Rediff.com India Limited (REDF)
F2Q13 Earnings Call
October 26, 2012 9:00 am ET
Anshul Rastogi – Branch Head
Mandar Narvekar – Investor Relations and Corporate Affairs
Ajit Balakrishnan – Chairman and Chief Executive Officer
Swasti Bhowmick – Chief Financial Officer
Previous Statements by REDF
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I would like to now hand over the conference call to Mr. Mandar. Thank you, and over to you, sir.
Thank you, and good morning everyone, and thank you for with us to discuss Rediff.com’s financial results for the second fiscal quarter ended September 30, 2012. I would like to introduce you to the members of the management present on this call who will take you through the highlights of the Company’s performance. We have with us Mr. Ajit Balakrishnan, Chairman and CEO; and Mr. Swasti Bhowmick, CFO.
As mentioned earlier, all of you are currently on a listen-in mode only. This conference call will last for about 20 minutes, and then we’ll be glad to answer any questions that you may have. For your immediate reference, we have also posted the earnings release for the second fiscal quarter ended September 30, 2012, dated today on our website at investor.rediff.com. You may also call me at our Indian office at 9122-61820000, and we will be glad to fax or email you a copy during the course of this call.
Before proceeding, I would like to mention that during the conference call except for the historical information and discussions contained herein, statements may constitute forward-looking statements for the purpose of the safe harbor provision under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as may, will, expect, believe, will continue, anticipate, estimate, intent, plan, contemplate, seek to, future, objective, goal, project, should, will perceive or similar terms, variations of those terms or the negatives of those terms.
These statements involve a number of risks, uncertainties and other factors that can cause actual results to differ materially from those that may be projected by the forward-looking statements. These risks and uncertainties include but are not limited to a slowdown in the economy worldwide and in the sectors in which our clients are based, a slowdown in the internet and the IT sectors worldwide, competition, the success or failure of our past or future acquisitions, attracting, recruiting and retaining highly-skilled employees, technology, acceptance of new products or services, the development of broadband Internet and 3G networks in India, legal and regulatory policies, managing risks associated with customer products and a widespread acceptance on the Internet.
Listeners should carefully review the risk factors and any other cautionary statements contained in our latest annual report on Form 20-F and other reports filed by Rediff.com with the U.S. Securities and Exchange Commission from time to time. These reports are available on the SEC website from the SEC’s offices in Washington DC and on request by emailing us at firstname.lastname@example.org.
Rediff.com and its subsidiaries may from time to time make additional written and oral forward-looking statements. Rediff.com and its subsidiaries do not undertake to update any forward-looking statements that may be made from time to time by Rediff.com or on its behalf.
I would now like to introduce Mr. Ajit Balakrishnan, our Chairman and CEO.
Good morning to everyone, welcome you all, and thank you for your continued interest in our company. As you have seen from our announcement where the overall revenues declined year-over-year, there are a number of business areas, which continued to show growth and we started to see a reversal and advertising spend in particular during the second quarter of this year.
With lower sales, our margins were low, but as I have said previously, we are aggressively managing our expenses to ensure we have the right capital structure in place to invest and the time is right. I remain focused as this entire leaders’ team on building a business for the long-term, and with that, achieving higher shareholder value for everyone.
I’ll begin today by providing some high-level updates and general comments on the India markets and some statistics relevant to our business. I’d follow up with some comments on our quarter, and then turn the call over to our Chief Financial Officer, Swasti Bhowmick who will provide a detailed financial analysis. We will then open up the call for questions.
As per ComScore, September 2012 report really commands a 21% reach in the Indian Internet market, while broadband penetration in India has not progressed as far as we would have liked, it is increasing as part of its highlights on telecom subscription data report released earlier this month. TRAI found that that broadband subscriber base increased from 14.7 million at the end of July 2012 to 14.8 million at the end of August 2012, registering a monthly growth of close to 1.4%.
However, this is small when comparing these figures to the overall India population, and there continues to be a number of real challenges that have to be overcome for wide stream adoption to succeed. Key among these are the massive capital expenditure outlays that are required to build a network of carrying traffic between cities and still maintain a certain speed, certain sufficient number of handsets at affordable prices and compelling applications requiring 3G speeds.