TV 18: 1QFY02 net drops 72% - Views on News from Equitymaster

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TV 18: 1QFY02 net drops 72%

Aug 8, 2001

Television 18 has reported a sharp drop in net profit for 1QFY02. On a consolidated basis, things are even worse. Operating margins are at a paltry 1%, not enough to cover even the interest costs. Though the company has a huge fixed cost on its subsidiaries, revenue generation right now is miniscule. On a consolidated basis, the company has reported a net loss of Rs 8 m.

(Rs m)1QFY01*1QFY02change1QFY02**
Sales 90 62 -30.7%62
Other Income 6 10 72.6%5
Expenditure 49 48 -1.1%61
Operating Profit (EBDIT) 41 14 -66.1% 1
Operating Profit Margin (%)45.5%22.2% 1.3%
Interest 5 6 33.2%6
Depreciation 2 6 153.5%7
Profit before Tax 40 12 -69.7% (7)
Other Adjustments 2 - -100.0%0
Tax 1 1 -23.8%1
Profit after Tax/(Loss) 40 11 -72.2% (8)
Net profit margin (%)45.1%18.1%-12.5%
No. of Shares (eoy) (m) 11 11 11
Diluted Earnings per share 14.7 4.1 (0.7)
P/E (at current price) 14.1 NA
(* Stand alone March-June 2000)
(** Consolidated March-June 2001)

Revenues from news based content creation for CNBC India was Rs 57 m, around 92% of total revenues. A sharp drop in operating margins comes as a surprise given the fact that it operates on a cost plus basis with CNBC India. The entertainment business of the company has signed up several new production contracts including recently launched 'Kya Masti Kya Dhum' on Star Plus.

At the current market price of Rs 58, the stock trades at a P/e multiple of 14x its annualised 1QFY02 earnings. The market capitalisation of the stock has dropped to a paltry 640 m, a loss of Rs 24 bn in market capitalisation in 52 weeks!!!.

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