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TV Today: An overview - Views on News from Equitymaster
 
 
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  • Mar 30, 2007

    TV Today: An overview

    About the company: Promoted by Living Media India Limited, TV Today Network Limited (TVTN) was incorporated in December 1999. Presently, TVTN runs four News & Current Affairs channels. The primary source of income for the Company is Ad sales revenue. Aaj Tak - its flagship channel has been awarded the "Best News Channel" by the Indian Television Academy for 6 successive years.

    TVTN, with its strong network consists of four news channels:

    Aaj Tak Aaj Tak, one of the most visible Hindi news channels has improved its market share from 23% in May 2005 to 26% in May 2006. After all these years, it still remains a market leader in the Hindi news channel space and this will hold the company in good stead in garnering ad revenues going forward.

    Headlines Today - India's first exclusive 24-hr English news channel focused not only on general news but also on additional content of sports, film industry, technological advancements, etc. Despite increased competition from the players like CNN IBN and Times Now, Headlines Today registered 4% growth in viewership from 6.5 m in FY05 to 7 m in FY06. But a drop in market share still remains a serious concern.

    Tez The channel made for the busy viewer, does not include long discussions and unnecessary analysis. It is suitable for those who do not want to listen to detailed bulletin. The market share improved significantly from Sept 2005 to May 2006 with an impressive reach of 5.80 million viewers.

    Delhi Aaj Tak The Delhi/NCR specific news channel provides information on key news in the capital. The channel attempts to capture Delhi's rising consumerism, rapidly improving infrastructure and all aspects of life.

    Financial Performance

    The topline has grown at a 33% CAGR between FY02 and FY06. The bottomline has shown an impressive growth of 80% CAGR during the same period. Operating margins stood at around 40% during FY06. While this is indeed impressive, it is significantly lower from the highs of 54% the company achieved in FY03. Net profit margins stood at around 17% in FY06. The company has zero debt.

    (Rs m) FY02 FY03 FY04 FY05 FY06 CAGR (%)
    Net Sales 517 1,085 1,402 1,391 1,596 32.6%
    Operating Profit 151 582 688 433 636 43.4%
    OPM (%) 29.1% 53.6% 49.1% 31.1% 39.9%  
    Interest 50 89 90 82 80  
    PBT 28 421 495 231 431  
    Tax 0.4 157 178 87 145  
    Profit after tax 28 264 316 144 287 79.7%
    NPM (%) 5.3% 24.3% 22.5% 10.3% 18.0%  

    Future outlook:

    The Indian television market is undergoing a major technological change. New distribution platforms such as digital cable, DTH and IPTV have already hit the market. TVTN's success will follow from increased penetration. Advertisers loyalty will be retained due to customized rate cards. Strong newsgathering network and excellence in editing by experienced management will be the key strengths to maintain market leadership. Aaj Tak and Headlines Today are available in the US and soon will also be available in other international markets. All TVTN Channels are encrypted providing viewers with a superior viewing experience and quality content. On the back of booming news industry, TVTN has also forayed into developing quality journalists through TV Today Media Institute. All in all, the company looks well poised to take advantage of the growth in the Indian media industry.

     

     

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