TV18

TV18

TV18, DLF

 TV18, DLF

TV18, DB Corp, HT media

TV18, DB Corp, HT media

TV18 Ltd

TV18

TV18

TV18

TV18 Ltd

TV18 Ltd

Television Eighteen

Shareholders can avoid subscribing to the rights offer of Television Eighteen (TV18) considering the business uncertainties and relatively expensive valuation that the offer is being made at. The company has several properties across broadcast and Internet that are leaders in their genre.

TV18 is offering one share for every two held in this rights issue, priced at Rs 84. Although this is at a 14 per cent discount to the current market price, the valuations are still expensive. At the offer price, the enterprise value-to-sales (EV/Sales) multiple of TV18 would be four times its 2008-09 sales, which is much higher than a profit-making Zee News or its loss-making peer, NDTV.

Advertising volumes and pricing — the key revenue drivers for the media industry — are stabilising, but are yet to return to high growth levels. Given that TV18’s businesses are highly reliant on advertising revenues, most of its divisions are currently reporting operating losses.

The company reported an operating loss in 2008-09 with the picture improving to a 3 per cent positive operating profit margin in its June quarter financials. The entry of newer business channels may also pose a threat to market share over the long term.

News operations, the key

TV18 owns two of the leading business channels in the country — CNBC TV18 and CNBC Awaaz — which are leaders in their respective genres in both the English and Hindi languages. In Hindi especially, this is more pronounced as the market has CNBC Awaaz and Zee Business as the only players.

In the English business news space, there is competition, but CNBC-TV18 still maintains a considerable lead over the other channels. But recent TAM reports on viewership suggest that ET Now, a new launch, has managed considerable inroads; this has now become available on DTH platforms.

UTVi is reportedly tying up with Bloomberg TV and may also be able to offer competition, though not of the scale of ET Now. However, all the three competitors (including the second largest viewed NDTV Profit) have some way to go before they manage to edge out CNBC from its leadership position.

Revenues from this segment were down 25 per cent in the June quarter over last year. But with a revival in advertising in key segments such as Telecom and BFSI, as well as that from a spate of new IPOs and NFOs, the sector, as a whole, and TV18, in particular, may benefit.

Television advertising is estimated to grow by 12.2 per cent annually to Rs 15,000 crore by 2013, according to a recent report on media by PWC.

This would be one of the key reasons for investors to hold on to the stock apart from the fact that being a pay channel, subscription revenues may increase given that DTH subscribers are increasing rapidly and number over 11 million currently.
Web18 holds potential

Web 18 has many properties such as moneycontrol.com, in.com and indiaearnings.com that are among the top visited Web sites in India, with moneycontrol leading the way. The company also holds stakes in sites such as Yatra.com, a leading travel booking Web site.

Other sites such as in.com, though gaining hits, face considerable competition from Rediff, Indiatimes and Sify that offer a complete range of content, subscription and transaction-based services.

But this segment has been increasing contribution to revenues (14-15 per cent of revenues currently) and grew at eight per cent in FY-09 and even in the recent June quarter and has reduced operational losses.

Internet advertising is set to touch Rs 2,140 crore by 2013, growing at 27.9 per cent annually, according to a FICCI-KPMG media report.

The publishing foray with Forbes, where Rs 30 crore of the rights issue proceeds are set to be invested and Newswire18 which has reduced operational losses substantially are two additional segments to watch out for.
The offer

The company is looking to raise a little over Rs 504 crore from this issue. This is mainly to repay a part of its debt (Rs 300 crore) and the rest for investment in some of its divisions and general corporate purposes. For the year-ended March 2009, TV18 held over Rs 977 crore in the form of secured and unsecured loans from banks and public deposits. Despite the repayment of some loans, the debt level still appears high. It may come down to some extent if the Rs 164 crore that the company has in the form of cash and bank balances are used to for repayment.

The investors have the option of paying 25 per cent of the issue price on application, 35 per cent on the ‘first call’ and the balance 20 per cent and 20 per cent on the ‘second call’ and the ‘third call’ respectively.

via BL

TV18

TV18

TV18

TV18

Television Eighteen India

We recommend a buy in Television Eighteen India (TV18) from a short-term trading perspective. It is clearly visible from the charts of TV18 that after encountering significant resistance around Rs 250 in august, it resumed its long-term downtrend and declined sharply. However, the stock found support at Rs 53, recording a 52-week low in November and reversed direction. A prolonged positive divergence in the daily relative strength index (RSI) supported this trend reversal. The stock has been on a short-term up trend from its 52-week low. While trending up, it breached its 21-day moving average recently. On December 15, the stock jumped by 8 per cent accompanied with heavy volume. The daily RSI is on the verge of entering the bullish zone and weekly RSI is recovering from the oversold territory. We are bullish on the stock from a short-term horizon. We expect the stock’s current rally to prolong until it hits our price target of Rs 92. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 77.

