About The Company
The Company owned by Mr Goyal , who bought revolution to the world of entertainment with a launch of single channel Zee tv and thereafter a series of channels has been associated to it.
Though the ranking of the channel has been reduced from number one to third position after facing a tough competition from the market including Star and Sony.
About The Results
The company has posted results for the third quarter ended 31/12/2008 where the consolidated revenues, on a YoY rose marginally by 5% at Rs.545.6 crore, its net profit slipped 26% to Rs 84 crore. The company has incurred a foreign exchange derivatives loss of Rs 11.6 crore in the quarter ended December 2008. OPM has fallen on a YoY from 49.47% to 35% and NPM has come down from 28.48% to 17.72%.
The slowdown has impacted the company more than one would have imagined. The technicians strike in Oct-Nov impacted the bottomlines. But more than that, advertising revenues have slumped and this has dented the overall performance. Advertising rates, all over have come down drastically but the company wants to keep holding on to its rates and prefers to clock in lower volumes than lower the rates. This might be good for the pride but for the financials of the company, this attitude does not bode too well. One has to move with the time and now when the times are bad, instead of depressing the bottomlines, it would have been prudent for the company if it had reduced rates. But if the same trend continues, which as such is expected till first half of FY10, does this mean that till then the company will not bring down the rates?
The company expects to earn revenue from its subscription income and for FY09, advertising revenue is expected to grow by 15% and subscription by 23%. The company trimmed its FY09 operating margin forecast to 25% compared with 28% last year. Q4 is expected to remain flat.
About The Stock
Entertainment sector has a whole is not a good pack and would not reward the investors at least.Short term gain on specific news could be made but having delivery position is not a good idea.
Disclaimer : I do not have any personal holding in this stock.