Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
TV18 Broadcast
1 QFY12 results – a weak quarter
1Q revenues in line, EBITDA and adjusted net profit below UBS-e
TV18 reported 1QFY12 consolidated results: Revenue came in at Rs2.66bn vs.
UBS-e of Rs2.66bn. EBITDA came at Rs243m vs. UBS-e of Rs268m, EBITDA
margin came at 9.2% vs. UBS-e of 10.0%. TV18 net profit came at Rs 211m vs.
UBS-e of Rs1m. Net profit came in significantly ahead of estimates mainly due to
higher other income (Rs345m, largely one-off in nature) adjusting for which TV18
reported net loss. Interest cost increased 141% qoq to Rs283m.
Key takeaways from conference call
1) Management expects subscription revenues to start growing significantly from
Sep-11 and contribute 14-15% to FY12 revenues [12% currently]. 2) Management
believes that advertisers held back ad spends in 1Q primarily due to higher spends
on cricket properties [ICC Cricket World Cup and IPL]. TV18 expects advertising
revenues to bounce back in 2H during the festive season. 3) TV18 plans to launch a
Hindi movie channel and a few regional niche channels.
TV18 is a play on fast growing subscription revenue
TV18 stock price underperformed BSE Sensex by 32% in past one year. We view
any weakness as a buying opportunity as we believe TV18 is a play on growing
subscription revenues. We expect subscription revenue to grow from 12% of
revenue to 21% by FY15 led by rapidly expanding digital subs base, expansion
into international markets and improved distribution capabilities (led by Sun18).
Valuation: DCF based price target of Rs130
We assume 13.0% WACC. We are currently reviewing our estimates.
TV18 Broadcast
IBN18 was incorporated in June 2005 as Global Broadcast News and started
commercial operations in December 2005. IBN18 operates news channels CNN
IBN and IBN7. It is a subsidiary of Network18 Group, a media conglomerate in
India. IBN18 has a 50:50 JV with Viacom named Viacom18, which operates
Colors, MTV, VH1 and Nickelodeon. IBN18 also operates regional (Marathi)
news channel, IBN Lokmat, under a 50:50 JV with Lokmat Group (IBN
Lokmat). IBN18 acquired the business news channels (CNBC TV18 and CNBC
Awaaz) from TV18 in a group restructuring in July 2010.
Statement of Risk
We believe the key risks for TV18 and IBN18 are: 1) intense competition in
most of its broadcasting genres, especially the Hindi GEC; 2) heavy reliance on
advertising revenue; and 3) regulatory risk, as the news segment of the Indian
broadcasting industry is exposed to significant regulation on up-linking and
ownership.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
TV18 Broadcast
1 QFY12 results – a weak quarter
1Q revenues in line, EBITDA and adjusted net profit below UBS-e
TV18 reported 1QFY12 consolidated results: Revenue came in at Rs2.66bn vs.
UBS-e of Rs2.66bn. EBITDA came at Rs243m vs. UBS-e of Rs268m, EBITDA
margin came at 9.2% vs. UBS-e of 10.0%. TV18 net profit came at Rs 211m vs.
UBS-e of Rs1m. Net profit came in significantly ahead of estimates mainly due to
higher other income (Rs345m, largely one-off in nature) adjusting for which TV18
reported net loss. Interest cost increased 141% qoq to Rs283m.
Key takeaways from conference call
1) Management expects subscription revenues to start growing significantly from
Sep-11 and contribute 14-15% to FY12 revenues [12% currently]. 2) Management
believes that advertisers held back ad spends in 1Q primarily due to higher spends
on cricket properties [ICC Cricket World Cup and IPL]. TV18 expects advertising
revenues to bounce back in 2H during the festive season. 3) TV18 plans to launch a
Hindi movie channel and a few regional niche channels.
TV18 is a play on fast growing subscription revenue
TV18 stock price underperformed BSE Sensex by 32% in past one year. We view
any weakness as a buying opportunity as we believe TV18 is a play on growing
subscription revenues. We expect subscription revenue to grow from 12% of
revenue to 21% by FY15 led by rapidly expanding digital subs base, expansion
into international markets and improved distribution capabilities (led by Sun18).
Valuation: DCF based price target of Rs130
We assume 13.0% WACC. We are currently reviewing our estimates.
TV18 Broadcast
IBN18 was incorporated in June 2005 as Global Broadcast News and started
commercial operations in December 2005. IBN18 operates news channels CNN
IBN and IBN7. It is a subsidiary of Network18 Group, a media conglomerate in
India. IBN18 has a 50:50 JV with Viacom named Viacom18, which operates
Colors, MTV, VH1 and Nickelodeon. IBN18 also operates regional (Marathi)
news channel, IBN Lokmat, under a 50:50 JV with Lokmat Group (IBN
Lokmat). IBN18 acquired the business news channels (CNBC TV18 and CNBC
Awaaz) from TV18 in a group restructuring in July 2010.
Statement of Risk
We believe the key risks for TV18 and IBN18 are: 1) intense competition in
most of its broadcasting genres, especially the Hindi GEC; 2) heavy reliance on
advertising revenue; and 3) regulatory risk, as the news segment of the Indian
broadcasting industry is exposed to significant regulation on up-linking and
ownership.
No comments:
Post a Comment