Mukta: Near term bonanza - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Mukta: Near term bonanza

Nov 9, 2000

Hindi film producers, at least the top notch ones, never had it so good. Gone are the days when the producer would struggle for finances to complete his film and queue up in front of distributors who would pick and choose which film to choose and promote. Now even before a single reel is canned, the music rights, satellite rights and overseas rights are gobbled up by the music and television companies. The banks and financial institutions are also not averse to funding movie production. And it is distributors who now queue up in front of the producers! It is in this scenario that Mukta Arts made an IPO offering at Rs 150 (for a Rs 5/- paid up share).

While the stock has tumbled from a high of Rs 260, which it touched after being listed, to a level of Rs 188 now, the company seems to be doing well for itself. And this, despite the fact that no movie release is planned for the current year (For a film producer, the financial numbers improve dramatically in the year of release and Mukta’s last release ‘Taal’ was in 1999).

This is where a change in the underlying business has helped content companies such as Mukta. The company sold only the music rights of ‘Yaadein’ for Rs 80 m to Tips Industries. And Mr. Ghai is reportedly quoting a price of over Rs 200 mn for the satellite and overseas rights put together. And this does not include the domestic theatrical distribution rights, cable rights and DVD rights which could fetch the company a similar amount!. (The cost of making the entire movie is around Rs 150 mn). Also, in the current year, the rights of the company’s past movies have been sold for a one time telecast to a private channel for Rs 140 m.

We expect the company to report a net profit of over Rs 350 m. This implies a per share earnings of around Rs 21. Perhaps, the only grey area is the increasing interest of unwanted elements in the movie distribution business. This increases the risk for investors since the companies are dependent on one or two personalities who run the show. The challenge for production houses would be to set up organisational set ups that can survive and thrive even when the founders are not in the scene.


Equitymaster requests your view! Post a comment on "Mukta: Near term bonanza". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

MUKTA ARTS SHARE PRICE


Sep 21, 2020 03:35 PM

TRACK MUKTA ARTS

  • Track your investment in MUKTA ARTS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS