PCG RESEARCH MEDIA & ENTERTAINMENT Sep … PCG...Private Client Group - PCG RESEARCH P a g e | 1 PCG RESEARCH MEDIA & ENTERTAINMENT Sep 17, 2016 We believe, Indian Media and Entertainment

Private Client Group - PCG RESEARCH P a g e | 1

PCG RESEARCH MEDIA & ENTERTAINMENT Sep 17, 2016

We believe, Indian Media and Entertainment (M&E) Industry is a high growth sector on cusp of take-off. The

sector is providing impetus to country's overall economic growth and likely to zoom ahead backed by rising

consumer demand and improving advertising revenues. This industry is expected to grow at a Compounded

Annual Growth Rate (CAGR) of 14 % year-on-year to reach Rs. 2,26,000 crore by 2020.

Digital India campaign of Government of India launched by the Prime Minister Shri Narendra Modi in July

2015 - with an objective of connecting rural areas with high-speed Internet networks and improving digital

more be limited in urban area. Today also approximately 35% of internet users are from rural India. Internet

is fast becoming a mainstream media for entertainment for most of the people and this disruption is going to

affect many players in the Industry.

Television and traditional electronic Media, Print, Films, Radio, Music, Out of Home advertising, Animation

and Gaming, all the sub-sectors of the industry are attracting huge investor interest and also experiencing

disruptions from the innovations from the technology. Nimble technology driven firms and companies with

better hooks to large internet players who control Search, social media and traffic will emerge as winners.

India's Digital Advertising market has grown at a fast pace of 33 % annually between 2010 and 2015, while

this portion as a percentage of total advertising increased to 13% or nearly US$ 1 billion in 2015. We believe

this is likely to rise faster going ahead.

Introduction of a multi-phase digitisation policy by the Government of India regarding the mandatory

digitization of the Cable Services created a huge opportunity for broadcasters to monetize their services.

Broadcasters have been able to garner higher amount of subscription revenues and better target advertising

revenues. Earlier, we highlighted this opportunity and picked and recommended Zee Entertainment

Enterprises (ZEEL) multiple times to our investors as an investment idea since the price of Rs. 170 in 2012.

(Now stock price has surged to Rs.520)

As a part of this report, we are initiating coverage in three companies namely and TV Today Networks, UFO

Moviez and Balaji Telefilms. These companies are poised for higher than usual growth and/or are on cusp of

some innovation which can change their fortunes.

PCG RESEARCH


The First Stock we recommend TV Today Networks.

The leadership position of Aaj Tak as the No. 1 News Channel for the last 15 years in a row since inception

has contributed to the growth in advertising revenues. The revamped English news channel, India Today has

shown stellar growth and has already become the No. 2 English News channel in less than a year since

launch.

The new rating currency of BARC Rating System has ranked channels like Aaj Tak, India Today Television,

Tez and Dilli Aaj Tak extremely favorably. This new reliable rating system will lead to disruptions and

differentiation in advertising revenues between various players and we expect robust ratings to lead to

superior growth in revenues for market leaders like TV Today.

Selling its Radio business and focusing on its core new business augers well for the company.

The Second stock we recommend UFO Moviez.

It is India’s largest satellite-based, digital cinema distribution network and in-cinema advertising platform in

terms of number of screens. By reducing distribution costs, providing reach to a wide network, providing a

faster method of delivery of content and reducing piracy through encryption and other security measures, it

has revolutionized the distributor segment the cinema business value-chain.

Using technology, their products like Club Cinema provides movie screenings of recently released films in

clubs and community centers at private screens, such as remote industrial townships, corporate auditoriums,

educational institutions and other leisure and entertainment complexes.

The Final stock we have picked up Balaji Telefilms Ltd.

Ekta Kapoor - the undisputed queen of daily soap operas led Balaji Telefilms is ruling roost on small screens

for decades and produced over 15,000 hours of television content, the company is aiming that three different

segments – TV, Movies and Digital platform (ALT) to contribute equally to revenues by 2020.

Content creators companies like Balaji who are hitherto dependent on other Business players (B2B) for

delivery of their products can now think of connecting with their ultimate consumers directly (B2C) with the

help of new distribution mediums like Internet. The adaption rates in digital world are meteoric. Digital

channel – ALT Digital is slated for launch later this year. Company hopes to monetize the potential of on-

demand entertainment on digital platforms by catering to content across mobiles, computers, tablets, smart

TVs and game stations.

PCG RESEARCH


Industry CMP Recommendation Buying Range Target Time Horizon

Broadcasting & Cable TV Rs. 303 BUY Rs. 303- 275 Rs. 345 - 388 12 months

HDFC Scrip Code TVTODA

BSE Code 532515

NSE Code TVTODAY

Bloomberg TVTN IN

CMP as on 16 Sep’16 303

Equity Capital (Rs Cr) 29.8

Face Value (Rs) 5

Equity O/S (Cr) 5.96

Market Cap (Rs cr) 1805

Book Value (Rs) 89

Avg. 52 Week Volumes

122337

52 Week High 351

52 Week Low 221

Shareholding Pattern (%)

Promoters 57.2

Institutions 12.1

Non Institutions 30.7

Kushal Rughani [email protected]

TV Today with its flagship channel Aaj Tak has been able to maintain its dominant position in the

fiercely competitive Hindi news segment for over a decade. The news segment, directly targeting

“decision makers” in the family, enjoys a good portion of the advertisement share, which is

expected to rise even further as literacy and income levels rise. With digitisation in phase III

and IV in tier II and III cities, TV Today would be able to better monetise its reach as it enjoys a

far stronger position in the smaller cities and towns in the Hindi speaking belt. We expect 15%

revenue and 23% PAT cagr over FY16-19E on the back of strong revenue growth and

improvement in operating performance. The company is debt free with ~Rs170cr cash and cash

equivalents on its balance sheet. EBITDA margins are expected to expand 220bps to 29% with

the exit from radio business. We value the stock at ~13x of FY19E EPS of ~Rs29 and ascribe

price targets of Rs345 and Rs388 over the next 12 months.

