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UTV Software -Impressive performance...
On a consolidated basis, UTV Software reported a topline of | 255.9
crore (I-direct estimate of | 293.0 crore) improving 16.0% YoY and 6.7%
QoQ. The growth was on the back of improving revenue from the
television and gaming segment, which grew 15.3% and 116.9% YoY,
respectively. The company reported EBITDA of | 53.4 crore against |
37.7 crore in Q3FY10. EBITDA margins stood at 20.9%, improving 379
bps YoY and 174 bps QoQ. PAT for the quarter stood at | 40.0 crore (Idirect estimate of | 29.2 crore) as compared to | 37.8 crore in Q3FY10.
PAT was higher than our estimates due to lower interest and tax outgo
during Q3FY11.
ƒ Highlights of the quarter
UTV released Guzaarish and Tees Maar Khan during the quarter. The
television segment has shown significant traction driven by growth in
advertisement in the broadcasting and content business with 14
shows on air. It has managed a monthly average of approximately
115 hours of content under management across all channels.
The company completed the development of El Shaddai and would
launch the game in Japan on April 28, 2011 (long holiday week in
Japan). The company has also finalised a couple of merchandising
deals with a jeans company and a toy company in Japan.
Valuation
At the CMP of | 534, the stock is trading at 10.1x FY12E EPS of | 51.4. The
company has a strong movie pipeline slated for FY12E. The interactive
segment is also expected to post exponential growth with handsome
profitability once the owned IPs are launched.
We have valued the stock at 11x FY12 EPS to arrive at a target price of |
565. This implies an upside of 6%. We are upgrading the stock from
REDUCE to ADD.
ƒ Movies
The movie segment continued on the momentum gained in the last
quarter. The company released two movies – Guzaarish and Tees Maar
Khan. Though the overall performance of the movies may not be as
expected, the company had largely de-risked itself with a combination
of pre-sales and committed revenues on account of music, home video,
TV and ancillary revenues prior to the release of these movies.
The movie segment reported revenues of | 107.6 crore contributing
~42.2% of the total revenues as compared to ~50.7% during Q2FY11.
EBIT margins for the quarter were at 25.1% as compared to 37.0% in
Q2FY11 and 40.1% in Q3FY10. We expect the movie segment to
contribute 45.7% and 39.0% of the total topline in FY11E and FY12E,
respectively.
The company has already released two movies – Dhobi Ghat and No
One Killed Jessica in Q4FY11 and would be shortly releasing Saat
Khoon Maaf. The management has guided for a healthy movie slate for
release in FY12.
ƒ Television
The television segment has shown good traction this quarter both in
terms of revenue as well as profitability growth. In terms of content, the
company had 14 shows on air on various channels. It has managed a
monthly average of approximately 115 hours of content under
management across all channels. The broadcasting segment has seen
robust advertisement growth backed by increasing viewership and the
festive season.
This segment reported revenues of | 101.6 crore as compared to | 88.2
crore during the same period last year, growing 15.3% YoY and 24.7%
sequentially. Contribution from this segment to the total topline was
39.8%. The EBIT margin stood at 20.4% as compared to 5.4% in
Q3FY10 and 6.0% in Q2FY11 reflecting that strong ad growth is directly
impacting the profitability.
We expect this segment to report revenues of | 348.5 crore and | 421.3
crore with a contribution of 36.7% and 33.4% to the total topline in
FY11E and FY12E, respectively.
ƒ Gaming and interactive
The gaming segment contributed | 45.9 crore to the topline as
compared to | 35.7 crore in Q2FY11 and | 21.2 crore in Q3FY10. The
revenue improved 28.6% sequentially and 116.9% YoY. The EBIT from
the segment stood at | 10.6 crore while the margin stood at 23.1%.
The company completed the development of El Shaddai and would
launch the game in Japan on April 28, 2011 (long holiday week in
Japan). The company has also finalised a couple of merchandising
deals with a jeans company and a toy company in Japan.
We expect this segment to report revenues of | 147.1 crore and | 335.7
crore, contributing 15.5% and 26.6% in FY11E and FY12E, respectively
Valuation
At the CMP of | 534, the stock is trading at 10.1x FY12E EPS of | 51.4. The
company has a strong movie pipeline slated for FY12E. The interactive
segment is also expected to post exponential growth with handsome
profitability once the owned IPs are launched.
We have valued the stock at 11x FY12 EPS to arrive at a target price of |
565. This implies an upside of 6%. We are upgrading the stock from
REDUCE to ADD.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
UTV Software -Impressive performance...
