Tv18 Broadcast Net Income dropped on 57.0% in 2015 and EBITDA Margin showed almost no change

15-04-2015 • About Tv18 Broadcast ($TV18BRDCST) • By InTwits

Tv18 Broadcast reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 11.0% in FY2015, 10.8% in FY2014, 6.8% in FY2013, -4.2% in FY2012, 5.2% in FY2011
Tv18 Broadcast has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 6.5%.
CAPEX is quite volatile: 948 in FY2015, 606 in FY2014, 393 in FY2013, 486 in FY2012, 60.3 in FY2011
The company has potentially unprofitable business model: ROIC is at 5.3%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Tv18 Broadcast ($TV18BRDCST) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	8,092	13,928	16,907	19,681	23,184	17.8%
EBITDA	421	-590	1,156	2,129	2,552	19.9%
Net Income	-174	-738	-254	1,036	445	-57.0%
Balance Sheet
Cash	1,672	2	2,694	2,884	1,677	-41.9%
Short Term Debt	3,377	6,704	3,830	3,879	3,547	-8.6%
Long Term Debt	1,615	2,942	1,673	1,018	1,464	43.8%
Cash flow
Capex	60	486	393	606	948	56.4%
Ratios
Revenue growth	-71.2%	72.1%	21.4%	16.4%	17.8%
EBITDA growth	-143.0%	-240.0%	-296.0%	84.2%	19.9%
EBITDA Margin	5.2%	-4.2%	6.8%	10.8%	11.0%	0.2%
Net Income Margin	-2.2%	-5.3%	-1.5%	5.3%	1.9%	-3.3%
CAPEX, % of revenue	0.7%	3.5%	2.3%	3.1%	4.1%	1.0%
ROIC	2.4%	-6.4%	2.7%	4.0%	5.3%	1.3%
ROE	-3.4%	-10.9%	-1.3%	3.1%	1.3%	-1.8%
Net Debt/EBITDA	7.9x		2.4x	0.9x	1.3x	0.4x

Revenue and profitability

The company's Revenue jumped on 17.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 6.7% to 2.5% in FY2015.

Net Income marign decreased on 3.3 pp from 5.3% to 1.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Tv18 Broadcast's CAPEX/Revenue was 4.1% in FY2015. CAPEX/Revenue increased slightly on 0.60 pp from 3.5% in FY2012 to 4.1% in FY2015. Average CAPEX/Revenue for the last three years was 3.2%.

Return on investment

The company operates at low ROIC (5.30%) and ROE (1.30%). ROIC increased slightly on 1.3 pp from 4.0% to 5.3% in FY2015. ROE decreased slightly on 1.8 pp from 3.1% to 1.3% in FY2015.

Leverage (Debt)

Debt level is 1.3x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 0.9x to 1.3x in FY2015. Debt increased on 2.3% in FY2015 while cash dropped on 41.9% in FY2015.

Valuation

The company's trades at EV/EBITDA 28.0x and P/E 152.8x while industy averages are 10.5x and 26.1x. Tv18 Broadcast's EV/(EBITDA-CAPEX) is 44.5x with the industry average at 4.7x.

Management team

Avinash Kaul is a the company's CEO. Avinash Kaul has spent 4 years at the company.

