The recovery period for Print segment is predicted beyond three years, to regain the pre-pandemic revenue numbers, provided no further setbacks.

English language newspapers were hit harder and struggled to get back their circulation post the relaxations of lockdown, compared to regional newspapers. Advertising in English publications fell by 52% while advertising in Hindi and regional language publications reduced around 35%. The regional news is considered to be prominent among audiences, because it helps to garner regional products more strongly (print + digital). Regional channels received 27% more ad volumes than national channels in 2020. Regional ad rates have also been rising over the last two years and the same is expected to continue, driven by increase in regional content consumption on TV to 60% of total TV consumption. Regional language comprised over 50% of TV viewership.

Indias GDP contracted by 7.3% in 2020-21, as compared to 4% in 2019-20, however, Indian economy grew 1.6% in Quarter 4 of the Financial Year 2020-21. But the momentum of GDP growth has been affected by the second wave. While the M & E Sector usually grows faster than GDP, it also falls more than GDP degrowth, given the discretionary nature of advertising. In 2020, while the GDP fell by 8% advertising fell over 25% while the sector overall fell by 24%.

As per the Annual Report 2019-20 published by the Registrar of Newspapers for India, on 31st March, 2020 there were 1,43,423 registered publications as against 1,19,995 at the end of March, 2019. A total of 1498 new publications were registered during 2019-20.

The Company started its journey in 1923 and it belongs to the Regional Print Media Industry. Late Mr. Chimanbhai S. Patel acquired the entire business from the original promoter in the year 1958, and had put his efforts to strengthen the activities carried out by "SANDESH". The editorial policy of the Company has always been based on basic journalistic values of objectivity and has not been influenced by any external forces. Presently, Mr. Falgunbhai C. Patel, Chairman & Managing Director is running the entire business affairs of the Company, along with his son Mr. Parthiv F. Patel, Managing Director and a professional team of the Executives of the Company. The Company has a strong regional franchise, where it enjoys strong readership loyalty.

Currently, the Company is a publisher of "SANDESH" a premier Gujarati daily newspaper published from Ahmedabad, Vadodara, Surat, Rajkot, Bhuj and Bhavnagar in Gujarat, to carry on the business of editing, printing and publishing newspapers. The Company had started its printing facilities at Vadodara during 1985-86, at Surat during 1989-90, at Rajkot during 1990-91, at Bhavnagar during 1998-99 and at Bhuj during 2010-11 to cater to the semi-urban and rural areas. Besides the Company publishes the periodical "Sandesh Pratyaksha Panchang" which remained popular among the public.

Further, the Companys News TV channel ‘Sandesh News is very popular amongst Gujarati Viewers and it has also won several awards. Further, as a part of its out-of-home (OOH) advertising activity, the Company has advertisements sites at the major commercial areas in Ahmedabad.

(Source: EY FICCI Report 2021 – The era of Consumer A.R.T.)


India has been the growth leader amongst major economies including Emerging Markets and Developing Economies over the last five years. It surpassed China in terms of real GDP growth in 2014 and has remained above it till 2016 but since 2017 Indias growth has trended below that of China and the emergence of Covid-19 health crisis caused turbulence resulting into an economic crisis as countries undertook measures which severely constrained economic activity. India was projected to be one of the worst performing major economies partly due to stringent measures undertaken to contain the spread of Covid-19.

India is expected to regain its position as the global growth leader with an estimated growth of 11.5% and is projected to remain the fastest growing major economy in 2022. India is expected to become the fifth largest economy by 2022.

India shares 17.8% of the total world population and 2.5% of the worlds surface area. According to International Monetary Fund World Economic Outlook (October-2019), Indias nominal GDP is estimated at USD 3094 billion in 2020, making it the fifth largest economy in the world. It is projected to account for 3.2% of global GDP measured in nominal US $ exchange rate basis. When measured on the basis of purchasing power parity (PPP), India is estimated to be the third largest economy at PPP USD 10611 billion in 2022.