Today's Pick - TV18

We recommend a ‘buy’ in Television Eighteen India from a short-term horizon. From the charts of the stock we note that its intermediate-term downtrend, which began from the early January high of Rs 599 ended at the 52-week low of Rs 184 on 18 July. The area around Rs 200 is a strong support from a long-term perspective as well.

The stock has been on short-term uptrend from this trough. During the course of this rally, the stock has moved above the 21 and 50-day moving average lines. The momentum indicators in both the daily and the weekly chart are beginning to look up.

We are bullish on the stock in the short-term. We anticipate the stock’s up move to prolong until it hits our price target of Rs 280 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 233.

Via BL

Television Eighteen

Television Eighteen India (TV 18) has delivered a disappointing set of results in the April-June quarter. While the core news operations, led by CNBC TV 18, remained healthy, sustained losses in the Web and newswire operations have resulted in the frontline media conglomerate reporting a quarterly loss on a consolidated basis.

While the stock has corrected more than 60 per cent from its peak, we expect the underperformance to continue in the near-term, as initial losses from its foray into print, launch of the new regional business channel and new additions to its web properties are likely to further erode profits over the next year.

Impact of fresh competition (UTVi and the business channel planned by the Times Group) on the advertising revenues of its core business news operations would also have to be keenly monitored. Shareholders with a three-five year perspective can hold on to the stock, as it offers exposure to promising businesses. However, valuation remains expensive, with the stock (Rs 217) trading at 50 times its trailing four quarters’ stand-alone earnings per share.

Those who still have a significant exposure to the stock can consider switching a part of their holdings to stocks with brighter near-term prospects.
Disappointing quarter

Widening losses in its Internet operations has taken the sheen off TV 18’s consolidated financials in the April-June quarter, with the company turning in a net loss of Rs 9 crore against a marginal profit in the corresponding previous quarter.

Revenue growth of its core news operations ‘moderated’ to 30 per cent, from the over 50 per cent levels registered in recent years. Operating margins, however, expanded by about 300 basis points. TV 18’s Web operations recorded a 41 per cent growth in revenues year-on-year, on the back of growing web portal additions . The business, dominated by leading financial Web site moneycontrol.com, posted an operational loss of Rs 5.6 crore, however, on a revenue base of Rs 13 crore during the quarter.

With another portal, in.com(along the lines of Rediff and Sify), lined up for launch in the next couple of months, the business is expected to break even only in FY-10.

The newswire business delivered a five-fold growth in revenues, even as losses remained flat at Rs 3.8 crore. The management expects the business to break even in a year’s time, once corporates that have the newswire on a free-trial mode begin to pay for content.

Overall, the strength of the news operations did help the company report an operating profit margin of 17 per cent for the quarter. However, a substantial jump in interest costs completely eroded profits. The losses would have been more pronounced, had it not been for a healthy contribution from other income.

. With operational costs mounting on the back of increasing competition in the business news channel space and the threat of a slowdown in advertising looming, servicing a higher interest outgo could be a challenge.
On investment mode

TV 18 has lined up aggressive expansion plans. The company has allocated Rs 100 crore to fund its print foray and plans to launch a Hindi business daily ( Tie-up with Jagran Prakashan), an English business Magazine (tie-up with Forbes) and an English business daily as well.

The Hindi business daily is expected to be launched by the end of the year. While existing print players such as The Economic Times and Business Standard have launched Hindi editions in cities such as Delhi and Mumbai, TV 18 is expected to rollout editions on a pan-India basis.

Given TV 18’s dominance in business news, the strengths of its partners and the access to significant publishing facilities, courtesy the Infomedia acquisition, the print foray appears promising. However, the business will have a long gestation period.

TV 18 also intends to invest Rs 30 crore in launching a Gujarati business channel, hoping to duplicate the success of Awaaz and consolidate its leadership position in the business news channel genre. About Rs 50 crore will be pumped into the web business as well.

While each of these businesses appear promising, it could take at least two-three years for these new initiatives to pay off.

The possibility of higher operational costs in an intense competitive environment in its core operations also increases the risk of the loss-making period prolonging. and prolong the loss-making period.

