Tuesday, February 19, 2008

UTV Software Communications

Business .... Truly Diversified


Incorporated in 1990, UTV Software Communications Ltd has today emerged as one of India's leading Media & Entertainment companies.

The Company grown from a Television Production house, into an integrated media company with interests in Motion Pictures, New Media that includes Animation and Gaming, Television Content and Broadcasting. UTV has a strong international presence, with offices across Asia, UK and USA.

Business Units :
- Movies
- Interactive
- Television
- Broadcasting


Financial Highlight's :
Even without the dilution, the stock was trading at an expensive 28 times FY09; post the dilution, the multiple becomes 40 times higher, even though the company will earn through other income from the cash inflows.

While revenues could grow at 45-50 per cent over the next year touching Rs 650 crore plus in FY09, the pace of earnings growth will be slower.

In FY07,UTV’s operating margin was 8.5 per cent but is expected to average 20 per cent over the next few years as the business scales up.

Business Outlook :

UTV has a track record of creating good quality content and has collaborated with big directors to come up with hit films. It has shown aggression while making acquisitions for its gaming business.

However, the film business does involve risks even if UTV is de-risking the model by procuring a variety of rights and even though a portfolio approach could cushion losses.

Besides, the broadcasting business has a long way to go with 10 channels to be launched and could keep profitability under pressure for some time.

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