Investment Rationale

Aaj Tak continues to remain Market Leader, India Today catching up at rapid pace

Aaj Tak has been able to consistently maintain its dominant position with~25-30% viewership market share

among top five Hindi news channels. Though company faces tough competition from other players but

through advertising campaigns and further fine-tuning its content it has gained back its No.1 position, and

has been the consistent market leader. The English news channel, India Today continues to show traction

post several renowned journalists such as Karan Thapar & Rajdeep Sardesai coming on board. India Today’s

ad revenues have been growing at a stellar pace and now form ~20% of broadcasting ad revenues. Apart

from the flagship channel, the company will also benefit from increasing utilisations in the English news

channel. TV Today Network is one of India's leading Hindi-English news television networks. The company's

operating segments include television broadcasting through which the company operates four news

channels, which include Aaj Tak, India Today (earlier known as Headlines Today), Tez and Dilli Aaj Tak. We

expect revenues to grow at 12% yoy, 17% yoy and 15% yoy to Rs611cr, Rs717cr and Rs825cr in FY17E,

FY18E and FY19E respectively.

PCG RESEARCH

INVESTMENT IDEA 17 Sep 2016

TV Today Networks

mailto:[email protected]

PCG RESEARCH


News being non-proprietary and largely non-exclusive in nature, the content is largely similar among various

news channels. In such a case, the ability to break the news first or give detailed coverage of the event by

sending a team to the source becomes the differentiating point. In such a case, where the content is highly

homogeneous, usually the top one or two players are key beneficiaries. On those lines, Aaj Tak has been able

to maintain a leadership position in the last decade. With a viewership share of ~18.5% in the Hindi news

segment and ~8.7% of the overall news segment, The demographic set-up augurs well for TV Today with its

offerings in terms of Hindi news channels, which is also reflected in its higher share of advertisement

revenue.

Q1 Update

TV Today posted revenue growth of 9% yoy to ~Rs136cr, Advertisement revenues continued to remain

healthy with major growth driven by English Channel. The FM radio broadcasting arm revenues continued to

post a decline of 45.0% YoY and came in at Rs1.3cr as a result of sale of four stations to ENIL in Q2FY16

EBITDA was at Rs37cr with margins of 26.9%; company reported PAT of Rs22cr, +23% yoy.

Radio business

Under the brand Oye 104.8 FM. The company had a presence in the six cities of Mumbai, Delhi, Kolkata,

Amritsar, Jodhpur and Patiala. However, the company has been unable to keep pace with its peers in the

radio segment and has been experimenting with different formats. It had started off as Meow 104.8 FM for

women in 2007. However, since the strategy did not click with listeners, the company re-branded itself to

Oye 104.8 FM based on the “filmy” format. In Sep 2015, company has sold off 4 Radio Stations for cash

consideration of Rs 4cr. The stations include Jodhpur, Amritsar, Patiala and Shimla which contributed Rs3cr

as revenues in FY15. Radio’s current contribution to the overall revenues of the company was minuscule at

2-3%, however it was loss making business. The sale of the remaining three stations in Delhi, Mumbai &

Kolkata denied approval by the MIB and is still pending. The company has, for the time being, entered into

an airtimes sales agreement with ENIL, which will help it in gaining a wider network in terms of airtime sales.

PCG RESEARCH


TV Today enjoys trust of masses

News as a business has very unique dynamics, as it is largely nonproprietary and non-exclusive in nature.

Moreover, news as a domain, creates a sizeable impact on the society by not only creating awareness but

also influencing decisions and shaping opinions. Hence, it becomes imperative for news channel to be

unbiased and disseminate authentic news. Trust becomes the most important parameter to judge the

efficiency of a news channel. TV Today enjoys excellent brand loyalty and has emerged as the viewer’s

choice news channel. There are larger players with deeper pockets such as Zee News, ABP News and ETV

News. However, TV Today still continues to lead the major news channels in the Hindi space, owing to its

credibility and quality.

Financial performance

TV Today has reported a strong ~18% CAGR in top-line due to strong advertising revenue growth over the

past three years. We expect the company to continue to report healthy top-line growth on back of strong

growth in advertisement revenue and also subscription revenue with digitalization of phase III & IV. On the

operating front, we expect margin to improve owing to the price hike initiated in the ad segment and exited

loss making radio business a year back. Benefits would also be availed on account of the base effect as a

one-time expense of ~16cr towards rebranding of the English new channel was incurred last year. We expect

15% revenue and 23% PAT cagr over FY16-19E on the back of strong revenue growth and improvement in

operating performance. The company is debt free with ~Rs170cr cash and cash equivalents on its balance

sheet. TV Today has been able to take a hike in ad yields owing to its leadership position in the Hindi news

genre. In addition, there has been incremental revenue flow from the English Channel India Today, which has

been able to improve its ranking in the English news genre. We expect TV Today to post 18% CAGR in

EBITDA with 15% CAGR in revenue in FY16-19E. EBITDA margins are expected to expand 220bps to 29%

with the exit from radio business. We value the stock at ~13x of FY19E EPS of ~Rs29 and ascribe price

targets of Rs345 and Rs388 over the next 12 months.

Key Risks

Loss of leadership in viewership could affect the company’s advertisement revenue.

Overall slowdown in the Indian economy could lead to a cut in ad spend allocations by corporates

which would be negative.

Any delay in digitalization could impact the company’s subscription revenue growth.

PCG RESEARCH


Financial Summary (Rs cr)

FY14 FY15 FY16 FY17E FY18E FY19E

Net Sales 389 477 546 611 717 825

EBITDA 109 132 146 166 209 240

PAT 62 81 94 113 151 174

EPS (Rs) 10.3 13.6 15.8 19.0 25.3 29.2

P/E (x) 29.4 22.2 19.1 16.0 12.0 10.4

EV / EBITDA (x) 14.1 11.7 10.5 9.3 7.3 6.4

RoE (%) 17.5 19.6 19.2 19.2 21.9 21.1 Source: Company, HDFC sec Research

PCG RESEARCH


Revenue to post 15% cagr over FY14-19E

389

477546

611

717

825

100

200

300

400

500

600

700

800

900

1000


Rs

Cr

Source: Company, HDFC sec Research

Operating Cash Flow

32

68

60

92

7471

25

50

75

100

125



EBITDA and PAT trend over FY14-19E

0

50

100

150

200

250

300

FY14 FY15 FY16 FY17 FY18E FY19E

EBITDA PAT


Robust return ratios (RoE/RoCE)

10.0

15.0

20.0

25.0

30.0

FY15 FY16 FY17E FY18E FY19E

RoE RoCE


PCG RESEARCH


Income Statement (Consolidated)

(Rs Cr) FY14 FY15 FY16 FY17E FY18E FY19E

Net Revenue 389 477 546 611 717 825

Growth (%) 24.4 22.5 14.5 12.0 17.3 15.1

Operating Expenses 281 345 400 445 508 586

EBITDA 109 132 146 166 209 240

Growth (%) 211.1 21.0 11.0 13.4 26.2 14.4

EBITDA Margin (%) 28.0 27.6 26.8 27.1 29.2 29.0

Depreciation 24 30 31 28 28 31

EBIT 85 102 116 138 181 209

Other Income 12 23 32 36 41 48

Interest 4 2 0 1 0 0

PBT 91 123 147 169 220 253

Tax 29 42 53 58 71 81

RPAT 62 81 94 113 151 174

Growth (%) 430.2 32.2 16.1 19.8 33.5 15.5

EPS 10.3 13.6 15.8 19.0 25.3 29.2


Balance Sheet (Consolidated)

(Rs Cr) FY14 FY15 FY16 FY17E FY18E FY19E

SOURCE OF FUNDS

Share Capital 30 30 30 30 30 30

Reserves 349 420 502 594 716 855

Shareholders' Funds 379 450 532 624 746 885

Long term Debt 17 18 13 8 5 0

Net Deferred Taxes -16 -16 -15 -15 -15 -15

Other current Liabs 48 34 40 47 55 68

Long Term Provisions & Others 11 11 13 18 21 23

Total Source of Funds 439 497 582 751 881 997

APPLICATION OF FUNDS

Net Block 213 201 186 193 209 225

Intangibles 4 38 33 30 27 25

Investment 46 46 40 50 70 84

Long Term Loans & Advances 6 6 28 34 41 49

Total Non-Current Assets 269 291 287 306 347 383

Inventories 0 0 0 0 0 0

Trade Receivables 110 137 157 179 205 222

Cash & Equivalents 57 95 161 243 282 288

Other Current Assets 48 40 53 61 130 227

Total Current Assets 215 272 371 483 616 737

Trade Payables 53 61 71 80 94 109

Other Current Liab & Provisions 56 45 53 62 78 93

Total Current Liabilities 108 107 124 143 172 202

Net Current Assets 146 165 286 445 534 636

Total Application of Funds 439 497 582 751 881 997 Source: Company, HDFC sec Research

PCG RESEARCH


Cash Flow Statement (Consolidated) (Rs Cr) FY14 FY15 FY16 FY17E FY18E FY19E

Reported PBT 91 123 147 169 220 253

Non-operating & EO items -12 -23 -32 -36 -41 -48

Interest Expenses 4 2 0 1 0 0

Depreciation 24 30 31 28 28 31

Working Capital Change -28 -12 -19 -14 -63 -84

Tax Paid -29 -42 -53 -58 -71 -81

OPERATING CASH FLOW ( a ) 32 68 60 92 74 71

Capex -11 -5 4 -15 -29 -37

Free Cash Flow 39 73 78 77 46 34

Investments 0 0 5 -10 -20 -14

Non-operating income 12 23 32 36 41 48

INVESTING CASH FLOW ( b ) 1 18 41 11 -8 -3

Debt Issuance / (Repaid) -17 0 0 0 0 0

Interest Expenses -4 -2 0 -1 0 0

FCFE 18 72 78 75 46 34

Share Capital Issuance 0 0 0 0 0 0

Dividends -7 -11 -12 -19 -27 -33

Financing Cash Flow -28 -12 -12 -21 -27 -34

Net Cash Flow (a+b+c) 5 74 89 82 39 34 Source: Company, HDFC sec Research

Key Ratio (Consolidated)

Key Ratios (%) FY14 FY15 FY16 FY17E FY18E FY19E

EBITDA Margin 28.0 27.6 26.8 27.1 29.2 29.0

EBIT Margin 21.8 21.3 21.2 22.5 25.3 25.3

APAT Margin 15.8 17.0 17.3 18.5 21.1 21.1

RoE 17.5 19.6 19.2 19.2 21.9 21.1

RoCE 22.7 23.8 22.9 23.1 25.7 24.9

Solvency Ratios

Net Debt/EBITDA -0.4 -0.6 -1.0 -1.5 -1.7 -1.9

Net D/E -0.1 -0.2 -0.3 -0.4 -0.5 -0.5

Interest Coverage 30.3 87.9 731.4 126.1 1073.5 3193.7

Per Share Data

EPS 10.3 13.6 15.8 19.0 25.3 29.2

CEPS 14.4 18.7 21.0 23.7 30.0 34.4

BV 63.5 75.4 89.2 104.6 125.1 148.4

Dividend 1.0 1.5 1.8 2.8 3.9 4.8

VALUATION

P/E 29.4 22.2 19.1 16.0 12.0 10.4

P/BV 4.8 4.0 3.4 2.9 2.4 2.0

EV/EBITDA 14.1 11.7 10.5 9.3 7.3 6.4

EV / Revenues 4.0 3.2 2.8 2.5 2.1 1.9

Dividend Yield (%) 0.3 0.5 0.6 0.9 1.3 1.6 Source: Company, HDFC sec Research

PCG RESEARCH


50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

Sep

-15

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Price History

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year. Sell: Stock is expected to decline by 10% or more in the next 1 Year.

PCG RESEARCH



Specialty Retail Rs. 465 BUY Rs. 465 - 430 Rs. 510 - 555 3-4 quarters

Vanillin to be the key growth driver

HDFC Scrip Code UFOMOV

BSE Code 539141

NSE Code UFO

Bloomberg UFOM IN



Face Value (Rs) 10

Equity O/S (Cr) 2.59


Book Value (Rs) 203


105189

52 Week High 625

52 Week Low 380


Promoters 28.9

Institutions 51.5



UFO Moviez is India’s largest digital cinema distribution network with a screen network of

~6636 worldwide, including 4940 screens in India and remaining worldwide. The distribution

business constitutes about 51% of its revenues and has grown at 40% CAGR in FY12-15 to

Rs232crore. UFO also provides digital equipment to exhibitors for lease/sale, which forms ~20%

of its revenues. UFO expects the stream to show further traction as minutes of ad sold and yields

increase. The average minutes of ad (sold on a per screen per show basis) has been on the rise,

increasing from 2.02 minutes in FY11 to 3.4 minutes in FY15 and ~4 minutes as on Jun 2016

bolstered by growth in ad minutes. This led to an increase in ad revenues from Rs32 crore to

Rs117 crore over the same time period. The time of ad per show in single screens still lags

behind the average ad minutes in multiplexes, which are nearly 4.5x that of single screens. As

the ad minutes in UFO screens begin to increase, it will have a multiplier effect on revenues. As

per the management increase in ad yields would come once ad minutes reach maturity; the

combined impact of the ad volume and which could give revenue potential of ~>Rs500crore to

ad revenues over the long term. We expect robust growth momentum to continue with ~13%

and 25% cagr respectively over FY16‐18E driven by growth from Ad Revenues and content

segment. We expect margins to ramp up slowly to ~32%. UFO had come out with an IPO at

Rs625 and issued 96 lakh equity shares through offer for sale and raised Rs600cr in Apr 2015. At

the current market price of Rs465, the stock trades at ~13x FY18E EPS. We believe UFO has got

upside potential given the accompanying business fundamentals. We initiate as BUY on the stock

at Rs465 and add on declines to Rs430 and with price targets of Rs510 and Rs555 over the next

3-4 quarters.