Indias per capita nominal GDP is estimated to contract by 4.8% in 2021 to INR 1,44,503 as compared to a growth of 2.7% in Chinas per capita nominal GDP in 2020. International Monetary Fund forecasts Indias per capita nominal GDP at 10.9% in 2023 slowing marginally to 10.2% by 2025. Higher per capita income drives consumption growth including that in the media and entertainment sector.

India is one of the very few countries in the world where the newspaper is delivered to the doorstep everyday. This zero friction availability of newspapers is significant contributor to its continued growth. With the boom in the digitalization few readers may have shifted to digital media, but still majority of the readers prefer a physical copy because they believe that the information provided to them is credible and accurate. In addition several surveys also indicate that newspapers are better able to increase reader loyalty because the credibility of the print medium is unparalleled. Credibility and trust in print as a medium of information is always high. Print allows you to choose a publication that your target audience is most likely to read. This can be a trade magazine that caters to a specific industry or a local newspaper. This is why many say print is better at reaching local audiences.

The Company, with its six editions at different strategic locations, has strongly established its presence across the State of Gujarat. The Company also sees the opportunities in rural and semi-urban areas of Gujarat. The Company is planning to continuously improve the circulation of its newspaper in those areas also and will target higher readership amongst the young, educated and elite mass of the public. The publications of the Company are very popular in the urban areas of the State and it continuously improving the readership in smaller towns and villages of the State of Gujarat.

Advertising in English publications fell by 52%, while advertising in Hindi and regional language publications reduced around 35%. Share of advertising to total income stood at 64% down from 70% in 2019, and we expect it to further reduce to 62% by 2023. Advertising revenues fell 41% in 2020, but we expect them to grow 25% in 2021 to reach INR 152.1 billion. FMCG, Auto and education contributed the most of the print ad revenues. Gujarat contributed about 4% to overall Newspaper ad volumes.

Circulation supply chain is the most important aspect for the growth of the Indian print segment, providing newspapers and magazines at readers doorsteps ensures reading habits continue. Subscription revenues fared better, falling 24% though metro and English language newspapers witnessed a more pronounced fall. Hindi and vernacular newspaper circulation revenue fell 20% in 2020 compared to 2019, while English circulation revenues fell 50%. Circulation revenue fell as doorstep delivery was barred by many societies, buildings and residents welfare associations due to the fear of infection. However, by December, 2020 average circulation was back to around 80% of 2019 levels, unevenly distributed between languages (at 88%) and English (at 67%). It is also estimated that 5-10% of print circulation may have been lost permanently due to breakage in the daily habits, growth of digital news during the Pandemic or other pecuniary concerns.

It is estimated that by 2021 newspaper circulation will recover to 88% of 2019 levels and further grow to reach 94% by 2022. At 4.6 hours per day, Indians came third in the world, for the most amount of time spent on phones in 2020 overtaking China, Mexico, Argentina and South Korea. Average mobile data consumption continued to witness robust growth, boosted by the rapid adoption of 4G and people working from home during Covid – 19, at an average of 15.7 GB per month. India also remained second largest market by app downloads in 2020. Indians downloaded 24.3 billion apps in 2020, a growth of over 20% over 2019. Online news and magazines app download contributed 3% to total app downloads in 2020 and increased 12% in 2020.

Online news audience grew between December 2019 and 2020 to reach around 450 million across mobile and desktop users of news sites, portals and aggregators; however daily regular users were much lower. This is approximately 57% of internet users. 9 out of 10 top online newspapers are in regional languages. Online news platform have increased their reach in 2020 as circulation of physical newspapers faltered. Most platforms have started putting some content behind a paywall in an effort to increase digital subscription revenues.

Ine_ective IP Regulations, lack of enforcement and piracy are prevalent in the digital media and hence, fully monetization is still not possible. Advertising activity is the important source of revenue for a newspaper industry. Since last three to four years, GDP growth of the country is sliding to sub 5% and the Covid – 19 Crisis being the major contributor to contraction of economy. Weak economic performance affects the revenue of advertising.

