Broadcasting, key to Adhikari fortunes - Views on News from Equitymaster

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

  • MyStocks


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

Broadcasting, key to Adhikari fortunes

Nov 15, 2000

Sri Adhikari Brothers was among the first pure content providers to venture into broadcasters. Though this seems a natural vertical integration, the fact remains that broadcasting is a different ball game altogether. This is because for a broadcaster, apart from the quality of programming, the management of time slots is a matter of life and death. For example, till recently, Zee had six to seven programmes among the top ten most watched programmes in the cable and satellite universe. The introduction of a popular game show by Star Plus let loose a cat amongst (Zee’s) pigeons. The company brought in a new game show at the 8.30 pm prime time slot by replacing three of its successful programmes. While its game show has not met with much success, it seems to have lost that particular timeslot to other channels. The result: only three of its programmes figure amongst the top ten currently.

Sri Adhikari has made its mark as a content provider for the state broadcaster ‘Doordarshan’ (DD). The company currently has 2.5 hours a week on prime time on the DD national network and 7.5 hours a week on the regional network. The company launched its channel SABe TV in April 2000. The content for this channel is to be provided by Sri Adhikari Brothers itself. While around 25% of the content is produced in-house, the rest is outsourced by Sri Adhikari and supplied to the channel at a cost plus 15%. The channel is owned by a Mauritius based subsidiary of the company and the management expects it to break even after three years. Thereafter it could be merged with the parent company itself. It reaches around 14 m homes out of a total cable and satellite universe of around 30 m homes.

So far, the channel seems to have got its programming mix alright although it has been jostling for space with other general entertainment channels such as Sony which have also beefed up their programming. (Sony had offered SABe TV, a slot on its distribution trolley, which the latter rejected) It has also been successful in creating newer time slots such as the afternoon slot for its new game show.

However, the fact remains that advertising is slowing down. This seems to be the outcome of a slowdown in rural demand, which has affected the topline growth of most consumer non–durable companies. A recent example is that of Hindustan Lever, which normally spends around Rs 8 bn annually (average Rs 2 bn per quarter) on advertising, has announced a cut in its ad spending to Rs 600 m in the last quarter of the current year. This is bound to affect broadcasting companies in general and the general entertainment channels such as Sri Adhikari Brothers, in particular.

The stock quotes at Rs 283, slightly above it’s 52–week low of Rs 277 (52 week range: Rs 2350/277). Currently, it quotes at an earnings multiple of 12.3 times its estimated earnings for FY01. We feel that it is better to wait until it becomes clear that the channel is holding its own against bigger competitors.

Equitymaster requests your view! Post a comment on "Broadcasting, key to Adhikari fortunes". Click here!


More Views on News

What Fuelled the Sudden Surge in PVR and Inox Shares Today (Views On News)

Sep 27, 2021

Shares of both multiplex chain operators surged almost 18% to hit their 52-week highs.

8 Penny Stocks with Exceptionally High Promoter Holding (Views On News)

Sep 25, 2021

While high promoter holding is a good thing, there can be rare cases where penny stock promoters use misleading information about the actual valuation.

Shareholder Activism Triggers a 30% Rally in Zee Entertainment Shares (Views On News)

Sep 14, 2021

Zee Entertainment shares zoom after top investors seek CEO and MD Punit Goenka's removal.

Here's Why Affle India Hit 5% Upper Circuit Today (Views On News)

Jul 2, 2021

In the past one year, the company's share price is up 202%. Can it go higher?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 7, 2021 03:36 PM


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