Innovative business models may be growth drivers in future

UFO has created a pan-India, high-impact, in-cinema advertising platform, generally with long-term

advertising rights, with respect to 3,713 screens, under a win-win revenue share deals with the theatres. As

at March 31, 2016, UFO has an aggregate seating capacity of approximately 1.78mn viewers and a reach of

over 1,900 locations across India. During the year, UFO’s in cinema Advertisement platform delivered an

estimated viewership of over 10mn on a monthly basis. UFO’s in-cinema advertising platform enables

advertisers to reach a targeted, captive audience with high flexibility and control over the advertising

process.

PCG RESEARCH


UFO Moviez


PCG RESEARCH


UFO is leveraging its current infrastructure on new business models such as Caravan Talkies - a sun down

show in media dark areas, which would be a source of advertisement revenues. The company is targeting a

van fleet of 300 from 80 currently and expects traction owing to the novelty of the offering. The segment,

which commands 9-10x premium to in-cinema ad rates is expected to aid margins.

Distribution income

UFO delivers movie content through (i) satellite-based cinema distribution network using UFO-M4 platform

and (ii) D-Cinema network. It currently has a 54% distribution screen market share in India with ~4940

screens on its network. As the company was able to consolidate its position by adding a number of screens

on its network, its distribution revenues has grown at 40% CAGR over FY12-15. Multiplexes like PVR and

INOX are adding up to about 60-70 screens per year while the segment is directly correlated to the number

of screens in its kitty.

Exhibitor rental and sales business

UFO earns rental revenue from renting, either directly or through its franchisees, of its digital cinema

equipment to exhibitors for use on their premises. The income comes in two forms: lease and sale. The non-

DCI (Digital Cinema Initiative) equipment are fixed-periodic fee contracts based on 10 years with the option

to terminate for convenience only after four years. In the D-Cinema business, exhibitors rent D-Cinema

servers and projectors, under contracts for a fixed-monthly fee. The company also sells digital cinema

equipment, as well as related consumables.

The process of digitization picked up in India in 2005-06 when UFO entered the Indian movie Industry after it

deployed its proprietary UFO M4 technology. The content owners could now digitally reach a large number of

theaters on the UFO M4 platform, after making a usage based fee payment to UFO. Digital cinema began to

eclipse analog prints starting 2005-06, physical prints faced obsolescence and were eliminated by 2013 in

India. The digitisation of cinema infused new life into the Film Industry. The cost of digitally reaching theaters

was significantly lower than the cost of analog prints. Movies started releasing simultaneously in theatres

across the country ensuring higher revenue collection for content owners. UFO’s digitisation and delivery

model and its UFO M4 platform has been a key driver of the digital revolution which the Indian Film industry

witnessed in the past decade. Directly and indirectly, UFO has played an unseen but significant role in

enhancing the Indian movie industry in quantity and quality.

PCG RESEARCH


During the fiscal year 2016, UFO digitally delivered 1,738 movies in 25 languages to 5,034 screens with an

aggregate seating capacity of approximately 2.15mn viewers spread across 30 States and Union territories in

India and in Nepal. Since the beginning of its operations, UFO has digitally delivered more than 10,500

movies in India as at March 31, 2016. As on March 31, 2016, UFO’s global network spans 6,689 screens

worldwide, which includes 1,655 screens across the Middle East, Israel, Mexico and the USA in addition to

screens in India and Nepal mentioned above. UFO, through its theatrical service offerings, adds value to all

stakeholders in the cinema value chain, as depicted above:

PCG RESEARCH


UFO operates India’s largest satellite-based, digital cinema distribution network in terms of the number of

screens using its UFO-M4 platform, as well as India’s largest D-Cinema network in terms of the number of

screens. Your Company relays / delivers movies to theatres across the country in MPEG 4 format, using

satellites (E-Cinema), as well as in JPEG 2000 (D-Cinema) format using physical devices through its

subsidiary Scrabble Entertainment Limited.

To further propel the growth in the foreseeable future, Company has introduced new strategic initiatives like

Caravan Talkies, NOVA CINEMAS and hyper-local advertising solution - UFO Framez mainly driven by

innovation.

UFO-M4 Technology

UFO-M4 is your Company’s satellite-based, E-Cinema movie delivery technology platform. UFO-M4

technology platform provides an end-to-end platform for the satellite delivery of movies. UFO-M4 technology

compresses and encrypts digital movie files prior to distributing them across UFO’s satellite based network.

Caravan Talkies and Club Cinema

Caravan Talkies, housed in Valuable Digital Screens Private Limited (VDSPL), a subsidiary of your Company,

provides movie screenings with low capital expenditure in the under-penetrated, media-dark areas of rural

India through its cinema-on-wheels solution, creating a unique opportunity for advertisers to reach captive

audiences. Currently, movies are screened free to viewers and Caravan Cinema derives its revenues through

advertising. This is an effective advertisement platform for companies targeting rural markets. Club Cinema

provides movie screenings of recently released films in clubs and community centers at private screens, such

as remote industrial townships, corporate auditoriums and educational institutions. By providing a complete

digital cinema solution to such customers, UFO is able to reach an untapped and niche segment of the Indian

exhibition sector.

NOVA CINEMAS

VDSPL, under the NOVA CINEMAS brand, is encouraging local entrepreneurs to own and operate NOVA

CINEMAS branded theatres in various part of the country. VDSPL also grant rights to use the brand ‘NOVA

CINEMAS’ to the local entrepreneurs for a fee, and will take end to end responsibility of providing theatrical

technologies as well as sourcing of film content. Under this asset light initiative, VDSPL aims to recreate the

screen growth in non-metro regions across India. Currently, NOVA CINEMAS has shortlisted 3 franchisees

with 2 screens each, one each from Maharashtra, Gujarat and Punjab. These screens are expected to be

operational during the fiscal year 2016-17. NOVA CINEMAS is also in negotiation with 4 franchisees in

Maharashtra and Punjab. Further, it has received notable number of enquiries from other parts of India.