Shiv-Vani Oil, Sun Pharma , TV18, Ashok Leyland, Unity Infraprojects, Indotech Transformers, Corporation Bank, PNB, HDFC Bank, ITC, Cadila Healthcare

Shiv-Vani Oil, Sun Pharma , TV18, Ashok Leyland, Unity Infraprojects, Indotech Transformers, Corporation Bank, PNB, HDFC Bank, ITC, Cadila Healthcare

TV18, Automobiles, Cement

TV18, Automobiles, Cement

Today's Pick - TV18

We recommend a buy in TV 18 from a short-term perspective. We note that the stock has been on an intermediate-term downtrend form its January 2008 high of Rs 599 levels. However, the stock found support at around Rs 300 level in late April and again in mid May the stock found support just above this level.

The stock has formed a falling wedge pattern spanning over the past four months, which is a bullish pattern. Falling wedge pattern has occurred at the bottom of the downtrend indicating reversal in the current trend. The daily momentum indicator has found support at 40 levels recently and bounced up. The daily moving average convergence and divergence is displaying positive divergence, supporting our bullish view.

We are bullish on the stock in the short-term. We expect the stock to rally to our price target of Rs 360 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while keeping the stop-loss at Rs 300

Company Background - TV18

Television Eighteen (TV18), India's premier business and consumer news broadcaster and leading media content provider, was incorporated on 24th Sep 1993 as Television Eighteen India Private Ltd. It Became a public limited Company in 2nd November 1994 and Subsequently Renamed as Television Eighteen India on 2nd Jan 1995. Over the last decade, the Company has provided prime time television content to almost all leading satellite channels in India including BBC, Star Plus, Sony Entertainment Television, Zee, MTV and Discovery. Raghav Bahl and Sanjay Ray Chaudhury are the promoters of the Company.

CNBC TV18 is India's leading business news channel. The channel is a joint venture between CNBC Asia-Pacific and Television Eighteen India Ltd., with TV18 holding 90 percent of the stake.

TV18 owns studios in New Delhi and Mumbai and has a news gathering network of over 200 journalists across the country.

At Present the TV18 India Ltd five Subsidiaries namely Television Eighteen Mauritus Ltd, e-eighteen.com Ltd, I.News.com, Eighteen Entertainment India Ltd, Money Control Dot Com India Ltd and SRH Broadcast News Holdings pvt Ltd.

In 1996 the Company set up a wholly owned Subsidiary in Mauritius i.e's Television Eighteen Mauritius Ltd on receiving requisite consent from the Department of company affairs and reserve Bank of India. It also entered in to joint venture through its subsidiary to launch Asia Business News India (ABNi), the countries first dedicated 24-hour business news information channel.

In 1997, this venture suffered a major setback as ABNi, which was providing around 50% of the Companies revenue closed down following the merger of its parent, ABN with CNBC Asia, but regained its relationship the CNBC in 2003. CNBC-TV18 will now jointly brand a channel which was operated by TV18s Subsidiary and TV18 shall now own nearly 90% stake in the Channel and balance held by the CNBC Asia Pacific

In Dec 1999, the company came out with a public issue of 29,36,000 equity shares of Rs.10/- each at a premium of Rs.170/- per share. In march 2000 it incorporated e-eighteen.com pvt ltd, a subsidiary to house its internal interests. The subsidiary has acquired Moneycontrol Dot Com Private Ltd, the Company owning the highly successful financial portal, Money control.com

During 2001-2002, the entertainment part of the Companies business was hived off to 100% subsidiary viz Eighteen Entertainment India Ltd.

During 2002-2003 the company successfully restructured its relationship with CNBC in accordance with the new government guidelines for new channels. Tv18 previously held a 49% stake in the CNBC India Joint Venture in Mauritius. Under the new Guidelines CNBC-TV18 is now a jointly branded channel to be operated by TV18's subsidiary and TV18 shall now own a near 90% stake in the Channel company and the balance 10% being held by CNBC Asia Pacific. TV18 has also prematurely terminated its ad sales representation relationship with SET (Sony Entertainment Television) in April 2002 and has set up a dedicated inhouse marketing and sales team for the channel.

In 2004 A Large 40,000 Sq Ft plus facility was set up in Mumbai with state-of-the-art broadcast equipment and studios.

During 2005 the Company entered in to General News Space. To Facilite this ambitious expansion, the Company started work on a 60,000 Sq ft studio in Noida, which will be operational in the fourth quarter of the year. Turner International (Turner) and Global Broadcast News (GBN), a TV18 Group Company, announced a partnership to launch a co-branded, 24-hour, English-language general news channel in India. Renowned TV journalist Rajdeep Sardesai spearheads GBN's foray into the general news space as the Editor-in-Chief of the service. The co-branded service, CNN-IBN, will build upon the strong foundation of TV18's newsgathering experience and infrastructure in India, bolstered by CNN's eminent and extensive global news network.