Print Companies are also focusing on enhancing their digital footprint. Almost all the large print companies have established their news websites and/or apps. While most Indian publishers have created an online presence, digital content monetization is still significantly under penetrated for many players. The Company has also created its online presence through its website – www. and also provides for E-Newspaper indistinguishable to its Physical Newspaper. Digital Media, although it has a much wider reach and allows for greater flexibility, its results do not compare to the quality customer relationships one can gain from using a print media strategy.

The Company has News and Current Affair Television channel ‘Sandesh News which is very popular amongst Gujarati Viewers. Television advertising revenue declined by 21.5% in the year 2020, though ad volumes fell just 3%. While major events were postponed due to pandemic, but IPL Season 13 provided a much needed revival push. IPL Season 2020 surpassed the viewership of IPL Season 12 by 23% with a total of 400 billion viewing minutes as compared to 326 billion viewing minutes for the 2019 edition and generated 112 hours of commercial ad volumes. The news genre led with 31% share of ad volume and regional channels received 27% more ad volumes. Gujarati, Punjabi and Bangla were the top gainers in viewership share during 2020. The viewership of News genre increased to 10.4% in 2020. As per BARC, News genre viewership was up 43% during the first 26 weeks in 2020, compared to the corresponding period in 2019, as viewers kept coming back to news channels for information related to Covid-19 Pandemic through the crisis. Regional ad rates have been rising over the last two years faster than Hindi Speaking Markets and it is expected the same to continue and it will be driven by increase in regional content consumption on TV to 60% of total TV consumption, improved quality and higher quantity of content on regional channels.

"Sandesh Spotlight" is the out of home (OOH) division of the Company which has a vision- ‘To make an impact in the OOH market by combining Marketing Strength and Futuristic Approach. The Company had procured various prestigious tenders from the Statutory Authorities like Ahmedabad Janmarg Limited, Ahmedabad Municipal Corporation (AMC), Vadodara Municipal Corporation (VMC), Gujarat State Road Transport Corporation (GSRTC), Ahmedabad Municipal Transport Service (AMTS) and Defence Estates Office (DEO). Sandesh Spotlight has properties in the prime locations in the cities of Gujarat covering the most prominent junctions and some of the busiest cross roads and aims at strategically adding more so as to be able to provide its clients with best visibility for their brands; in line with its mission - ‘To work as a team with our clients to ensure better mileage and visibility for their brands. The Company had the advertising rights on buses of AMTS, buses of GSRTC which provides a transport facility across the State of Gujarat, Bus Shelters of Vadodara Municipal Corporation, Unipoles of AMC and DEO. Better planning, focused approach for the implementation of strategy and professionalization of the management will help the Company to have a sustained development of its business.

OOH segment de-grew 60% in the year 2020 to reach INR 15.6 billion, the value of which includes traditional, transit and digital media, but excludes untracked OOH media such as wall paintings, ambient media, proxy advertising, etc. which could be around INR 3-5 billion in addition to this number. Real Estate, FMCG and Financial services were the largest advertisers on OOH. However sharp falls were seen in OOH spends from categories like hospitals, restaurants, education, organized retail and telecom. Government ads about the Covid – 19 pandemic were put up on most OOH sites across the nation in the April to June quarter while brands refrained from investing during this period. Traditional OOH comprised 60% of revenues and remained the largest segment, while digital media grew to 5% of the segments revenues as many advertisers experimented in 2020. The OOH segment is expected to reach 2019 levels not before 2024. Local Municipal Corporation has started inviting bids for advertising tenders as per media type to recover lost revenues. The OOH segment is expected to reach INR 31.8 billion by 2023. In order to overcome roadblocks caused by the Covid-19 Pandemic, government intervention pertaining to taxation relief, licensing and contracting will be required.