PCG RESEARCH


Expect robust growth momentum with ~13% revenue and 25% PAT cagr over FY16-18E

UFO has posted revenue and PAT cagr of 16% and 7% respectively over FY14‐16 and we expect growth

momentum to continue with ~13% and 25% cagr respectively over FY16‐18E driven by growth from Ad

Revenues and content owners’ revenue. We expect margins to ramp up slowly to ~32%. At the current

market price of Rs465, the stock trades at ~13x FY18E EPS. We like the underlying business contours such

as strong revenue growth coupled with stable margin profile and healthy free cash flows and RoE/RoCE of

~20‐25%. We believe UFO has got upside potential given the accompanying business fundamentals. We

initiate as BUY on the stock at Rs465 and add on declines to Rs430 and with price targets of Rs510 and

Rs555 over the next 3-4 quarters.

Key risks:

Slower-than-expected pick up in in-screen ads, and Alternate technologies disrupting UFO’s movie delivery

model


FY14 FY15 FY16 FY17E FY18E

Net Sales 425 480 571 638 730

EBITDA 133 161 183 194 228

PAT 51 47 59 66 93

EPS (Rs) 19.8 18.1 22.8 25.5 35.8

P/E (x) 24.2 26.4 21.0 18.8 13.4

EV / EBITDA (x) 9.4 7.7 6.8 6.4 5.5

RoE (%) 13.4 10.8 12.0 12.1 16.2


PCG RESEARCH


Revenue to post 13% cagr over FY16-18E

425480

571638

730

100

200

300

400

500

600

700

800

900

1000


Rs

Cr


EBITDA and PAT to witness strong momentum

25

75

125

175

225

275

FY14 FY15 FY16 FY17 FY18E

EBITDA PAT


Return Ratios (RoE/RoCE) (%)

0.0

5.0

10.0

15.0

20.0

25.0

FY15 FY16 FY17E FY18E

RoE RoCE


PCG RESEARCH


Advertisement revenues trend

100

117

158

191

230

50

150

250


Rs

Cr


Operating Cash Flow (Rscr) to witness Uptick

138129

96

121

137

50

100

150

200



Revenue Split (%)

47.2

52.0 52.2

46.9 45.4 44.4

32.2

24.2 22.724.5 24.7 24.1

20.6

23.825.1

28.6 29.9 31.5

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

55.0


Rev From Content Owners Rev from Exhibitors Advertisement


PCG RESEARCH



(Rs Cr) FY14 FY15 FY16 FY17E FY18E

Net Revenue 425 480 571 638 730

Growth (%) 26.0 13.0 19.0 11.8 14.3

Operating Expenses 292 319 388 444 501

EBITDA 133 161 183 194 228

Growth (%) 22.1 21.3 13.9 5.7 17.8

EBITDA Margin (%) 31.2 33.5 32.1 30.4 31.3

Depreciation 64 77 77 78 74

EBIT 69 84 106 116 155

Other Income 1 1 2 7 9

Interest 20 20 14 17 15

PBT 50 65 94 106 149

Tax -1 18 35 40 52

RPAT 51 47 59 66 93

Growth (%) 35.7 -8.4 25.8 12.1 40.0

EPS 19.8 18.1 22.8 25.5 35.8




SOURCE OF FUNDS

Share Capital 26 26 26 26 26

Reserves 371 427 489 527 588

Shareholders' Funds 412 460 526 564 631

Long term Debt 100 56 44 34 53

Net Deferred Taxes -12 -19 -28 -28 -28

Other current Liabs 44 57 49 52 70

Long Term Provisions & Others 1 1 1 5 5

Total Source of Funds 545 554 592 627 732


Net Block 361 311 295 288 277

Goodwill 133 168 172 172 172

Investment 5 6 8 21 44

Long Term Loans & Advances 42 53 48 62 88

Total Non-Current Assets 541 538 523 543 581

Inventories 10 11 12 14 16

Trade Receivables 91 105 152 173 200

Cash & Equivalents 52 58 67 72 98

Other Current Assets 27 37 64 86 142

Total Current Assets 180 211 294 345 456

Trade Payables 48 66 89 96 105

Other Current Liab & Provisions 134 134 139 154 192

Total Current Liabilities 183 200 228 250 296

Net Current Assets -3 12 66 96 160

Total Application of Funds 545 554 592 627 732 Source: Company, HDFC sec Research

PCG RESEARCH


Cash Flow Statement (Consolidated) (Rs Cr) FY14 FY15 FY16 FY17E FY18E

Reported PBT 50 65 94 106 149

Non-operating & EO items -1 -1 -2 -7 -9

Interest Expenses 20 20 14 17 15


Working Capital Change 4 -14 -53 -25 -37

Tax Paid 1 -18 -35 -40 -52

OPERATING CASH FLOW ( a ) 138 129 96 128 139

Capex -145 -27 -64 -63 -67

Free Cash Flow -7 102 32 66 73

Investments -3 -1 -2 -13 -23

Non-operating income 1 1 2 7 9

INVESTING CASH FLOW ( b ) -147 -27 -64 -69 -81

Debt Issuance / (Repaid) 31 -44 -12 -10 19

Interest Expenses -20 -20 -14 -17 -15

FCFE 4 38 5 38 76

Share Capital Issuance 0 0 0 0 0

Dividends -1 -2 -24 -27 -36

Financing Cash Flow 10 -66 -51 -55 -33

Net Cash Flow (a+b+c) 0 36 -19 5 26 Source: Company, HDFC sec Research


Key Ratios (%) FY14 FY15 FY16 FY17E FY18E

EBITDA Margin 31.2 33.5 32.1 30.4 31.3

EBIT Margin 16.3 17.5 18.6 18.2 21.2

APAT Margin 12.1 9.8 10.3 10.4 12.7

RoE 13.4 10.8 12.0 12.1 16.2

RoCE 13.6 14.9 17.8 18.3 21.9

Solvency Ratios

Net Debt/EBITDA 0.9 0.4 0.1 -0.2 -0.4

Net D/E 0.3 0.1 0.0 -0.1 -0.1

Interest Coverage 6.7 8.1 12.8 11.1 15.0

Per Share Data

EPS 19.8 18.1 22.8 25.5 35.8

CEPS 44.3 47.9 52.7 55.5 64.1

BV 159.0 177.6 202.9 217.8 243.8

Dividend 0.0 0.0 8.0 9.0 12.0

VALUATION

P/E 24.2 26.4 21.0 18.8 13.4

P/BV 3.0 2.7 2.4 2.2 2.0

EV/EBITDA 9.4 7.7 6.8 6.4 5.5

EV / Revenues 2.9 2.6 2.2 2.0 1.7

Dividend Yield (%) 0.0 0.0 1.7 1.9 2.5 Source: Company, HDFC sec Research

PCG RESEARCH


100.0

200.0

300.0

400.0

500.0

600.0

700.0

Sep

-15

Oct

-15

No

v-1

5

De

c-1

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Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Price History

