Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Balaji Telefilms- Putting it all together - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Dec 13, 2007

    Balaji Telefilms- Putting it all together

    Over the past few weeks, we analysed the company's performance on a year-by-year basis starting from FY04. In this 'summing it all up' article in the series, we shall see how <>Balaji Telefilms has evolved over the last four years to become the leading television entertainment content provider. We shall see how its topline, bottomline, margins and return ratios have moved in the last four years.

    Rs m FY04 FY05 FY06 FY07 CAGR
    Sales 1,783 1,967 2,804 3,202 21.6%
    % growth -4.1% 10.3% 42.6% 14.2%  
    Operating profit 868 674 937 1,195 11.2%
    OPM 48.7% 34.3% 33.4% 37.3%
    Net profit 554 413 525 793 12.7%
    NPM 31.1% 21.0% 18.7% 24.8%
    Total assets 1,288 1,695 2,474 3,478  
    Net Debt -11 -30 -62 -78  
    Working capital (excl cash) 404 663 451 796  
    % sales 22.7% 33.7% 16.1% 24.9%  
    ROE 44.2% 23.1% 22.7% 26.1%  
    ROCE 35.0% 19.4% 21.0% 26.0%  

    • Sales have grown at a CAGR of 22% from FY04 to FY07. In the years FY06 and FY07 Balaji has been able to increase its sales primarily due to the increase in realisations per hour. The overall realizations per hour increased 12% YoY to Rs 1.3 m in FY06 and then by a whopping 37% YoY to touch Rs 1.7 m in FY07. The entry of new channels and sustenance in the high TRP ratings of Balaji's programmes has led to an increase in the realizations per hour.

    • Balaji's programming hours have stagnated in the last four years and have even declined YoY in some cases. The company has found it difficult to scale up its operations. Besides this, Balaji's core competence is in mass programming and it has not produced any reality or musical shows, which are increasingly becoming popular.

    • The operating profits have grown at a CAGR of 11% from FY04 to FY07. The operating margins declined from 48.7% in FY04 to 34.3% in FY05 due to the increase in production costs. The cost of producing serials as a percentage of programming revenues increased from 42% in FY04 to 54% in FY05. This increase happened primarily due to the increase in artist's fees and directors and technicians fees. The operating margins have stabilized in the following years.

    • The net profit has increased 27% YoY and 51% YoY in FY06 and FY07 respectively primarily due to the increase in realisations per hour. The net profit margins declined in FY05 due to the increase in the cost of producing serials.

    • The total assets have grown 2.7 times from FY04 to FY07 primarily due to the investment made in studios and post-production equipment.

    • Working capital (excluding cash) as a percentage of sales has declined from 34% in FY05 to 13% in FY06 primarily due to the decline in inventories. Inventory days have declined from 43 days in FY05 to 15 days in FY06.

    • The company does not have any debt and it invests its surplus cash in liquid funds. The investments have grown from Rs 760 m in FY04 to Rs 1,770 m in FY07.

    • Return On Equity (ROE) and the Return on capital employed (ROCE) declined in FY05 due to the decline in profits. The ratios improved in FY07 as profits improved aided by an increase in the realisations per hour.

    Future outlook:
    Balaji has forayed into the new businesses of film production and distribution, overseas programming and broadcasting. This should help the company to increase its revenues and profits going forward. Besides this, its current business of programming for Hindi general entertainment channels should also do well as the entry of new channels would help in increasing its programming hours and also its realisations per hour.



    Equitymaster requests your view! Post a comment on "Balaji Telefilms- Putting it all together". Click here!


    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Taxes, lower other income mar bottomline (Quarterly Results Update - Detailed)

    Feb 3, 2016

    Zee Entertainment has announced the third quarter results of financial year 2015-2016 (3QFY16). While the topline grew by 17% YoY, bottomline fell 11% YoY during the quarter.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 22, 2017 (Close)