Cinevista: Pays for DD dependence - Views on News from Equitymaster

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

  • MyStocks


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

Cinevista: Pays for DD dependence

Jun 29, 2001

The dismal performance by Cinevista Communications for FY01 has come as a shock to investors. The company has infact reported an operating loss of 37%. While we had projected a 100% drop in EPS, the results declared by the company are much more disappointing. The sharp fall in operating margins can attributed to the fact that most of the air time slots which the company had bought from DD remained unsold due to slump in demand for advertising on DD.

(Rs m) FY00 FY01 % change
Sales 439 397 -9.7%
Other Income 71 39 -44.9%
Expenditure 373 544 45.9%
Operating Profit (EBDIT) 67 (147) -320.9%
Operating Profit Margin (%) 15.2% -37.1%
Interest 7 4 -46.2%
Depreciation 5 8 76.6%
Profit before Tax 126 (120) -194.9%
Extraordinary Income - -
Tax 38 0 -99.8%
Profit after Tax/(Loss) 88 (120) -236.4%
Net profit margin (%) 20.0% -30.2%
No. of Shares (eoy) (m) 10.1 10.1
Diluted Earnings per share 8.7 -11.8
P/E (at current price) 4.7 -

Further, due to the uneconomical rate structure of DD, the company had to withdraw some of its programs from air. While the company had to book the production and telecast costs in both the cases, the revenues did not match up resulting in an operating loss. Production and telecast costs have eaten up almost the entire revenues, as shown in the table below. The company had to write off cost of untelecast episodes pending litigation against DD.

(Rs m) FY99 FY00 FY01
Sales 215.1 439.2 396.7
Production/Telecast cost 135.5 261.3 394.1
Production/Telecast cost as % of sales 63.0% 60.0% 99.0%

Cinevista, has also missed out on all its IPO projections. While there have been cost overruns in terms of land & equipment purchase as well as on the issue expenses, the web casting and overseas production center projects have run into rough weather.

The current market price of Rs 41 is at 84% discount to its IPO price of Rs 255, leading to an erosion in market capitalisation of more than Rs 2.2 bn. Given that the company was heavily dependent on DD, the only way to mop up revenues in the current year, is to have reruns of existing software on other satellite channels.

Equitymaster requests your view! Post a comment on "Cinevista: Pays for DD dependence ". Click here!


More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

Not Infosys or Wipro. India's Next Wealth Creators Could Be Drone Stocks (Profit Hunter)

Nov 25, 2020

India's drones directorate signals the next big defence tech multibaggers.

Stocks that Could Shine More than Gold After Diwali (Profit Hunter)

Nov 17, 2020

If the markets become volatile over the next few months, do this.

How the New Margins Will Impact You (Fast Profits Daily)

Nov 25, 2020

The new rules on margins will come into effect from 1st December. Are you ready?

How to Build the Best Trading System (Fast Profits Daily)

Nov 20, 2020

In this video, I'll show you how to make the best trading system.

An Eraser and Some Pencils (The Honest Truth)

Nov 17, 2020

Ajit Dayal on the road ahead for the world after covid.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Nov 27, 2020 (Close)


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