Rating Definition:


PCG RESEARCH



Broadcasting & Cable TV Rs. 85 BUY Rs. 85 - 74 Rs. 99 - 117 3-4 quarters

HDFC Scrip Code BALTEL

BSE Code 532382

NSE Code BALAJITELE

Bloomberg BLJT IN



Face Value (Rs) 2

Equity O/S (Cr) 7.6


Book Value (Rs) 69


288109

52 Week High 150

52 Week Low 83


Promoters 40.9

Institutions 23.4



Balaji Telefilms Ltd established in 1994, has emerged as one of the leading providers of

entertainment in India. The company is primarily engaged in the production of television content

across five languages (Hindi, Telugu, Tamil, Malayalam and Kannada) and have produced > 100

shows till date. Balaji Telefilms has set a benchmark in television programming and was one of

the very first organizations to venture into the Hindi General Entertainment Channel (GEC) and

regional GEC space. Balaji has specialised in formatted programming that can be adapted for

languages around the nation as well as abroad. One notable success has been Kyunki Saas Bhi

Kabhi Bahu Thi known as the master of all Indian soap operas and also for setting a golden

period on Indian television. Other examples include Kahaani Ghar Ghar Kii, Kasautii Zindagii

Kay, Bade Acche Lagte Hain, Kya Hua Tera Vaada, and Jodha Akbar etc. In recent years company

has been expanding its reality shows output with shows such as titles such as Box Cricket

League on Sony TV. Balaji has posted subdued performance with revenues declined from

Rs407cr to Rs293cr in FY16 owing to less contribution from Movies segment. Balaji’s Television

revenue has posted robust revenue growth as it increased from Rs135cr (FY14) to Rs270cr in

FY16. We expect robust growth momentum with ~40% revenue cagr along with strong

turnaround in operating margin profile from operating loss of Rs22cr in FY14 to Rs45cr EBITDA

in FY18E. The stellar operating performance would drive profitability as we expect bottom line to

grow almost two and half fold over FY16-18E to Rs44cr. Company had raised ~Rs150cr through

preferential allotment at ~Rs140 in March 2016. We believe ALT could be game changer for the

company over the next 3-5 years. We believe company would post strong revenue growth along

with strong turnaround in operational performance and that in turn would drive profit growth.

By 2020, company targets revenue splits to be evenly distributed between TV, Movies and

Digital. By 2025, management aims Digital platform to be much bigger than Movies and TV

business. At the current market price of Rs85, the stock trades at attractive ~15x FY18E EPS and

It is to be noted that company is virtually debt free along with that it had cash and equivalents

of Rs188cr as on FY16. We assign PE of 20x on FY18E basis and initiate as BUY on the stock at

Rs85 and add on dips till Rs74 with target price of Rs99 and Rs117 over the next 12 months.


Balaji Telefilms

PCG RESEARCH


https://en.wikipedia.org/wiki/Kyunki_Saas_Bhi_Kabhi_Bahu_Thi

https://en.wikipedia.org/wiki/Kyunki_Saas_Bhi_Kabhi_Bahu_Thi

https://en.wikipedia.org/wiki/Indian_soap_opera

https://en.wikipedia.org/wiki/Indian_television

https://en.wikipedia.org/wiki/Kahaani_Ghar_Ghar_Kii

https://en.wikipedia.org/wiki/Kasautii_Zindagii_Kay

https://en.wikipedia.org/wiki/Kasautii_Zindagii_Kay

https://en.wikipedia.org/wiki/Bade_Acche_Lagte_Hain

https://en.wikipedia.org/wiki/Kya_Hua_Tera_Vaada

https://en.wikipedia.org/wiki/Jodha_Akbar

https://en.wikipedia.org/wiki/Reality_shows

https://en.wikipedia.org/wiki/Box_Cricket_League_-_Punjab_(BCL_Punjab)

https://en.wikipedia.org/wiki/Box_Cricket_League_-_Punjab_(BCL_Punjab)

https://en.wikipedia.org/wiki/Set_india

PCG RESEARCH



Balaji Telefilms: Overview

Balaji Telefilms has a strong track record of producing quality content for Hindi GEC’s and have successfully

produced over 15,000 hours of television content in Hindi, Tamil, Telugu, Kannada, Malayalam and Bengali

entertainment genre. Programs produced and created by the company has gained immense popularity in the

past. Creativity and understanding the need of the audience has been the core reason for the popularity of

Balaji’s serials. We believe the company will continue to produce quality content for mass viewers and will be

able to reap the benefits of digitization and increased demand for creative content. Balaji’s business model

saw a paradigm shift with its venture into movies. Nevertheless, the quality of content for television was

never compromised. Besides, Balaji possesses 23 modern sets and 37 editing suites in India. The company

also has a presence in the Indian movies segment, with activities ranging from production to distribution of

films under their motion pictures banner and 100% subsidiary Balaji Motion pictures Ltd. Despite being a

relatively new player in this segment, the firm has managed to garner a formidable degree of recognition

from the established studios. As of today Balaji has been able to carve a niche for itself in the media and

entertainment sector by consistently delivering top quality content to a vast diverse audience all over India.

Now, ALT Digital is gearing up as Balaji’s first large-scale consumer facing brand. It will enable Balaji to step

into the consumer business – into the futuristic digital space by leveraging its core creative expertise.

Through ALT Digital, company would be able to build a strong and valuable B2C brand.

