MUMBAI: It was a hectic week with the Reserve Bank of India credit policy, annual results for several companies – Zee Telefilms and ETC Networks amongst others. The BSE Sensex gained 42.60 points, or 1.4 per cent, for the week to settle at 2,966.63, recovering from a 6-month low of 2,924.03 in the previous week. The week was a comparatively good one for listed media stocks as many of them rose higher as compared to the previous fortnights.
On 2 May, Zee Telefilms opened the day on the Bombay Stock Exchange (BSE) at Rs 76.85; dropped 0.39 per cent to end the day at Rs 76.55. The scrip has gained due to the positive sentiments expressed by financial analysts post the declaration of the annual results on 28 April 2003. The scrip had dropped to Rs 67.4 on 19 April and Rs 65.80 on 12 April. The volume of shares trades was around 4.87 million shares on 2 May.
At the National Stock Exchange (NSE), the Zee Telefilm scrip started the day (2 May) at Rs 76.65; increased by 0.33 per cent to end the day at Rs 76.75 as compared to Rs 67.50 on 19 April and Rs 65.50 on 12 April. The volume of shares traded was around 9.33 million.
The Balaji Telefilms scrip opened the day (2 May 2003) at Rs 65.5; dropped 0.92 per cent and ended the day at Rs 64.90. The volume traded was 25,356 shares. This is higher than Rs 60.85 on 17 April and Rs 59.75 on 12 April on the BSE. On the NSE, the scrip opened the day at Rs 67.80; fell by 0.76 per cent to end the day at Rs 65. However, the price was higher as compared to Rs 61.80 on 17 April and Rs 59.10 on 12 April. Balaji Telefilms annual results will be announced on 22 May.
The Television Eighteen India scrip opened at Rs 71.05 on 2 May, rose by 5.49 per cent to Rs 74.95 on the BSE. A total of 145,405 shares were traded. On the NSE, it opened at Rs 73.90, rose to Rs 74.60 (up 4.70 per cent). A total of 671,655 shares were traded. For the year ended March 2003, the company’s revenue is up 25.06 per cent, at Rs 361.7 million, compared to Rs 289.21 million last year. Net profit for the year is at Rs 30.2 million, compared to a loss of Rs 46.41 million last year.
Sri Adhikari Brothers Television Network (SABTNL) opened the day (2 May) at Rs 55.05; rose 1.82 per cent to end the day at Rs 56.05. The price is higher than that which existed on 17 April – namely Rs 48. On the NSE, the scrip ended the day at Rs 55.75 (up 0.75 per cent).
Cinevistaas opened the day (2 May) at Rs 23.8 grew by 2.52 per cent to end the day at Rs 24.40 on the BSE. The scrip is still hovering around the same level as it was placed at Rs 21.30 on 17 April and Rs 22.85 on 11 April. On the NSE, the scrip opened at Rs 25.35; rose by 3.73 per cent to end the day at Rs 25.00.
Creative Eye opened the day (2 May) at Rs 10.45 and dropped to Rs 10.05 on the BSE. On the NSE, the scrip rose by 4.90 per cent to end the day at Rs 10.70.
The ETC Networks scrip rose opened the day at Rs 39.8; dropped by 2.39 per cent to end the day at Rs 38.85 on the BSE. The scrip was placed higher at Rs 41.15 on 17 April and Rs 39.80 on 12 April.
ETC Networks Ltd announced an audited profit after tax of Rs 141.3 million for the year ended 31 March 2003 as compared to a net loss of Rs 141 million during the previous year. The company board, which held its meeting on 28 April, recommended a payment of 20 per cent maiden dividend.
On 29 April, the ETC Networks scrip opened the day at Rs 41.45 on the Bombay Stock Exchange (BSE) and dropped 2.29 per cent to end the day at Rs 40.65. The 52-week high and low of the company were Rs 99 and Rs 33 respectively.
Tag: Zee results
-
Media stocks gain as analysts greet Zee results
-
Zee results confirm robust business model: Merrill Lynch
MUMBAI: The Merrill Lynch report dated 28 April 2003 states that the Zee’s 4QFY03 result reinforces the analysts’ confidence in Zee’s business model. However, the report adds that the delay in return of advances given to Buddha Films and likely investment in Essel group’s DTH venture (up to maximum of 20 per cent limit) remain a concern.