During the year under review the Company has two reportable segments – Media and Finance. Media is the core business of the Company since its inception.

Media Segment:

The revenue from media segment was Rs. 22762.53 during the Financial Year under review as against Rs. 33637.69 Lacs in the previous Financial Year.

Revenue Segment:

The revenue from finance segment Rs. 2013.69 Lacs during the Financial Year under review as against Rs. 400.44 Lacs in the previous Financial Year.


The increase in population, literacy rate and reach has led to increased circulation and readership of the newspapers in India. The Company plans steady increase its geographical presence, which helps improve its circulation and readership of its publications. Year 2020 was a watershed year for advertising spends. Print and Radio, which had started to de-grow in single digits in 2019, continued to de-grow in 2020 as they lost some consumers due to reverse migration, cost cutting and changed habits, and though most of these will eventually return as the market continues to grow, some portion of the earlier base could be a permanent loss. The experiential industry – comprising events and cinemas – degrew due to social distancing norms, consumer and brand fear and lockdown guidelines. It is though expected that the advertising to grow 27% in 2021 and regain its earlier level by 2023.

There is a steady growth for print media industry. The print sector continues to be the 2nd largest contributor of advertising expenditure after Television. Unlike western countries, print media remains popular in India. Besides low cover price and the convenience of home delivery, it benefits from the ability to provide original and credible content, and peoples habit of reading physical newspapers.

However, the Covid-19 Pandemic has impacted the ad revenues, as it correlates strongly with economic activity. As for the subscription revenue, the sector is witnessing a structural change amid a shift in consumer preference towards digital news, from physical newspapers. This is more prominent for English newspapers, while regional language newspapers had relatively resilient subscription revenue because of their strong roots in hinterland.

As per the Union Budget 2021-22, Newsprint cost has jumped 20% in the 3rd Quarter of Financial Year 2020-21 due to demand supply imbalance post pandemic, prompting news publishers to petition the government for waiver of 5% import duty to help cut cost. The Industry has been hit hard due to Covid-19 led disruptions and the most newspapers have stopped sending newspapers to rural areas where there is less than 50 copies to reduce the distribution cost, as reported by INS. In representation to the Finance Minister Nirmala Sitharaman, INS had suggested to take steps as to reduce the customs duty on import of newsprints, a stimulus package for the industry or atleast to help the publications by releasing advertisement with an increase tari_ of 50%. Much to the disappointment of the newspaper publishers, Union Budget 2021-22 had no good news for the industry. The Company uses imported as well as domestic newsprint and by judicious mix of them, tries to mitigate the high cost impact on the business operations.

Most publications resorted to cost reductions measures in 2020, which reduced the costs by between 25-40%. Multiple strategies were adopted to optimize the costs, both temporary and permanent in nature. Shutdown of unprofitable editions, downsized employee base, curtailed rentals of leased properties etc., were some of the permanent measures and reducing pagination of publications to save on newsprint, ink, consumables and production costs, salary reductions, reducing the cost to run office operations etc., were some of the temporary measures adopted by the publication Companies to optimize cost. Some of the measures are reversible when the business environment improves, but some of the permanent strategies will eventually enable print Companies to get back to profitability in the medium term.

Margin pressures will continue due to manpower cost increases (on account of the proposed labour code) and the vagaries of newsprint costs. Hence the publishers will have to strategize and ensure cost efficiencies, thereby keeping print affordable for advertisers.

Newspaper industries will need to focus on recovering circulation in priority markets where advertising budgets are higher and for other markets, cover prices can be increased based on market dynamics. Print will need to focus on growing its reach in its existing markets through a combination of identifying new micro-markets which are underpenetrated as well as forging bundle deals with direct to consumer aggregators like television, e-commerce platforms, OTT platforms.

With the advent of digital media, there is a need to increase the utility of the newspaper. i.e. build the pull factor of the newspaper by incorporating strategies such as discount coupons, printing content with deeper analysis and info-graphics, giving point of view apart from factual reportage, interactivity on stocks, quizzes, polls, etc., print only editions for specific markets or readers specific content needs.

