X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Balaji Telefilms: The struggle continues - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

StockSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Balaji Telefilms: The struggle continues
May 25, 2011

Balaji Telefilms announced the fourth quarter results of financial year 2010-2011 (4QFY11). The company registered slight fall in revenues by 0.5% YoY and a net loss of Rs 11 m this quarter. Here is our analysis of the results.

Performance summary
  • Top line fell slightly by 0.5% YoY during the quarter. For the full year, revenues fell by nearly 7%.
  • Balaji Telefilms posted an operating loss of Rs 4 m this quarter as against operating profit of Rs 99 m in the same quarter last year. For FY11, operating loss stood at Rs 86 m.
  • Other income too saw a fall of 26% during the quarter and 30% during the full year 2011.
  • The company reported a net loss of Rs 11 m for Q4FY11 as compared to a net profit of Rs 34 m in Q4FY10.


Standalone financial snapshot
(Rs m) 4QFY10 4QFY11 Change FY10 FY11 Change
Net sales 447 445 -0.5% 1,640 1,530 -6.7%
Expenditure 348 449 28.8% 1,534 1,616 5.4%
Operating profit (EBDITA) 99 (4)   106 (86)  
EBDITA margin (%) 22.1% -0.8%   6.5% -5.6%  
Other income 34 25 -26.4% 220 155 -29.6%
Interest - -   - -  
Depreciation & amortisation 24 26 5.9% 103 112 8.2%
Profit before tax 108 (5)   223 (43)  
Profit before tax margin (%) 24.2% -1.0%   13.6% -2.8%  
Exceptional items - -   - -  
Tax 74 7 -90.7% 71 (9)  
Profit after tax 34 (11)   152 (34)  
Net profit margin (%) 7.6% -2.6%   9.3% -2.2%  
No. of shares (m)         652.1  
Diluted earnings per share (Rs)*            
P/E (x)            
* Since the earnings for last 12 months are negative, PE multiple for trailing 12 months earnings is not applicable

What has driven performance in 4QFY11?
  • Net sales reduced by 0.5% during the quarter and 7% during the full year. On a segment wise basis, the revenues from commissioned programming increased by 34% YoY during the quarter but remained constant over the year. Revenues from sponsored programs, increased by 21% during the quarter. However, for FY11 these witnessed a fall by 7%.

  • The realization per hour from commissioned programming (HSM) increased to Rs 1.8 m from Rs 1.7 m in Q4FY10. . However, realizations from sponsored programming declined by 8% YoY from Rs 380,000 to Rs 350,000 during the quarter.

  • Hours of commissioned programs reduced by 9% YoY from 164 hours to 150 hours. Hours of Sponsored programs category increased by 32% YoY (from 144 hours to 190 hours).

    Segmental summary
    (Rs m) 4QFY10 4QFY11 Change FY10 FY11 Change
    Commissioned programs            
    Revenue 280 374 33.7% 1284 1291 0.6%
    EBIT 204 107 -47.6% 468 298 -36.3%
    EBIT margin (%) 72.8% 28.6%   36.4% 23.1%  
    Sponsored programs            
    Revenue 55 67 20.8% 244 228 -6.7%
    EBIT 15 22 53.1% 46 61 33.3%
    EBIT margin (%) 26.3% 33.3%   18.8% 26.8%  

  • The company reported an operating loss of Rs 4 m for the quarter and Rs 86 m for the full year. This was mainly on account of higher expenditure especially in commissioned programs. EBIT margin for commissioned programs fell from 73% to 29% during the quarter while those from sponsored increased by 7%. For FY11, EBIT margins (commissioned) saw a fall of more than 13% while EBIT margin of sponsored programs increased by 8%.

    Cost break-up
    (% of sales) 4QFY10 4QFY11 Change FY10 FY11 Change
    Staff Cost 49 56 14.6% 164 195 18.9%
    % sales 11.0% 12.7%   10.0% 12.7%  
    Production telecast 212 296 39.5% 1,066 1,099 3.1%
    % sales 47.4% 66.4%   65.0% 71.8%  
    Change in stock in trade 7 1 -85.3% (6) (0) -97.0%
    % sales 1.5% 0.2%   -0.3% 0.0%  
    Other expenses 81 96 18.6% 310 323 4.2%
    % sales 18.0% 21.5%   18.9% 21.1%  
    Total expenditure 348 449   1,534 1,616  

  • The production telecast expenses increased as a percentage of sales from 47% to 65% during the quarter. A similar rise of 7% was seen over the year for this expense head.

  • Staff costs increased moderately but a sharp rise was seen in other expenses.

  • Poor performance at the operating level coupled with the reduction in income from investments hurt the bottomline. The company reported a net loss of Rs 11 m for Q4FY11 and Rs 34 m for the full year 2011.

What to expect?
Balaji Telefilms' Board of Directors has recommended a dividend of Rs 0.2 per share on the paid-up equity share capital of the company for the financial year ended March 2011 (dividend yield of 0.6%). The company has obtained shareholder approval to sell its mobile, internet and education business on a slump basis. During the year, Balaji Telefilms received demand notices from sales tax ad service tax authorities amounting to Rs 2.2 bn and 0.9 bn respectively. While some of these have been adjudicated in favour of the company, others are pending for hearing. The stock is currently trading at a price of Rs 32.6 per share. This implies a PE multiple of 9.3 times our FY13 estimated earnings. We reiterate our negative view on the stock.

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

BALAJI TELEFILMS SHARE PRICE


Jul 20, 2018 (Close)

TRACK BALAJI TELEFILMS

  • Track your investment in BALAJI TELEFILMS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON BALAJI TELEFILMS

BALAJI TELEFILMS - NASPERS COMPARISON

COMPARE BALAJI TELEFILMS WITH

MARKET STATS