The Merrill Lynch report still maintains a “BUY rating on the Zee stock based on:
1. Attractive valuations at 10x FY04E EPS vs the Asian (ex-Australia) average of 16x.
2. Rise in subscription revenues driving Zee’s leading earnings growth in the global sector (20 per cent YoY) during these challenging years.
3. Recent stock underperformance; and
4. Improvement in the balance sheet.
The following are some relevant excerpts from the report:
* Zee delivered 52 per cent YoY growth in recurring PAT (excl. earlier period PAT of Rs 20 million for subsidiary, Padmalaya and Rs 386 million extraordinary write-off), to Rs 800 million in tough times.
* Importantly, Zee turned cash flow positive and this led the company to repay term debt of Rs 1.13 billion. Net debt at end-FY03 was Rs 5.9 billion – down 11 per cent YoY. This was aided by recovery from debtors (170 days in FY03 vs 213 in FY02) and should address market’s liquidity concerns.
* Sales grew 17 per cent YoY. A 16 per cent YoY fall in ad revenues led by the World Cup on competing channels was more than offset by 54 per cent YoY growth in global subscription revenues and consolidation of film subsidiary, Padmalaya.
* Ignoring changes in the base (4Q FY02) made by the company to match unaudited nos. with audited FY02 results, Merrill Lynch analysts estimate that the 4Q recurring PAT grew 33 per cent YoY in a tough quarter.
* The report mentions that the debtor days were further reduced to 155 in May 2003 according to the Zee management. This could lead to repayment of another Rs 1 billion of loans in 1Q FY04, adds the report.
* The report says that the Zee management claimed its readiness to supply a digital set-top box at Rs 3,500/pc (US$74) on the conditional access system (CAS).
* The report says that the key risk is the company’s ability to increase penetration of Zee Turner in domestic pay markets and maintain the creative execution of the broadcasting business. -
Zee results: share prices down, analysts maintain ratings
MUMBAI: Zee Telefilm’s 3QFY03 results has evoked mixed reactions from the market and analysts. The Zee Telefilms scrip opened at Rs 86.85, dropped 9.15 per cent to Rs 78.90 on the Bombay Stock Exchange. The stocks were actively traded and volumes rose to 4,337,401 as compared to 2,223,366 shares traded yesterday.
On the National Stock Exchange, the scrip opened at Rs 86.55 and dropped 8.78 per cent to Rs 78.95. A total of 12,504,715 shares were traded as compared to 8,699,439 on 28 January 2003.
The media sector updates by JP Morgan, Motilal Oswal Securities, Merrill Lynch and Kotak Mahindra Securities maintained their earlier recommendations. Here are some excerpts from the reports prepared by the media analysts.
1) JP Morgan report:
JP Morgan’s Zee Telefilms update dated 28 January 2003 retains its overweight rating and observes that Zee trades at multiple lower than the Indian market. It adds that the stock should see its premium expand going forward with significantly superior growth in earnings than the market.
The Morgan report states that it isn’t changing the 4QFY03 forecasts as: Zee’s costs have been better managed; and Padmalaya Telefilms results are to be consolidated in 4Q03. It adds that the overweight stance is underpinned by: improving program ratings; structural changes lead by legislation in the cable industry; and improving overseas business. All these factors are very much in place, as per the report.
The Morgan report expects the momentum in earnings to continue to improve and be the primary engine for stock performance and premium expansion. It also states that while Zee’s profits were about 15 per cent below expectations, the results beat consensus estimates by 5 per cent.
The negative surprise came primarily from advertising revenues, which dropped 9 per cent YoY for Zee (excluding ETC). The report expects flat QoQ ad revenues and adds that ad revenues are likely to be weak even in 4Q FY03 due to the World Cup. The report hopes that there could be an improvement as better ratings shows through in revenues.
A forex loss of Rs 30 million also impacted Zee’s profits in 3Q FY03, the Morgan report states. On the pay revenue front, Zee’s numbers were in line with expectations and were the key driver of earnings in the absence of a kicker from ad revenues, growing 42 per cent YoY.
