UTV Software report by UBS

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UTV Software (Not rated)
Company background
UTV is an integrated media and entertainment company with a presence in: 1)
television; 2) movies; and 3) games and interactive, including online, console
and mobile, game development and publishing and distribution. It is one of the
largest movie production houses in India with 10 movie releases planned for
2010-11.


Key takeaways
􀁑 UTV expects the motion pictures segment to record revenue of Rs4.5bn in
FY11. UTV has adopted a studio approach to movie production and
distribution. It has a large line-up of movies with a mix of large, medium,
and small-budget movies that are in different stages of production. UTV
plans to release around 10-15 movies on average every year for the next two
to three years. UTV plans to pre-sell satellite TV, home video, and music
rights of most movies before release, which should help mitigate risk as these
could account for almost half of the production cost.


􀁑 In its television business, UTV operates in: 1) TV content production; and 2)
broadcasting. UTV highlighted that UTV’s four channels have a reach of 50-
60m homes and subscription revenue contributes ~20% to total broadcasting
revenue. UTV expects broadcasting revenue (ex-syndication) to double to
Rs2.2bn and TV content production revenue to grow around 60% in FY11 to
Rs1.6bn. It expects the broadcasting business to achieve EBITDA breakeven
in FY11.
􀁑 UTV aims to pre-sell at least one large IP in FY11. UTV is in talks with
various companies for a potential pre-sale (likely to be the game El Shaddai,
developed in the company’s Japan studio). UTV expects 3-5 online games
(as part of True Games) to be launched in FY12.
􀁑 Walt Disney currently holds 50.4% stake in the company. However, Walt
Disney’s voting right is restricted to around 32%. UTV Founder (Mr. Ronnie
Screwvala) has a call option to buy back around 19% stake from Walt
Disney at a price of Rs861 per share by November 2012.