Television

JP Morgan gives overweight status to Zee scrip

MUMBAI: A JP Morgan Asia Pacific Research report dated 28 April 2003 has stated that Zee Telefilms has reported good 4QFY03 numbers and that advertising revenues performed in line with expectations in a tough environment, while subscription revenues continued to show strong growth.

Overall, the report adds that the earnings momentum will continue to be strong, especially on the pay revenue front, and there might be some positive surprises on the ad revenues front. JP Morgan has reiterated its "Overweight" status rating on the stock at the Rs 70 level.

The JP Morgan report appreciates the strict cost control measures implemented by the company - especially the sharp decline in the programming and employee costs. Additionally, the JP Morgan analysts are happy with the fact that the company has paid off Rs 1.13 billion of debt, which led to a reduction in finance costs.

The JP Morgan report says that there has been a significant reduction in the debtor days, which currently stands at around 155 days, and expects it to come down to 140 by 1QFY04.

The report mentions that the stock has fallen by 19.5 per cent in the past three months, contrary to expectations. However, JP Morgan analysts believe that the result vindicates their stance of strong fundamental growth.

The 4QFY03 earnings will set pace for further earnings momentum, says the report. It adds that the outlook for the company looks strong and the near-term triggers are positive - as the negative impact of the World Cup is over. The new programme launches are stabilising and getting better TRPs. Lastly, CAS should be a long term positive for the stock.

The following are some excerpts from the JP Morgan report on Zee results:

Advertising Revenues: In Line with Expectations 

The advertising revenues were in line with estimates, down 20 per cent Y/Y. However, the company has seen a pick up in the revenues after the World Cup. JP Morgan analysts are modeling in a 6.5 per cent growth in FY04 ad revenues, compared to a 10-15 per cent growth for C&S ad revenues.

The analysts believe that there could be upside to the numbers. Additionally, it is likely that one sees an end to the Y/Y drop in advertising revenues going forward and that will set pace for earnings growth.

Subscription Revenues: Growth Continues 

The subscription revenues continued on the strong growth path and were also in line with estimates. The international and domestic pay revenues rose by 37 per cent and 17 per cent respectively on a sequential basis. The international subscriber base grew to 800,000, while the domestic connectivity rose to 4.6 million from 4.5 million in 3QFY03.

Debtor Days: Down to 155 Currently 

Debtor days came down to 170 days in 4QFY03 from 184 days in 3QFY03. Management also mentioned that it is currently around 155 days and they expect it to go down to 140 by the end of the 1QFY04 as their ageing profile has improved significantly.

Operating Costs: Under Strict Control 

There was strict cost control exercised by the company. The total expenses (ex-Padmalaya) dropped 11 per cent Q/Q. This is attributable to a drop in the programming and transmission cost and also in the employee cost. The new programmes launched by the company cost significantly lower than earlier programmes.

Additionally, the lowering of employee cost due to decrease in employees, which the management had talked about in 3QFY03, is showing through.

Finance Cost: Rs 1.13 billion Repaid 

The company paid back long-term debt of around Rs1.13 billion. This led to a significant reduction in the finance cost. Additionally, the appreciation of the rupee also led to some benefits in finance cost. The management stated that they are going to reduce the debt by another Rs1 billion in 1QFY04E.

Tax Rate: Impact of Higher International Revenues 

There was a reduction in the effective tax rate to 21 per cent from 27 per cent. Management stated that this was primarily due to strong growth in international revenues, which enjoyed a tax holiday. With faster growth of international revenues, JP Morgan analysts might see the tax rates settling down at lower levels.

Write-off from Education Business 

The company took a one-time write-off of Rs 386.1 million. This was primarily due to assets in the education business and some inventories.

Overall, Good Results 

JP Morgan analysts believe that the market will likely receive these results positively. The analysts are impressed by the cost control measures that have been taken by management. 

Revenues have also performed in line with estimates, in the time of the World Cup. Additionally, the analysts believe that the market has not factored in the impact of the result as some details were awaited before the closing of markets. The stock has fallen by 19.5 per cent over the past three months, contrary to expectations. The result vindicates the stance of strong fundamental growth. The 4QFY03 earnings will set pace for further earnings momentum.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/cc.jpg?itok=vyxpkA3V
Comedy Central sets pace for ultimate celebration with over 100 hours of non-stop FRIENDS ultra marathon for its 6th birthday

Birthdays and New Years are great occasions to make resolutions for participating in marathons. However, this is one marathon which calls for hanging up your running shoes and grabbing the best spot in front of the telly with a bowl of munchies to keep you going because, for the first time ever in...

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/usports.jpg?itok=kTmil1B-
U Sports launches India's first ever Multi-Platform Multi-Game E-Sports Championship - U Cypher with MTV

The Indian E-Sports scenario is all set for a major revamp as U Sports, one of India’s biggest sports business companies in association with India’s No. 1 Youth Brand, MTV, announces the premiere of their all new month-long championship, U Cypher with MTV. Premiering today, on 19th January, the...

Television TV Channels Sports
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/dth.jpg?itok=SKeBAh70
TV ownership increased by 14% in 2017: IRS

After a gap of four years, the Indian Readership Survey (IRS), which documents the growth of the media industry, has been released for 2017. The survey methodology was criticised in 2014 and, therefore, was halted for an upgrade. This time, the sample size has been increased by 34 per cent to 3.2...

Television TV Channels Viewership
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/challenge.jpg?itok=evdSw-BZ
CNN-News18 launches 'If I Were FM Challenge'

As part of its Budget programming, CNN-News18 is launching the ‘If I were FM Challenge’. The campaign will encourage viewers to contribute their suggestions for the Union Budget. The channel will run an extensive on-air campaign to promote the same.

Television TV Channels News Broadcasting
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/BBC.jpg?itok=JOGTF9zH
BBC World News to Broadcast 'China's Chat Girls'

Lele Tao is an internet superstar in China’s $3 billion dollar ‘live streaming’ industry. With more than a million fans she can earn thousands of dollars a day singing, dancing, flirting, or often just chatting into her webcam. Fans buy her virtual gifts which she redeems for cash. In return she...

Television TV Channels News Broadcasting
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/anupam.jpg?itok=fMDsUqO6
PKL season 6 and 7 dates announced

The second most watched domestic league in India, Vivo Pro Kabaddi League owned by Mashal Sports and Star India announced the dates of sixth and seventh season.

Television TV Channels Sports
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/star-bharat.jpg?itok=kT6YtkU0
Star Bharat leads Hindi GEC (U+R) in week 2 of BARC ratings

MUMBAI: Star Bharat emerged as the leader in the Hindi GEC (U+R) genre dethroning Zee Anmol according to Broadcast Audience Research Council (BARC) all India data for week 2 of 2018.

Television TV Channels Viewership
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/aaj-tak-barc.jpg?itok=4sc6BHYP
BARC week 2: Aaj Tak leads Hindi News in all three markets

MUMBAI: Republic TV continues its leading streak in the second week of the year as well in BARC All India ratings. News Nation stays in the top five chart in week 2 of 2018 in Hindi News Rural market. Aaj Tak tops the chart again in Hindi News Urban market.

Television TV Channels Viewership
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/karan-bajaj.jpg?itok=jxlg_oWY
Dsport acquires India rights of tri-nation tournament in SL

Discovery’s sports channel Dsport has acquired the exclusive India broadcast rights of Nidahas Trophy 2018, a tri-nation international T20 tournament involving India, Sri Lanka and Bangladesh. The transaction was facilitated by Lagardère Sports, the global marketing consultant of Sri Lanka Cricket...

Television TV Channels Sports

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories