Beruflich Dokumente
Kultur Dokumente
January 3, 2013
Team The Pirates of Vastrapur arti!a Mitta" # P $sho! Varadhan # Shu%hra &hosh
The present investment ,"imate is /avoura%"e, supported %y stron( (ro0th despite recession1
#
2istorica" &ro0th Trends
Media Industry Historical Y-O-Y Growth 12.77%
G CA 8 R 9.1 %
30 20
strong C-.R of 9+#!( ):o:) despite recession, hence this growth rate is impressive 8 %&, print and films have continuously $een the ii dominant forces among all types of media channel
iii 8 In print media regional players are dominant forces
11.66%
10 0
"
,urrent Scope
1 00 "0
print and films contri$uting !'( of the volume )ear "*#" saw a #"+,,( C-.R over "*##, which is ii $ound to see a push in the future /igital advertisements 0 1ocial 2edia, /irect to 3ome iii 4/%35 are growing fast, are still much $ehind %& & print
1".80 %
32.10%
tio An im a g Ga m in Dig ital
22.#0%
! in g Ad ve ti
X n & VF
;
/uture /orecasts
owing to the change in the preference of audience 0 7esternization & favoura$le political climate
ii /igital growth is likely to outclass all other media
e!e"#s#on
Pr#nt
F#!$
channels and is likely to overtake Out of home and Radio advertising $y "*#,
iii %& & print would continue as most dominant ad media
Forecasted (2017)
'ut, ,reativity and audience en(a(ement is an issue, the industry is far %ehind 0estern media in severa" aspects and chan(in( audience tastes is a cha""en(e1
i
1 Ta"ent ,onstraint
ii
4ac! of 5ua"ity ta"ent a %i( issue particu"ar"y in animation, (amin( and advertisin( ,han(in( audience taste demands creativity
i 2i(h (ro0th sectors are e*cessive"y c"uttered vi61 TV, print and +i(ita" ii
i 2
'ut, for fe0 sectors the pie itse"f is increasin( 7(1 &amin( and +T2
Idea" investment areas 0ou"d %e ones that offer hi(h (ro0th, are re"ative"y non;cyc"ica" and have re"ative"y sta%"e, competitive ta"ent poo"
<ith the economic do0nturn, %usiness e*ecutives are a"so (ettin( more conscious a%out their advertisin( spendin(,
7*ecutives 0ho a(ree or stron("y a(ree 0ith ; =I>m an*ious a%out the future?
2um$ai
/elhi
<olkata
Bangalore
2um$ai
/elhi
<olkata
Bangalore
"32 %0&
1" 00
7"6
1#99 %71"&
1667 %168&
Source: Ind#astat'co$
"" 0 "0 0 #0 0
1360 %$307&
10 00 0
78#
"00 0
2009$10
2010$ 11
2011$ 12
2012$ 13
2009$10
2010$ 11
2011$ 12
2012$ 13
2009$10
2010$ 11
2011$ 12
2012$ 13
$"00
,ore +rivers
i Rising =iteracy Rates
,ore +rivers
i /igitization 4/%35 is a $ig fund puller
,ore +rivers
3igh penetration & loyalty of the %. ii Regional and vernacular markets iii continue to defy gravity
Increase in %& channels, niche seg ii >olitical environment is highly iii supportive of more investments
&iewerships continuously rising ii iii o+ of Block$usters and 1uperhits rising, leading to multi:crore profits
,autious investment is on the rise, prime focus is on di(ita" and fi"m industry o0in( to their past (ro0th fo""o0ed %y print <ith phase 3 a""ocations, 3adio %usiness 0ou"d %e "i!e"y to attract more investments
+i(iti6ation is ta!in( off at a very fast pace "eadin( rise to ne0er media avenues
Prime Inferences
i 3uge .overnment support owing to tracking ease
21O economics likely to see a huge improvement ii &ery attractive addressa$le market $ase 4!! iii million5
88
,ore Insi(hts
i >olitical environment strongly in favour of growth
70 60 "0 #0 30 20 10
G CA R % 7 .9 3 8 "0
"*#? .overnment highly likely to support the move ii -venues for I>%& are likely to $e opened up soon iii
26
2010$11
2011$ 12
2012$ 13
2013$ 1#
201#$ 1"
@Auita$le revenue share across the value chain iii =ower $urden of carriage fees iv Increased a$ility to invest in differentiated and v sophisticated content
ey P"ayers to 0atch out for Tata S!y, @ee +ish TV, $irte" +i(ita" TV and 3e"iance 'i( TV
0hi"e traditiona" media is sti"" (oin( stron( 0ith stron( %ase in re(iona" mar!ets
%&
!+B'(
##+*,(
OO3 ;+##(
/I.I%-= ;,+9*(
"**! "*#"
"**! "*#"
"*#? .overnment highly likely to support the move ii -venues for I>%& are likely to $e opened up soon iii
M'(
200 0
!5#!
ii iii
1"0 0
!$!7 !!"5 ##
100 0 "00
i ii
= Capital -sia
373 +$!!