On a consolidated basis, UTV Software reported a topline of | 255.9
crore (I-direct estimate of | 293.0 crore) improving 16.0% YoY and 6.7%
QoQ. The growth was on the back of improving revenue from the
television and gaming segment, which grew 15.3% and 116.9% YoY,
respectively. The company reported EBITDA of | 53.4 crore against |
37.7 crore in Q3FY10. EBITDA margins stood at 20.9%, improving 379
bps YoY and 174 bps QoQ. PAT for the quarter stood at | 40.0 crore (Idirect estimate of | 29.2 crore) as compared to | 37.8 crore in Q3FY10.
PAT was higher than our estimates due to lower interest and tax outgo
during Q3FY11.
ƒ Highlights of the quarter
UTV released Guzaarish and Tees Maar Khan during the quarter. The
television segment has shown significant traction driven by growth in
advertisement in the broadcasting and content business with 14
shows on air. It has managed a monthly average of approximately
115 hours of content under management across all channels.
The company completed the development of El Shaddai and would
launch the game in Japan on April 28, 2011 (long holiday week in
Japan). The company has also finalised a couple of merchandising
deals with a jeans company and a toy company in Japan.
Valuation
At the CMP of | 534, the stock is trading at 10.1x FY12E EPS of | 51.4. The
company has a strong movie pipeline slated for FY12E. The interactive
segment is also expected to post exponential growth with handsome
profitability once the owned IPs are launched.
We have valued the stock at 11x FY12 EPS to arrive at a target price of |
565. This implies an upside of 6%. We are upgrading the stock from
REDUCE to ADD.
ƒ Movies
The movie segment continued on the momentum gained in the last
quarter. The company released two movies – Guzaarish and Tees Maar
Khan. Though the overall performance of the movies may not be as
expected, the company had largely de-risked itself with a combination
of pre-sales and committed revenues on account of music, home video,
TV and ancillary revenues prior to the release of these movies.
The movie segment reported revenues of | 107.6 crore contributing
~42.2% of the total revenues as compared to ~50.7% during Q2FY11.
EBIT margins for the quarter were at 25.1% as compared to 37.0% in
Q2FY11 and 40.1% in Q3FY10. We expect the movie segment to
contribute 45.7% and 39.0% of the total topline in FY11E and FY12E,
respectively.
The company has already released two movies – Dhobi Ghat and No
One Killed Jessica in Q4FY11 and would be shortly releasing Saat
Khoon Maaf. The management has guided for a healthy movie slate for
release in FY12.
ƒ Television
The television segment has shown good traction this quarter both in
terms of revenue as well as profitability growth. In terms of content, the
company had 14 shows on air on various channels. It has managed a
monthly average of approximately 115 hours of content under
management across all channels. The broadcasting segment has seen
robust advertisement growth backed by increasing viewership and the
festive season.
This segment reported revenues of | 101.6 crore as compared to | 88.2
crore during the same period last year, growing 15.3% YoY and 24.7%
sequentially. Contribution from this segment to the total topline was
39.8%. The EBIT margin stood at 20.4% as compared to 5.4% in
Q3FY10 and 6.0% in Q2FY11 reflecting that strong ad growth is directly
impacting the profitability.
We expect this segment to report revenues of | 348.5 crore and | 421.3
crore with a contribution of 36.7% and 33.4% to the total topline in
FY11E and FY12E, respectively.
ƒ Gaming and interactive
The gaming segment contributed | 45.9 crore to the topline as
compared to | 35.7 crore in Q2FY11 and | 21.2 crore in Q3FY10. The
revenue improved 28.6% sequentially and 116.9% YoY. The EBIT from
the segment stood at | 10.6 crore while the margin stood at 23.1%.
The company completed the development of El Shaddai and would
launch the game in Japan on April 28, 2011 (long holiday week in
Japan). The company has also finalised a couple of merchandising
deals with a jeans company and a toy company in Japan.
We expect this segment to report revenues of | 147.1 crore and | 335.7
crore, contributing 15.5% and 26.6% in FY11E and FY12E, respectively
Valuation
At the CMP of | 534, the stock is trading at 10.1x FY12E EPS of | 51.4. The
company has a strong movie pipeline slated for FY12E. The interactive
segment is also expected to post exponential growth with handsome
profitability once the owned IPs are launched.
We have valued the stock at 11x FY12 EPS to arrive at a target price of |
565. This implies an upside of 6%. We are upgrading the stock from
REDUCE to ADD.
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