As internet access expands, the digital media poses a highest threat to the newspaper industry. Digital Media allows for relatively more flexibility and control over exactly who sees them, than print media, so marketers can more easily target them toward specific demographics. However, print media are better able to increase reader loyalty because they are credible. Many people subscribe to newspapers because they understand and believe that the information provided to them is credible and accurate. Publishing an article in print takes a lot more effort than publishing something online. This is because you only have one chance to get every word and image right before it gets published. With digital media, you can go back in to change or tweak your article and send it back out. Since there is this pressure on accuracy and credibility media, readers are more likely to trust the print media platform. This works to the advantage by generating leads and sales much easier. As an added benefit, this trustworthiness leads to better reader loyalty. Indias print market is highly fragmented. There is sti_ competition between publication houses for circulation, readership and advertising and this industry is very competitive. The Company is well established and it has better financial resources and it always strives hard to generate higher revenues every year and hence, the Company is able to quickly respond to market changes and consumer sentiments. The Company has competed successfully in the year under review and it believes to continuously compete effectively. The Company is continuously strengthening its market positions, reinforcing its relationships with Agents, Advertisers and providing high quality contents to its readers. The Companys website i.e. "" is a very popular website for the Gujarati community.

The Company is committed for giving credible news to the readers and viewers though the outbreak of Covid-19 has impact on the business. The Company is hopeful that the economic activities will recover soon and the Company will achieve better financial performance in future.


The Companys internal control systems are adequate considering size and nature of operations of the Company, to meet regulatory and statutory requirements, assure recording of all transactions and report reliable and timely financial information. The Company has defined risk management framework and it is implemented as an integral part of business processes. The Company has installed Enterprise Resource Planning System (SAP) for accounting purposes. To counter the adverse fluctuation in the newsprint prices, the Company vigorously keeps watch on its price trends and accordingly plans the purchase of newsprint to ensure efficient operations and better profitability. The Company applies effective mitigation techniques to manage potential risks. Risk management system includes recording, monitoring and controlling internal enterprise business risks and addressing them through informed and objective strategies. Further, the Board of Directors of the Company has adopted a Risk Management Policy and it has identified various risks and also has mitigation plans for each risk identified. Its comprehensive risk management system ensures that all risks are timely defined and mitigated in accordance with the Risk Management Policy. The Audit Committee of the Board of Directors of the Company periodically reviews the internal control system and also internal audit reports issued by the Internal Auditors of the Company.

The Company has formulated a robust whistleblower policy for receiving and redressing complaints of employees. No employee has been denied access to the Audit Committee or its Chairman during the year under review.


A Companys assets fall in two categories Tangible Assets and Intangible Assets. At first glance it would seem that the employees are Tangible assets but in-fact they are the Intangible assets of the Company. The skill sets of the Companys employees are an asset to the organization and since abilities cant be touched, the employees are therefore intangible assets of any Company. The Company treats its employees as most valuable assets as it knows that without good employees the best of the business plans and ideas will fail. In todays dynamic and continuously changing business world, it is the human assets and not the fixed or tangible assets that differentiate an organization from its competitors. Improving employee efficiency and performance has always been the top most priority for the Company. The Company also aims to align human resource practices with its business goals. The performance management system enables a holistic approach to the issue of managing performance and does not limit to only an appraisal. The total number of permanent employees on the rolls of the Company is 449 as on March 31, 2021. The Company takes pride of its highly motivated and committed team of its employees. The employees performed to their full potential and contributed to the growth and development of the Company. Further, the Company has adopted various safety measures to ensure safe working environment for the employees of the Company. During the Financial Year, the industrial relations between the employees and management were calm and composed.

Further, the Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has formed Internal Complaints Committee and also formulated a policy. No complaint was reported during the Financial Year 2020-21.