It adds that pay revenues should accelerate further due to a 20 per cent price hike taken in January 2003. Zee’s days receivables declined to 184 days from 198 days in the previous quarter, it notes.
The report recalls that the Zee management reiterated that debtors would be brought down to 140 days by end FY03. In the conference call, the management mentioned that the receivables on account of Buddha films (Rs 1.58 billion) would be paid by end FY03. Additionally, Zee would likely pay down Rs. 2-2.5 billion debt in the next quarter.
Given the strength in earnings, the Morgan report expects the stock price to rise from current levels.
2) Motilal Oswal Securities Inquire Research report:
Motilal Oswal Securities’ Inquire Research (MOSt) report on Zee’s 3QFY03 dated 28 January 2003 reiterates its ‘Buy’ status with a target price of Rs 130.
The report states that the three key triggers to stock price performance in the short term are: free to air bouquet price if fixed at Rs 50-70 per month per subscriber; repayment of Rs 1.6 billion liability by Buddha Films to Zee; and reduction in debtor days to approximately 150-day levels. In the long term, the report is positive on the domestic subscription revenue upside post-CAS implementation.
The MOSt report also adds that Zee Telefilms has reported results lower than expectations. While PAT has been marginally lower than expected, revenues have been lower by Rs 233 million due to significantly lower advertising revenues than expected, it states. EBITDA margin at 35 per cent was also lower than expectation of 37.7 per cent primarily on account of higher pay channel costs paid by Siticable to pay broadcasters.
The report maintains that the stock has seen a sharp correction in the recent past and there isn’t any likelihood of a downside from hereon.
3) Kotak Mahindra Securities report:
Kotak Mahindra Securities’ report dated 28 January 2003 states that Zee reported a strong quarterly performance with a 29 per cent QoQ net income growth to Rs 688 million aided by a benign accounting practice on movie amortization.
The report states that the underlying performance is less impressive as lower programming cost (aided by low amortization of movie costs) has primarily boosted EBITDA (+34 per cent QoQ to Rs 1.1 billion). Ad revenues were sluggish at Rs 1.7 billion (+20 per cent QoQ, -2.4 per cent YoY) despite peak festival season and screening of costly movies.
Domestic pay-TV revenues grew by a disappointing 2.5 per cent QoQ to Rs 378 million. The Kotak report retain their earnings estimates and DCF based target price is Rs 100; key risks include failure to consolidate ratings for mainline channel and lower-than-expected growth in domestic pay-TV revenues.
The Kotak report also expresses concerns that the fourth quarter may not look that good. Despite nine-month net income at Rs 1.7 billion versus the full year expectation of Rs 2.07 billion, the report retains its estimates.
The report also notes that Zee would have to provide for amortization of movies in 4QFY03 and subsequent quarters without commensurate revenues. Also, Zee will have to compete with cricket world cup for advertising dollars during Feb-March period. Finally, it mentions that Zee’s full year tax rate will be above the 26.5 per cent reported so far according to the management.
4) Merrill Lynch report:
The Merrill Lynch report on Zee Telefilms 3QFY03 dated 28 January 2003 states that he new management has delivered. Zee 3Q PAT Rs 688 million up 32 per cent YoY (6 per cent ahead of MLe), reinforce the view that strong growth in pay revenues will more than compensate for its stagnant ad business.
The report believes that while recent stock under performance leaves scope for appreciation, ensuing cricket World Cup (a once in 4 year event) would keep pressure on its 4Q ad revs and hence, the stock price in the near term.
The Merrill Lynch report states that the key positives of 3Q FY03 were: strong EBITDA margin expansion to 35 per cent from 33.9 per cent in 3Q FY02 led by growth in global pay revenues (38 per cent YoY) & cost cutting; significant reduction in losses of education business (down 76 per cent YoY) & turnaround in cable business (loss to profit in 3Q FY03).
The Merrill Lynch report also mentions that the key shortcomings of 3Q were: Ad revenues were down 0.7 per cent YoY despite consolidation of ETC (8.9 per cent excluding it), indicating pressure due to ensuing world cup; Debtor day down only 3 per cent to 184 days in 3Q from 190 in 2Q; Sales were lower by 8.7 per cent v/s MLe as Zee didn’t consolidation recently acquired Padmalaya in 3Q (will start from 4Q).