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TV 18: Losses surmount

Oct 13, 2001

TV 18 has reported a 4.3% growth in revenues for 2QFY02 on a sequential basis over 1QFY02. Operating margins have improved marginally by 30 basis points. Though the company reported a marginal PBT of Rs 2 m, thanks to one time extra-ordinary expense of Rs 17 m, it recorded a loss of Rs 15 m.

(Rs m) 1QFY02 2QFY02 %
  (Consolidated) change
Sales 62 65 4.3%
Other Income 5 14 158.5%
Expenditure 61 64 3.9%
Operating Profit (EBDIT) 1 1 32.5%
Operating Profit Margin (%) 1.3% 1.6%
Interest 6 6 1.3%
Depreciation 7 7 -6.8%
Profit before Tax (7) 2 NA
Other Adjustments 0 -17 NA
Tax 0.8 0 NA
Profit after Tax/(Loss) (8) (15) 84.8%
Net profit margin (%) -13.2% -23.4%  
No. of Shares (eoy) (m) 11 11  
Diluted Earnings per share NA NA  

TV 18 derives revenues from three distinct sources viz, news based content creation for CNBC India, entertainment based content creation and finally revenues from its web initiatives (, which it operates through its subsidiary E 18). While the news based content revenues have remained more or less stagnant, other sources of revenues have shown improvement. Nevertheless, it is small in comparision to the total revenue pie.

TV-18 Revenue Mix
  1QFY02 2QFY02 % Change
News based content 57.2 56.0 -2.1%
Entertainment based content 3.0 5.2 74.2%
Web Initiatives 2.0 3.7 82.1%
  62.2 64.9 4.2%

The entertainment business of the company has signed up several new production contracts including 'Kya Masti Kya Dhum' launched on Star Plus couple of months back. It seems that this programme would have contributed to increase in entertainment based revenues.

Revenues from news based content creation and web initiatives are expected to remain flat for the full year. Entertainment business may however, witness growth in revenues and this could boost margins marginally. However, the company is likely to post marginal EPS for the full year and the stock looks expensive on that count.

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