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This is an entirely free service. No payments are to be made.The Indian television media industry has been growing at a rapid clip over the past few years, led by changing consumer preferences and better programming content from service providers. NDTV, which is a leading new broadcaster in the country, has benefited from the overall growth in the industry. In this article, we analyse the company’s strengths and also its financial performance over the past few years.
More advertisers and more brands: The primary source of revenue for the company is from advertisements on both its news channels. Since the launch of news channel in April 2003, the company has attracted a total of 986 advertisers and 2086 brands by 2006 thus translating into an impressive CAGR of 76% and 92% respectively. The following chart shows the number of advertisers and brands. Advertising revenues for the company have also grown at an impressive CAGR of 81% during the said period and stood at Rs 209 m during FY06.
Extensive reach: At 48.7 m viewers, NDTV had the widest reach (both the channels combined), and this formed about 23% of the total C&S viewership amongst news channels in the country. With C&S viewership set to witness exciting growth in the coming years, NDTV is likely to be a major beneficiary among news channels of such a trend. This will help the company increase its bargaining power with advertisers and garner additional revenues.
Despite the robust growth in topline, the company has suffered at the operating profits level as operating margins dropped considerably and stood at just 19% of sales in FY06 as compared to 30% in the previous year. Net profit margins have also come under pressure during FY06 on account of pressure at the operating level as well as extraordinary income to the tune of Rs 279 m, a major factor behind the company’s bleeding at the net profit levels. Higher depreciation has also not helped matters.
FY02 | FY03 | FY04 | FY05 | FY06 | |
Net sales(Rs m) | 945 | 1085 | 690 | 1761 | 2210 |
% growth | 15% | -36% | 155% | 25% | |
PAT | 264 | 181 | -500 | 354 | -20 |
%growth | -31% | -376% | -171% | -106% | |
Profitability ratios | |||||
EBITDA margins (%) | 31% | 30% | -50% | 30% | 19% |
EBIT margins (%) | 34% | 26% | -64% | 25% | 14% |
Net profit margin(%) | 28% | 17% | -73% | 20% | -1% |
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