ALT Digital to be game changer for the company

Company had raised Rs150cr by issuing shares via preferential allotment to 5 marquee investors at ~Rs140

in March 2016. The promoters holding fell to 40.9% after the share issuance. The proceeds would be used for

ALT Digital Media Entertainment – the foray into B2C digital content business segment. ALT will create its

own differentiated, original digital content platform for the connected ecosystem including gaming, tablets,

smart TV etc. With this Rs150cr company is on a fast track to roll out ALT Digital OTT platform. The company

has high cash and cash equivalents of Rs190cr as on FY16 (25% of market cap), which is invested in mutual

funds; as company would spend money in ALT its cash position will reduce to Rs70cr in FY18E. ALT Digital is

currently in prelaunch phase with expenses mainly account of content, technology etc. The company has so

far invested ~Rs20cr in the digital foray and aims to spend Rs250-300cr over the next 3 years. Management

expects the launch of ALT Digital during 2017. Digital is the way forward and the whole space is growing very

fast. By 2020, company targets revenue splits to be evenly distributed between TV, Movies and Digital. By

2025, management aims Digital platform to be much bigger than Movies and TV business.

PCG RESEARCH


Increasing Mobile, Broadband penetration to drive growth momentum

India is likely to witness a data revolution in the coming future, which holds good for all content rich

businesses. The delivery platforms would be amplified creating more demand for the content. Mobile wireless

internet users have already reached about 230 million users at the end of March 2014 and the number is

expected to group dramatically. Also, when compared to the global level, India imported the highest number

of smart phones. With the launch of several OTT applications and mobile applications, people can

conveniently watch videos on their cell phones. This opens up more avenues for the delivery of content. TV

Today’s news would also reach such additional platforms, which would open up new avenues for revenue

growth.

Building a strong B2C Brand through ALT

ALT Digital will be Balaji’s first large-scale consumer facing brand. It will enable Balaji to step into the

consumer business – into the futuristic digital space by leveraging its core creative expertise. Through ALT

Digital, company aims to build a strong and valuable B2C brand. The motive is to create value for the group

by redefining the terms of Intellectual Property (IP) ownership and exploiting new avenues of monetisation.

The platform will be a tech play that will enable Balaji to cater to the digital content consumer and creatively

expand from what we specialise in. It will create differentiated, original digital content for 32 different

interfaces spanning mobiles, computers, laptops, tablets, smartphones, game stations, or use an HDMI cable

to mirror the high resolution content on Internet ready TV sets. The content will be available across 9

different speed profiles. We have set up a strong team of highly talented professionals for the digital vertical.

The move reflects the Group’s strategic intent to expand its entertainment expertise by creating enjoyable

and engaging content for a universal audience – those in India and overseas.

The Movies Value Chain

The movie value chain involves producer who produces the content, distributor who distributes the content

from producers to exhibitors and exhibitors including single screen and multiplexes who display content to

viewers. The content moves from producers to exhibitors while revenue flows in the reverse direction. The

box office collection received are shared in various ways between producers, distributors and exhibitors.

Generally multiplexes share 50% of net box office collections with the distributor in the first week, 42.5% in

the second, 37.5% in the third and 30% from the fourth week onwards. In case of single multiplex and single

screen theatres exhibitors share up to ~60% of the net collections with the distributor due to high bargaining

power. Movies business will also drive revenues for the company. We believe movie business solely depends

upon the collections it earn and that drives performance for Balaji Motion Pictures.

PCG RESEARCH


Balaji Telefilms to reap benefits maximum benefits by distributing films

The company was not into distribution till 2012 and used to sell its movies to distributors based on all the

models mentioned above. The company followed the minimum guarantee plus royalty model for “The dirty

picture”, which was a super hit and lost opportunity in terms of potential revenues. The company now

distributes all its films across the Mumbai, and Delhi territories, which account for 50% of the total theatrical

revenues and reap maximum benefits. We believe that the strategy is a bit risky but will lead to outstanding

profits if any movie become a super hit. Out of the 6 movies to be released in 2013 “Shootout at Wadala”

and “Once upon a time in Mumbai 2” were hit movies. Recently company released the movies such as Udta

Punjab and Kya Kool Hain Hum 3, which got good response from viewers.

In the movies business, Company leveraged its franchise value by exploring a sequel and released the adult

comedy Kya Kool Hain Hum-3 in January 2016. In FY17 so far, Balaji Motion has released three movies – the

biopic Azhar, Udta Punjab and the comic caper Great Grand Masti. Two more movies such as – Super Singh

and Half Girlfriend. For FY2017 and FY2018, Company has a slate of 4-5 movies across diverse concepts,

genres and budgets. Balaji aims to emerge as one of the top 3 movie production houses in India, with a

strategic thrust on sequels, and exploring different models of production.

The key difference between a co-produced film and a self-produced film is that the production line

responsibility lies with the co-producer. Typically, once the star cast, budget, script and expected cash

outflow is decided by both Balaji and the co-producer, the co-producer takes the lead in production and

execution. In return Balaji gets to keep the distribution rights and the intellectual property rights of the film.

Also, the company shares revenue in a pre-decided proportion with the co-producer once they recover the

entire cost of the movie including the distribution and marketing cost along with an additional commission for

their investment. The sharing in profits of generally 50:50 in the co-production model but could vary in

certain cases. This model awards both the producers and film makers which result in a quality content and

provides scalability.

Top Executive hiring

Balaji has hired executives from Sony and Viacom18 to lead its digital content unit. In December, it

appointed former Sony Entertainment Television executive Nachiket Pantvaidya as the CEO of ALT Digital.

Last month, it named Ekalavya Bhattacharya, who was earlier with Viacom18, the unit’s chief strategy

officer.

PCG RESEARCH


Forecast Robust ~40% revenue cagr over FY16-18E along with strong turnaround in Operational

performance

Balaji has posted subdued performance with revenues declined from Rs407cr to Rs293cr in FY16 owing to

less contribution from Movies segment. Balaji’s Television revenue has posted robust revenue growth as it

increased from Rs135cr (FY14) to Rs270cr in FY16. We expect robust growth momentum with ~40% revenue

cagr along with strong turnaround in operating margin profile from operating loss of Rs22cr in FY14 to

Rs45cr EBITDA in FY18E. The stellar operating performance would drive profitability as we expect bottom line

to grow almost two and half fold over FY16-18E to Rs44cr. At the current market price of Rs85, the stock

trades at ~15x FY18E EPS and company is virtually debt free along with that it had cash and equivalents of

Rs188cr as on FY16. Company had raised ~Rs150cr through preferential allotment to qualified investors at

~Rs140 in March 2016. The money were raised for investment in ALT Digital platform; gradually company

will invest in the same. Earlier than expected launch and sharp ramp up in revenues from ALT Digital and

would be key positives for the stock. We believe ALT could be game changer for the company over the next

3-5 years. We believe company would post strong revenue growth along with strong turnaround in

operational performance and that in turn would drive profit growth. We assign PE of ~20x on FY18E basis

and initiate as BUY on the stock at Rs85 and add on dips till Rs74 with target price of Rs99 and Rs117 over

the next 12 months.