Under the terms of the agreement, GBN's proposed channel - formerly known as India Broadcast News (IBN) and now co-branded as CNN-IBN - will have access to CNN's trademark live breaking news as well as key feature programmes. This unique alliance will, for the first time ever, enable Indian viewers to view local news as well as relevant global news from CNN, the world's news leader, on the same platform. The new channel will focus on providing robust and high quality news from every corner of India with a complete commitment to the needs and aspirations of the Indian viewer, while CNN International will continue to deliver global news to Indian viewers.

Headquartered in New Delhi, the channel will be supported by over 20 bureaus nationwide, along with a team of experienced newspersons and production staff, backed by TVl8's state-of-the-art broadcast infrastructure and newsgathering technology.

GBN, a TV18 Group Company, is a 74:26 joint venture between the TV18 Group and professionals - Rajdeep Sardesai, Sameer Manchanda and Haresh Chawla. GBN's charter is to launch channels in the general news space under the editorial leadership of Sardesai, one of India's most renowned TV journalists.

The company during 2005-2006, acquired a 50% stake in Channel 7 - a general news channel in Hindi, owned by Dainik Jagran Groupin April 2006. TV 18 group has recently revamped the editorial team and relaunched the channel with a new international look in June 2006. The company has done a JV with Asia's leading e-recruitment provider-jobstreet.com for a job search portal and launched yatra.in- India's first integrated online travel services company founded by TV18 and Norwest Venture Partners. During the year the company also launched a subscription based investment advisiory portal called poweryourtrade.com which has got over 75,000 paid subscribers

ABB, Siemens, Ambuja Cements, Areva, Cipla, Indiainfoline, TV18

ABB, Siemens, Ambuja Cements, Areva, Cipla, Indiainfoline, TV18

Live CNBC India - Watch Now!

Television Eighteen India: Hold

Through quick, successive moves in the print business, Television Eighteen India (TV 18) has added a missing link to its media value chain. With a presence that straddles television, Internet and soon print media, a demonstrated ability to strike the right partnerships to execute its plans, a leadership position in the electronic business news space and a clutch of Internet properties that hold potential for value unlocking, TV 18 remains the preferred stock in the media space.

Expensive valuations

But much of this is already captured in the stock’s current valuations, offering limited potential for strong upside in the near-term.

Adjusting for the valuation of its web properties (estimated at 15 times the likely FY-09 sales), the stock, at Rs 473, still trades at about 45 times its FY-09 earnings per share. This assumes significant growth rates for its existing businesses and success in new forays. But the company’s track record in execution inspires confidence, supporting our ‘hold’ recommendation.

However, TV 18 will remain in a heavy investment phase in the medium term. The print business has a longer gestation period than television and earnings could be impacted by losses from initial years; details are awaited on how the print business will be structured. Its flagship channel, CNBC TV 18, best known for its stock market focus, may suffer declines in viewership, should there be a change in investor sentiment.
Print plans in ink

TV 18’s long-expected foray into print has now been firmly inked. The Rs 178-crore acquisition of a 40 per cent stake in Infomedia India marked its entry into the segment. TV 18 intends to acquire a controlling stake in the company, by making an open offer to Infomedia’s shareholders for 20 per cent.

If the offer is not successful, TV 18 has the option to acquire an additional 13 per cent stake from existing promoters, ICICI Ventures.

The acquisition will provide the company access to the yellow pages directory business and, more interestingly, the special interest magazine segment, which includes magazines such as T3, Cricinfo, Overdrive and Better Interiors.

It will also provide it access to printing facilities. That would come in handy in publishing the English business magazine that TV 18 proposes to launch in 2008, in association with reputed business magazine Forbes Media.

This involves a content licensing arrangement and may extend to the introduction of other Forbes products, subject to regulatory approvals.

TV 18 also announced a simultaneous entry into the rapidly growing regional print market through a 50:50 joint venture with Jagran Prakashan, publishers of the leading regional newspaper — Dainik Jagran. Plans are on to launch a Hindi business newspaper in 2008, to be followed eventually by business newspapers in other regional languages.
Well-conceived strategy

The print business involves higher capex spends, requires an extensive distribution network, and a new player generally takes a longer period to penetrate the market and break-even compared with a new television channel, even if good content is taken as a given.

