Balaji Telefilms Rating: Not rated; Aiming to break even by FY20 end

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Published: August 24, 2019 1:59:31 AM

TV realisation rose 12% y-o-y in Q1; coverage discontinued and rating withdrawn

Q1 revenue stood at Rs 0.8 bn (vs Rs 1.3 bn y-o-y).

Balaji Telefilm targets break-even (consolidated) by the end of FY20 on higher revenue from Zee5 partnership, strong movie slate (pre-sales of `1 bn) and cost-saving initiatives across TV shows. TV realisation rose 12% y-o-y in Q1 aided by market share gains (18% vs. 16% q-o-q). TV gross margin stood at 30% as new shows stabilised and cost- saving initiatives benefited.

ALT Balaji’s aggregate pay subscribers ramped up to 25.3 mn (21.3 mn in Q4; 27.3 mn currently). Management highlighted partnership with Zee5 on content-sharing model (60+ shows) from second half of the fiscal (all content to be behind paywall). Equity infusion in Alt

Balaji to be `1.5 bn
(`1 bn for content). As we are reviewing our coverage, we discontinue coverage on Balaji Telefilms and withdraw our estimates/rating.
Standalone performance (TV + movies)

Q1 revenue stood at Rs 0.8 bn (vs Rs 1.3 bn y-o-y). TV content revenue grew 21% y-o-y to `696 mn and gross margin stood at 30% (13% y-o-y; flat q-o-q). Ebitda margin stood at 12.8% (not comparable on IND AS adjustment), while PAT stood at `25 mn.

TV content

Content hours grew 15% to 196 hours; Avg rev/hour at `3.56 mn (+12% y-o-y).

ALTBalaji

Revenue stood at `123 mn (`58 mn y-o-y) with Ebitda loss at `393 mn (vs loss of `265 mn y-o-y). It added 5 shows on the platform in this quarter (currently 42 shows); the app remains among top 5 paid video-streaming apps according to App Annie.

Movies

No movies were released in Q1; release of ‘Mental hai kya’ and ‘Jabariya Jodi’ happened in Q2FY20 and 2 titles will be in H2FY20; production costs for all these movies have already been recovered via pre-sales (`1 bn). Management highlighted digital/music rights of the same have been sold to Zee Entertainment.

The company maintained guidance of `0.5 bn PBT in FY20. Inventory for movies stood at `0.68 bn and for digital shows stood at `1.46 bn at the end of the first quarter.

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