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Balaji Telefilms: Perfomance matches expectations - Views on News from Equitymaster
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  • Jan 29, 2001

    Balaji Telefilms: Perfomance matches expectations

    Balaji has declared a post tax profit of Rs 35 m on a turnover of Rs 178 m for the quarter ended December 2000. This almost equals the performance of the whole of FY2000. (The company has not given out the figures for the corresponding quarter of last year since the listing requirements were not applicable.) The growth in turnover is on the back of increased programming during the current year. The total hours of programmes have gone up from 4.6 hours per week in FY99 to almost 28 hours per week currently.

    (Rs m) 3QFY01 9m FY01
    Sales 178 345
    Other Income 3 4
    Expenditure 134 255
    Operating Profit (EBDIT) 44 90
    Operating Profit Margin (%) 24.7% 26.0%
    Interest 3 7
    Depreciation 1 2
    Profit before Tax 43 85
    Other Adjustments (4) (13)
    Tax 4 8
    Profit after Tax/(Loss) 35 65
    Net profit margin (%) 19.5% 18.7%
    Earnings per share* 10.74 10.01

    The operating margins in the current quarter are slightly lower than that of the first nine months. This could be due to writing off of the entire costs of event management (the company's costs are higher than the revenues from the same) and the ramp up in the costs of programming. The company however seems to be following the strategy of retaining the copyrights of as many serials as it possibly can. While private channels such as Sony and Zee usually buy up the copyrights of the programmes Balaji has managed to hold the copyright of its popular soap "Ghar Ek Mandir" which runs on primetime on Sony. Overall the ratio of sponsored programmes (where the company gets the ad revenues) to commissioned programmes (where the channel owns the programme and hence derives the ad revenues) stands at around 70: 30.

    Balaji is well in line to achieve its targeted projections of a turnover of Rs 450 m and a net profit in the range of Rs 90 m in the current year. The stock currently quotes at a price of Rs 330 which implies an earnings multple of 30.7 times FY01annualised earnings.



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