However, TV 18’s foray into the market appears, on first take, well conceived. The acquisition of Infomedia’s printing facilities, distribution network and a clutch of its brands may reduce time to market. TV18 also has strong partners in Forbes and Jagran Prakashan, which bring in their experience in print.

Secondly, it has entered the English business magazine segment, where there is less competition. In contrast, there are five-six players competing in the English business daily segment, some of them with considerable financial muscle. In the regional print segment, again, there is no existing business newspaper. TV 18 also has experience in Hindi business news, courtesy its Hindi business channel “Awaaz”.
Heavy investment phase

But TV 18’s recent forays are likely to require substantial investments over the medium term. Besides investing in the print business, it will have to continue to pump in money to improve the profitability of its recent acquisitions; Newswire 18 is still loss-making, while Infomedia’s earnings have been weighed down by declining margins.

Significant investments are also being made in Web 18, which operates web portals. This segment is not making money yet, although a series of acquisitions and new Web site launches has ensured a strong increase in revenues.
Value unlocking

Revenues from its Web operations in the first half of FY 08 were at Rs 21 crore, as against Rs 25 crore in the whole of FY 07. The portals attempt to get their revenues from not just advertising but also subscription, which brings some stability to the business model.

However, the losses from the Web business are a drag on profitability. TV 18’s operations on a stand-alone basis enjoyed margins of over 40 per cent in the first half compared to about 26 per cent on a consolidated basis. TV 18 intends to ultimately list the web business and unlock value; this is already captured in the current valuations for the stock.

But the timing of this event is uncertain and a significant delay in listing the subsidiary is a risk to the stock’s performance.

Moldtek Technologies, TV18, Aurobhindo Pharma

Mold-Tek Technologies
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs215
Current market price: Rs155

Unlocking value

Key points

• KPO business growing exponentially: Mold-Tek Technologies (MTT) has gained the critical size and required expertise in the niche area of structural engineering KPO services. The size of the opportunity in this space is huge and the company has taken inorganic initiatives to move up the value chain and establish presence in the key overseas markets. Consequently, we expect its KPO business to grow at a CAGR of around 160% over the next three years.
• Expanding the plastic packaging service business: In the recent past, the company invested in modernisation and expansion of its manufacturing units in the plastic packaging business. It also bagged orders from large and reputed clients in the oil & lubricant business, further consolidating its leadership position in the segment. The plastic packaging business is likely to grow at a CAGR of over 20% in the three-year period FY2007-10.
• Unlocking value in KPO business: The company has filed an application for the de-merger of its two businesses into separate entities. We believe this would result in the re-rating of the KPO business that is not only growing at an exponential rate but also enjoys much higher margins. We value the KPO business alone at Rs189 per share.
• Attractive valuations: With its revenues and earnings expected to grow at CAGR of 31% and 66% respectively over FY2007-10, MTT is attractively valued at 7.6x FY2009 and 5.3x FY2010 estimated earnings (as the existing combined entity). Taking into account the de-merger ratio also (holders of 100 existing shares to get 72 shares of the plastic company and 28 shares of the KPO company), the KPO business alone is valued at Rs189 per share. We recommend a Buy call on MTT with a price target of Rs215.

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STOCK UPDATE

Aurobindo Pharma
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs914
Current market price: Rs527

Aurobindo enters Omnicef market
Aurobindo Pharma (Aurobindo) has received approval from the US Food and Drug Administration to manufacture and market the oral suspension form of Cefdinir 125mg/ml and 250mg/ml in the USA. Cefdinir is the generic version of Abbott Laboratories' (Abbot) blockbuster product Omnicef in the USA, having a market size in excess of $850 million. Approximately $533 million of this comes from the suspension form of the product, which is used to treat a variety of ear, sinus, nose, throat and skin infections.

Television Eighteen India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs571
Current market price: Rs469

TV18 to launch a business daily
Mirroring our expectations, TV18 has announced entering the business daily space. The company has entered into a 50:50 joint venture with Jagran Prakashan for launching a Hindi business newspaper. The duo would also launch business dailies in other Indian languages. TV18 has aggressively entered print media by acquiring Infomedia India, which provided it a platform for entry and expansion in the print space. TV18 recently announced acquisition of Infomedia India a leading publisher of special interest magazines and Yellow Pages (for details refer our update "TV18 acquires Infomedia" dated December 12, 2007). The company further forged a partnership with Forbes Media, a leading global business publisher to launch a business magazine in January 2008 (refer our update "TV18 partners Forbes").