Key Risks

Any delay in launch of ALT Digital would impact the growth prospects which would in turn negative for

the stock.

Balaji Motion financials heavily depend upon movies that company make and release; the weak movie

collection could impact revenue and profitability.

PCG RESEARCH




Net Sales 407 347 293 422 578

EBITDA -22 7 7 17 45

PAT -17 6 3 19 44

EPS (Rs) -2.3 0.8 0.4 2.5 5.8

P/E (x) -38.9 108.6 204.5 35.6 15.1

EV / EBITDA (x) -29.8 98.5 97.5 39.2 14.6

RoE (%) -4.4 1.6 0.7 3.4 7.7 Source: Company, HDFC sec Research

PCG RESEARCH


Revenue trend (Consolidated)

407

347

293

422

578

100

200

300

400

500

600

700


Rs

Cr


EBITDA and PAT to witness strong momentum (Rscr)

-30

-20

-10

0

10

20

30

40

50

FY13 FY14 FY15 FY16 FY17 FY18E

EBITDA PAT


Segmental revenues projection (Rscr)

50

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250

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350

400

450

500


Balaji Tele Balaji Motion (Movies) + Others


PCG RESEARCH


Balaji (Standalone) Revenues

50

100

150

200

250

300

350

FY13 FY14 FY15 FY16

Rs

Cr


Balaji Standalone Business remains in Profit

5

10

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FY13 FY14 FY15 FY16

Rs

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Realisations per Hour

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FY13 FY14 FY15 FY16

Rs

lakh

s


PCG RESEARCH




Net Revenue 407 347 293 422 578

Growth (%) 119.0 -14.8 -15.6 43.9 37.1

Operating Expenses 429 340 286 405 533

EBITDA -22 7 7 17 45

Growth (%) -376 -130.3 1.1 148.5 169.5

EBITDA Margin (%) -5.4 1.9 2.3 3.9 7.7


EBIT -28 -2 -3 7 32

Other Income 18 11 22 28 34

Interest 1 0 0 0 0

PBT -11 9 19 35 66

Tax 6 3 16 17 25

RPAT -17 6 3 19 44

Growth (%) -219 -135.8 -47 474.8 135.4

EPS -2.3 0.8 0.4 2.5 5.8




SOURCE OF FUNDS

Share Capital 13 13 15 15 15

Reserves 370 369 509 513 536

Shareholders' Funds 383 382 524 529 551

Long term Debt 8 1 5 5 5

Net Deferred Taxes -3 -6 -7 -9 -9

Other current Liabs 19 3 13 20 25

Long Term Provisions & Others 0 0 0 0 0

Total Source of Funds 419 411 535 545 572


Net Block 23 27 35 49 73

Intangibles 1 2 2 2 2

Investment 37 32 32 43 52

Long Term Loans & Advances 66 64 78 82 87

Total Non-Current Assets 126 125 147 176 214

Inventories 70 30 119 103 147

Trade Receivables 39 67 81 96 135

Cash & Equivalents 8 11 17 40 28

Other Current Assets 190 191 228 221 162

Total Current Assets 307 299 445 459 467

Trade Payables 31 36 56 62 74

Other Current Liab & Provisions 22 11 18 28 35

Total Current Liabilities 53 47 73 90 110

Net Current Assets 293 252 372 369 357

Total Application of Funds 419 411 535 545 572 Source: Company, HDFC sec Research

PCG RESEARCH


Cash Flow Statement (Consolidated) (Rs Cr) FY14 FY15 FY16 FY17E FY18E

Reported PBT -11 9 19 35 66

Non-operating & EO items -18 -11 -22 -28 -34

Interest Expenses 1 0 0 0 0


Working Capital Change 33 4 -114 54 6

Tax Paid -6 -3 -16 -17 -25

OPERATING CASH FLOW ( a ) -13 -2 -138 53 26

Capex -1 -16 -15 -34 -49

Free Cash Flow 4 -8 -139 19 -22

Investments -5 5 0 -11 -9

Non-operating income 18 11 22 28 34

INVESTING CASH FLOW ( b ) 12 0 7 -17 -23

Debt Issuance / (Repaid) 0 0 0 0 0

Interest Expenses -1 0 0 0 0

FCFE 3 -8 -139 19 -22

Share Capital Issuance 0 0 2 0 0

Dividends -4 -5 -11 -13 -20

Financing Cash Flow -6 -6 -9 -13 -20

Net Cash Flow (a+b+c) -6 -8 -139 23 -16 Source: Company, HDFC sec Research


Key Ratios (%) FY14 FY15 FY16 FY17E FY18E

EBITDA Margin -5.4 1.9 2.3 3.9 7.7

EBIT Margin -6.8 -0.5 -0.9 1.6 5.6

APAT Margin -4.2 1.8 1.1 4.5 7.7

RoE -4.4 1.6 0.7 3.4 7.7

RoCE -7.1 -0.4 -0.6 1.3 6.0

Solvency Ratios

Net Debt/EBITDA 7.3 -23.5 -27.4 -10.1 -1.9

Net D/E -0.4 -0.4 -0.3 -0.3 -0.2

Interest Coverage -15.6 19.4 - 110.5 297.8

Per Share Data

EPS -2.3 0.8 0.4 2.5 5.8

CEPS -1.7 2.2 1.7 3.8 7.5

BV 50.4 50.3 69.0 69.6 72.5

Dividend 0.4 0.6 1.2 1.5 2.2

VALUATION

P/E -38.9 108.6 204.5 35.6 15.1

P/BV 1.7 1.8 1.3 1.3 1.2

EV/EBITDA -29.8 98.5 97.5 39.2 14.4

EV / Revenues 1.6 1.9 2.2 1.5 1.1

Dividend Yield (%) 0.5 0.7 1.4 1.7 2.5 Source: Company, HDFC sec Research

PCG RESEARCH


50

75

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125

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175

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Price History

Rating Definition:


PCG RESEARCH


I, Kushal Rughani, MBA, author and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 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