Particulars Standalone


2020-21 2019-20 2020-21 2019-20
Revenue from Operations 27184.37 34107.21 27372.07 34321.30
Other Income 4702.60 1151.09 4721.51 1168.39
Total Revenue 31886.97 35258.30 32093.58 35489.69
Expenditure 19666.91 27136.87 19783.15 27260.82
EBIDTA 12220.06 8121.43 12310.43 8228.87
EBIDTA Margin 38.32% 23.03% 38.36% 23.19%
Finance Cost 46.10 41.70 46.10 41.70
Depreciation & Amortization 693.61 785.92 693.61 785.92
Total Expenditure 20406.62 27964.49 20522.86 28088.44
Exceptional Item 152.80 94.23 152.80 94.23
Profit Before Tax 11633.15 7388.04 11723.52 7692.38
Provision for Current Tax, Deferred Tax & Other Tax Expenses 2702.46 1551.73 2725.23 1582.40
Profit After Tax 8930.69 5836.31 8998.29 6109.98
PAT Margin 28.02% 16.55% 28.04% 17.22%
Dividend as % of Paid –up share Capital 50% 50% N.A. N.A.

Revenue from Operations

During the year under review on Standalone basis, the income from operations has decreased by 20.30% from Rs. 34107.21 Lacs in F.Y. 2019-20 to Rs. 27184.37 Lacs in F.Y. 2020-21 due to prolonged lockdown and its after effect.


The Company has managed to improve its EBIDTA from Rs. 8121.43 Lacs to Rs. 12220.06 Lacs by improving its return out of treasury operations.

Depreciation and Amortization

Depreciation and amortization charge during the F.Y. 2020-21 was Rs. 693.61 Lacs as compared with Rs. 785.92 Lacs during the previous F.Y. 2019-20.

Finance Cost

Finance Cost amounted to Rs. 46.10 Lacs compared to Rs. 41.70 Lacs during the previous financial year.

Income Tax

The income tax charge for the F.Y. 2020-21 stood at Rs. 2702.46 Lacs compared to Rs. 1551.73 Lacs in the previous F.Y. 2019-20.

Profit after Tax

The profit after taxes for the F.Y. 2020-21 was Rs. 8930.69 Lacs compared to Rs. 5836.31 Lacs in the previous F.Y. 2019-20.

Fixed Assets

The investment in the fixed assets at the end of the F.Y. 2020-21 was Rs. 6503.42 Lacs as compared to Rs. 7336.98 Lacs as at the end of previous F.Y. 2019-20. The Company, as planned, is gradually moving upwards in its core business and also strives hard to improvise its strengths to keep its dominance in the existing business and also explore opportunities available in new sectors.


Summary _ Financial Ratio_
Particular 2020-21 2019-20 % change Reasons for Change
Debtors Turnover 3.84 4.77 -19.35% Due to Covid – 19 and after effect of Lock Down, realization of debtors have slowed down
Inventory Turnover 4.66 9.02 -48.36% During the year prices of newsprint increased and anticipating further increase in the prices and shortage of supply, the Company has maintained higher inventory.
Interest Coverage Ratio Current Ratio 253.34 6.81 178.16 9.16 42.20% -25.74% This has led to decrease in the ratio. Due to increase in EBIT Standard Current ratio is 1:1. Thus current ratio is comfortable.
Debt Equity Ratio - - - The Company has no debt.
Operating Profit Margin % 25.10% 18.13% 38.44% Tight control on expense and increase in income from financial activities has helped in improvement
Net Profit Margin % 36.48% 20.95% 74.11% Tight control on expense and increase in income from financial activities has helped in improvement
Return on Net worth 10.10% 7.51% 34.50% Tight control on expense and increase in income from financial activities has helped in improvement


Readers are cautioned that this discussion and analysis contains forward-looking statements that involve risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. The details and information used in this report have been taken from publicly available sources. Any discrepancies in the details or information are incidental and unintentional. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of date. The above discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.