Balaji Telefilms stock gains after Q4 PAT swing; is digital finally delivering for the media veteran?

Can Balaji Telefilms’ Q4 PAT surprise and ALT’s growth reposition it as a top media stock in India’s OTT-led future?

Shares of Balaji Telefilms Limited (NSE: BALAJITELE) rose nearly 2% on July 3 to close at ₹92.75 after the content studio posted a dramatic earnings turnaround for Q4 FY25, reporting a net profit of ₹94 crore versus a loss of ₹2.6 crore in the same period last year. The full-year consolidated PAT stood at ₹84.6 crore, driven by a one-time deferred tax reversal and notable traction across its digital and television content segments. The company’s consolidated revenue for FY25 was ₹453.1 crore, a decline from ₹625.1 crore in FY24, yet the bottom-line surge reignited investor interest amid its ongoing structural realignment.

What factors contributed to the sharp rebound in Q4 profit and FY25 net earnings despite revenue decline?

Balaji Telefilms Limited saw Q4 FY25 total income of ₹76.5 crore and operating income of ₹66.2 crore, both down from the ₹135 crore levels in Q4 FY24. However, the company booked a ₹104.8 crore deferred tax gain, resulting in a net PAT of ₹94 crore for the quarter. Excluding this tax impact, the core operations remained under pressure, especially in the movie business, though digital showed sequential resilience.

On an annual basis, revenue declined 27.5% year-on-year to ₹453.1 crore, while PAT jumped more than 4x to ₹84.6 crore from ₹19.4 crore in FY24. Basic EPS for the year came in at ₹8.41, compared to ₹1.96 a year ago. Notably, consolidated EBITDA remained in the red at -₹13 crore versus a positive ₹46 crore in FY24.

Still, the sharp net profitability was enough to turn heads, especially when paired with strategic moves like the merger of ALT Digital Media and Marinating Films into the parent company, completed in June 2025 following NCLT approval. This consolidation is expected to drive operational synergies, cost efficiencies, and intellectual property (IP) monetization opportunities across its film and digital verticals.

How did each segment—TV, films, and digital—perform in FY25, and what does it signal for the business mix?

Balaji Telefilms’ segmental performance in FY25 revealed a clear shift. Television remained the largest contributor to revenue, accounting for ₹237.6 crore or 51% of the topline. The film segment contributed ₹177.4 crore (38%), while digital revenue stood at ₹49.7 crore (11%).

The television division, led by long-running shows such as Kumkum Bhagya, Bhagya Lakshmi, and Bade Achhe Lagte Hain Phir Se, recorded a profit before tax (PBT) of ₹33.3 crore, up from ₹16.6 crore in FY24. Despite macro headwinds, the TV business remains the backbone of Balaji’s earnings stability, with five on-air shows contributing 773+ hours of content production in FY25.

Meanwhile, the digital division is positioning itself for higher-margin growth. FY25 digital revenue rose 16.6% year-over-year, with ALTT reporting 10.6 lakh subscriptions and ₹20.26 crore in SVOD revenue. Including B2B deals with major OTT platforms, the order book exceeds ₹300 crore, underpinned by strong platform partnerships and newer monetization models including AVOD.

The films segment posted a modest PBT of ₹2.8 crore, despite reporting the second-largest revenue share. Releases like LSD 2, The Sabarmati Report, and The Buckingham Murders formed the core FY25 slate, while upcoming titles such as Vrusshabha, Vvan, and Bhoot Bangla are expected to bolster future performance. A de-risked model—wherein over 85% of production costs are pre-sold—has helped mitigate box office volatility.

Why are institutional investors increasing exposure, and what are they betting on in FY26?

Foreign institutional investors (FIIs) increased their stake in Balaji Telefilms during the March 2025 quarter, now holding 25.1% of total equity. Notable investors include Gothic Corporation and Atyant Capital. Reliance Industries remains the largest public shareholder, signaling strategic alignment or potential for future collaborations.

Analysts believe this rising FII participation reflects optimism about Balaji’s digital strategy, its growing IP base, and the improved capital structure following the ₹130.7 crore equity raise in February 2025. The fundraise—supported by both promoters and foreign investors—is earmarked for scaling the movie and distribution businesses, bolstering digital content creation, and expanding its owned IP portfolio.

With consolidated cash reserves of ₹172 crore in banks and mutual funds, Balaji is adequately funded to pursue its digital-first ambitions. The introduction of short-format content on a new platform ‘Kutingg’ and renewed focus on YouTube monetization offer additional growth levers.

How does Balaji’s digital pivot align with broader Indian OTT trends and media consumption patterns?

India’s OTT video market is growing rapidly, with subscription revenue projected to rise from US$0.88 billion in 2023 to over US$1.2 billion by 2026, according to an E&Y report. The number of paid OTT subscriptions is expected to hit 138 million by 2026, while digital content consumption crossed 1.1 trillion hours in 2024—more than any other market globally.

Balaji’s hybrid model of SVOD + AVOD, coupled with deeper integration into regional and branded content formats, mirrors this structural transformation. Its ability to adapt—by retaining IP ownership, optimizing distribution, and targeting vernacular audiences—could allow it to leverage India’s growing 625 million-strong online video viewer base by 2027.

What risks remain, and can Balaji Telefilms sustain profitability in FY26?

Despite the Q4 PAT surprise, Balaji faces challenges. The FY25 EBITDA margin remained negative, and topline pressure from reduced theatrical revenues weighed on cash flows. Box office revenue in India dropped from ₹120 billion in 2023 to ₹114 billion in 2024, while TV content demand remains stable but not growing.

Execution on digital remains crucial. Subscription renewals, user engagement, and effective monetization of YouTube and AFP (advertiser-funded programs) content will determine scale. Regulatory changes around streaming content, rising content acquisition costs, and intense OTT competition also present headwinds.

Yet the company’s strategic choices—focusing on high-ROI IPs, diversifying digital delivery, and improving operating leverage post-merger—offer a credible roadmap. Analysts expect FY26 to be a transitional year, with the potential to restore positive EBITDA if the digital revenue continues to grow at or above 15–20%.