The uptake in ad spends will be largely attributed to the general elections. However, even with the growth, the ad revenue for print will be below the pre-Covid levels according to the report.

FMCG and auto are expected to contribute significantly to the growth in advertising.

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

ICRA analysed 10 print players which represented 30% of the industry size, to understand that their circulation revenues had reached around 90% of the pre-pandemic levels in FY2023e, largely driven by the increase in cover prices, as the number of copies in circulation remained significantly low vis-à-vis 2019 levels.

Ritu Goswami, sector head, corporate ratings, ICRA, said, “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. While ad volumes (insertions per day) reverted to pre-pandemic levels by end-2022, ad rates continued to lag due to weak demand from key end-user industries and shift in ad spends towards alternative mediums – mainly digital." 

She added, "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. had led to the shift in their ad budgets towards this medium. On the supply side, newsprint supply is expected to remain a challenge 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) and is likely to keep the newsprint prices above the historically average levels. Industry margins are, therefore, unlikely to see pre-pandemic levels (of over 20%) over the medium term.”