MORNING INSIGHT December 26, 2012 COMPANY UPDATE TV 18 BROADCAST LTD Ritwik Rai
[email protected] RICE S ECOMMENDATION +91 22 6621 6310 P : R .33 R : BUY TARGET PRICE: RS.40 FY14E P/E: 38.4X TAM Data Released, Colors at #1 in week 50 Colors has brought in strong GRPs for weeks 41-50, a period when the TAM data was suspended on account of DAS implementation. The channel stands #2 on the average over the period. Over the past two weeks, Colors has been the #1 channel in the Hindi GEC space. In the most recent week (Week 50), Colors stands at #1, with 239 GRPs. It is also heartening that Colors has emerged as the #1 channel in the digital markets, indicating that the channel has strong franchise in the metros. While the leads between top channels are small (the top 4 are separated by merely 48 GRPs), the data reaffirms that Colors carries potential to be the #1 Hindi GECs. We believe that fiction programming contributes significantly to Colors' GRPs, lend- ing sustainability to position in the top bracket. Summary table Colors - #1 in Week 50 (GRP, Hindi GECs, Week 50) (Rs mn) FY12AA FY13E FY14E 300 Sales 13,058 14,470 17,587 Growth (%) 10.8 21.5 250 EBITDA (472) 1,283 2,435 EBITDA margin (%) (3.6) 8.9 13.8 200 PBT (1,274) (385) 1,473 Net profit (1,108) (385) 1,473 150 EPS (Rs) (3.1) (0.2) 0.9 100 Growth (%) NM NM NM CEPS (Rs) (2.1) 0.0 1.4 50 Book value (Rs/share) 19.2 19.6 20.5 Dividend per share (Rs) - - - 0 ROE (%) (16.0) (1.9) 4.3 ROCE (%) (6.1) 1.9 4.7 Colors Star Plus Sony Zee TV SAB TV Life OK Net cash (debt) (8,136) (2,080) (2,400)