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Pentamedia: 1QFY02 net rises 36% - Views on News from Equitymaster

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Pentamedia: 1QFY02 net rises 36%

Jul 23, 2001

Pentamedia Graphics has posted a growth of 9% in revenues for 1QFY02 compared to 4QFY01. The operating margins however, have come under pressure falling by 300 basis points mainly due to increase in production, distribution and exhibition expenses.

(Rs m) 1QFY01 1QFY02 % change 4QFY01 1QFY02 % Change
Sales 1,145 1,581 38.1% 1,450 1,581 9.0%
Other Income 41 31 -24.1% 3 31 936.7%
Expenditure 738 953 29.1% 831 953 14.7%
Operating Profit (EBDIT) 407 628 54.3% 619 628 1.5%
Operating Profit Margin (%) 35.5% 39.7% 42.7% 39.7%  
Interest 17 34 100.0% 47 34 -27.7%
Depreciation 123 205 66.9% 206 205 -0.3%
Profit before Tax 308 420 36.4% 369 420 13.8%
Extraordinary Income          
Tax - 3 32 3
Profit after Tax/(Loss) 308 418 35.6% 337 418 23.9%
Net profit margin (%) 26.9% 26.4% 23.2% 26.4%  
No. of Shares (eoy) (m) 39.9 47.8   47.8 47.8  
Diluted Earnings per share* 30.9 34.9   28.2 34.9  
P/E (at current price) 1.7     1.7  
(*- annualised)            

Animation and special effects related work continue to contribute around three fourth of the company's revenue. Though entertainment currently contributes just 10% of the revenues, it is expected to increase going forward, considering the projects under execution. Recently, Cartoon Network acquired cable television rights for "Sinbad" and "Pandavaas", two full length animated films from Pentamedia. The amount of the deal is not yet disclosed.

Pentamedia finally paid US $ 0.35 m in cash to Film Roman to withdrew the acquisition deal it had previously entered with the company.

At the current market price of 60, the stock quotes at a P/E of 2x its annualised 1QFY02 earnings. The operating margins of the company continue to be the best in the industry. However, the company seems to be in dire need of funds, going by the rising interest costs. It is has decided to allot additional 12.7 m GDR's at a rate of US $ 1.50 per GDR for cash which would be traded at Luxemburg stock exchange along with existing GDR's.

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