Appendix 1: Peers in Broadcasting & Cable TV

Below you can find Tv18 Broadcast benchmarking vs. other companies in Broadcasting & Cable TV industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Balaji Telefilms ($BALAJITELE)	-53.5%	-2.3%	-1.0%	119.1%
Siti Cable Network ($SITICABLE)	-71.5%	12.0%	37.0%	41.6%
Hinduja Ventures ($HINDUJAVEN)	-78.3%	25.6%	31.8%	29.6%
Den Networks ($DEN)	-22.4%	10.0%	-21.7%	24.8%
B.A.G.Films & Media ($BAGFILMS)	-49.9%	55.3%	0.5%	22.9%
Median (9 companies)	-53.5%	10.6%	9.2%	22.9%
Tv18 Broadcast ($TV18BRDCST)		72.1%	21.4%	16.4%	17.8%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Entertainment Network (India) ($ENIL)	21.9%	32.1%	30.8%	32.4%
Zee Entertainment Enterprises ($ZEEL)	27.3%	24.4%	25.9%	27.6%
Dish Tv India ($DISHTV)	17.8%	25.5%	27.3%	26.4%
Den Networks ($DEN)	13.2%	7.3%	22.5%	24.8%
Siti Cable Network ($SITICABLE)	3.7%	1.6%	17.5%	19.9%
Median (9 companies)	16.6%	18.6%	21.0%	19.9%
Tv18 Broadcast ($TV18BRDCST)	5.2%	-4.2%	6.8%	10.8%	11.0%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Siti Cable Network ($SITICABLE)	10.2%	10.6%	80.9%	73.0%
Den Networks ($DEN)	8.4%	12.6%	60.4%	53.2%
Zee Media Corporation ($ZEEMEDIA)	3.8%	3.4%	5.9%	31.6%
Hinduja Ventures ($HINDUJAVEN)	8.8%	11.6%	65.8%	14.2%
Dish Tv India ($DISHTV)	70.0%	33.5%	32.2%	11.9%
Median (8 companies)	8.4%	10.6%	19.0%	13.1%
Tv18 Broadcast ($TV18BRDCST)	0.7%	3.5%	2.3%	3.1%	4.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Zee Entertainment Enterprises ($ZEEL)	21.6%	21.1%	24.2%	25.5%
Entertainment Network (India) ($ENIL)	13.4%	15.2%	14.8%	16.7%
Raj Television Network ($RAJTV)	-9.1%	10.1%	10.3%	11.5%
Dish Tv India ($DISHTV)	-14.4%	-2.5%	-4.6%	8.7%
Den Networks ($DEN)	9.2%	2.7%	8.1%	5.6%
Median (12 companies)	-1.3%	3.0%	3.8%	5.4%
Tv18 Broadcast ($TV18BRDCST)	2.4%	-6.4%	2.7%	4.0%	5.3%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Hinduja Ventures ($HINDUJAVEN)	0.8x	0.7x	5.9x	5.6x
Siti Cable Network ($SITICABLE)	23.2x	56.0x	9.5x	5.6x
Zee Media Corporation ($ZEEMEDIA)	-0.6x	0.2x	0.3x	3.0x
Dish Tv India ($DISHTV)	2.1x	2.1x	2.6x	2.0x
Den Networks ($DEN)	-0.8x	-0.5x	2.4x	1.7x
Median (9 companies)	-0.1x	-0.1x	1.5x	1.7x
Tv18 Broadcast ($TV18BRDCST)	7.9x		2.4x	0.9x	1.3x

Tv18 Broadcast stock price chart

Tv18 Broadcast financials

mln.	FY2010	FY2011	FY2012

Revenue	28,076	8,092	13,928
EBITDA	-979.331	421.2	-589.780
Net income	-1,095.590	-174.046	-737.795
CAPEX	80.144	60.335	485.7
Debt	4,720	4,992	9,646
Cash	2,383	1,672	1.974

About Tv18 Broadcast

TV18 Broadcast Limited, together with its joint ventures, produces and telecasts news and current affairs programs primarily in India. It operates Hindi and English business news channels, including CNBC-TV18, CNBC Awaaz, and CNBC-TV18 Prime HD; Hindi and English general news channels, such as CNN-IBN, IBN7, and News18; and regional news channels comprising IBN-Lokmat, ETV News, ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar, ETV Urdu, ETV Kannada, ETV Bangla, and ETV Haryana. The company also operates general entertainment television channels, such as Colors, Colors HD, Rishtey, MTV India, MTV Indies, Vh1, Sonic, Nick, Nick Jr., and Comedy Central; and regional entertainment channels, including ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati, and ETV Oriya. In addition, it operates HistoryTV18, a factual entertainment channel. Further, the company manages various services, including domestic channel distribution, placement, international channel distribution and advertising sales, new media distribution, and content syndication for broadcasters. Additionally, it is involved in the acquisition, production, syndication, marketing, and distribution of full length feature films in India, as well as in the distribution of Indian films in various international markets. The company was formerly known as ibn18 Broadcast Limited and changed its name to TV18 Broadcast Limited in June 2011. TV18 Broadcast Limited was incorporated in 2005 and is based in Noida, India. TV18 Broadcast Limited is a subsidiary of Network18 Media & Investments Limited.