Jul 12, 2002|
Pentamedia: Takes a dip
Animation major, Pentamedia Graphics has reported a sharp drop in performance for FY02. Unlike FY01, the results for FY02 are on a consolidated basis with 7 overseas subsidiaries and 3 subsidiaries in the domestic market. Even post consolidation of subsidiaries revenues, the company has reported a 20% drop in revenues. Further, thanks to a sharp rise in interest expenses, net profits dropped more than 35%.
|Operating Profit (EBDIT)
|Operating Profit Margin (%)
|Profit before Tax
|Profit after Tax/(Loss)
|Net profit margin (%)
|No. of Shares (eoy) (m)
|Diluted Earnings per share
|P/E (at current price)
There has been a marked shift in the operating policy of the company last year from work-for-hire projects where the company gets assured margins, to own products basis. Pentamedia currently has several projects in its pipeline to be released at appropriate intervals by early March’03. The company expects a sharp jump in animation production minutes to over 450 minutes from around 380 minutes currently.
Coming to its subsidiaries, Media Dreams, engaged in production of southern films, successfully released a film during the year, which had an average performance on the box office. Two other movies are under production. Media Dreams also entered into film distribution business during the year. It has acquired distribution rights of “Asoka” (Hindi movie) for distribution in TamilNadu and Kerala. However, as the film has not performed well on the box office, this division is expected to have recorded a considerable loss on this account. “Mayajaal”, the multiplex and theme center of the company based at Chennai is close to completion and the company has entered into several annual sponsorship agreements for the same.
The NumTv project of the company, which is into internet entertainment content distribution is gaining momentum and the company currently has a subscriber base of more than 30,000 of niche clientele spread across several continents. The NumTv project of the company with its vast bouquet of channels could see a bright future ahead. However, the success of the project is completely dependent on the availability of broadband.
The company’s shift in operations from hire work basis own products basis in the animation business could see a drop in margins in the coming quarters, if it not able to secure adequate markets for its products. Further, the investments made by the company in all its subsidiaries especially NumTv are riskier and would take time to generate returns. The company also seems to be losing focus exhibited by its entry into film distribution business, which is not its core area of operation.
At the current market price of Rs 36, the stock is trading at 3x its FY02 earnings. Pentamedia is a classic case of a company with strong operational capabilities, losing out on account of lack in investor confidence. The company has won international accolades for its work done and continues to pioneer many novel concepts. Despite, a rising stature and quality of work the company has been in a myriad of controversies. The company has huge investments in various subsidiaries, which lack transperancy.
More Views on News
Aug 14, 2017
The management believes that GST will aid the advertising spends in the long-run.
Jun 21, 2017
Should one subscribe to the IPO of GTPL Hathway Ltd?
Apr 26, 2017
Should you subscribe to the IPO of S Chand and Company Limited?
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407