35
0
+$!+
+$!$
+$!!
+$!+
Trends in Ta*ation +irect Ta*ation 3eadline corporate taC remains the same Indirect Ta*ation 1ervice taC eCemption w+r+t+ copyright in cinematographic films
1Source: P(C, Sector Forecast, Med#a ) *nterta#n$ent, 2013, Cr#s#! Researc+, Med#a ) *nterta#n$ent, 2013 2, co$pre+ens#"e !#st o- dea!s #s pro"#ded #n ,ppend#. 1
Thou(h cha""en(ed 0ith a 0idened (ap in s!i""s, the present po"itica" scenario thro0s open a p"ethora of opportunities to improve the investment c"imate1
,urrent /+I Investment caps in Media Sector Positive /orei(n Investment Sentiment
i Fudiciously chosen investments are on the rise >rivate eAuity players have a perfect ii time to evaluate cash strapped media sectors and provide them the much needed funds for unlocking their value %he political scenario is favoura$le, iii driven $y favoura$le policy measures
"'(
1" 0% 10 0% "0 % 0%
)C*!
F+ Radio
Rationalization of entertainment taC ii .overnmentDs formal support to encourage formal iii skill development and training
iv >hase ; licences to facilitate Radio operations
Important Trends Aif anyC /ou$le digit growth for last ; years, advertising rates same, volume high &olume advertising has $een the key 2o$ile radio, a huge hit, huge share of local advertising approC+ ,B(
)ur 3atin(1
Industry Insi(ht 8 o growth in private F2 since "**' auctions, delay in >hase III $idding, hampering the profita$ility $adly 8 Hnavaila$ility of freAuencies in 2etro cities 0 a $ig issue, no measures even in >hase III auctions 8 Overall Industry RatingI Industry Insi(ht 8 /igitisation as part of /-1 though increases the infrastructure cost, will reduce the carriage cost 8 Investors $elieve that Content generation is under invested and digitisation will $oost the same+ 8 Overall Industry RatingI
Te"evision
P"ayer
1 2 3
Important Trends Aif anyC =anding Rights in China, "nd -ra$ic Channel 0 -lwan Consolidation of content & $roadcasting platform with a huge market share locally 1tagnant .rowth and poor Auality of content has undervalued this company
)ur 3atin(1
Print
P"ayer
1 2 3
Important Trends Aif anyC &ersatile Content for all set of readers and a reader $ase of ,+' 2illion 7ith 3igh penetration provides opportunity to reach highest reader $ase Regional print media targeting highest spending classes, hence attractive ad rates
)ur 3atin(1
Industry Insi(ht 8 Overall readership coming down with a industry growth of only ,+;(+ 8 Industry relying mostly on -d $ased revenue rather than circulation 8 Inherent advantages resulting in increased attention span 8 Overall Industry RatingI
1Rat#n&s are a -unct#on o- $ar/et s#0e, +#stor#ca! &ro(t+ rate and pro1ected &ro(t+ rate
Important Trends Aif anyC Financing Independent -pp and .ame developing teams to nurture creativity Create differentiating content and eCpect revenues from fair price ecosystem =eader in Console $ased gaming with ma6or focus on %ier # & " cities
)ur 3atin(1
8 8 8 8
Industry Insi(ht 2ore concentration in 2etros and tier # cities+ .radual movement towards mo$ile $ased gaming due to the advent of smart phones 0 nearly B* million =ow =ife cycles & repetitive nature of .ames and -pps Overall Industry RatingI Industry Insi(ht
/i"ms
P"ayer
1 2 3
Important Trends Aif anyC 1everal film line ups and professional management leading to a strong top line %ie:up with /isney 1tudios & cross distri$ution of IntDl & Bollywood movies %rend of =ow Budget, 3igh 1tory movies with huge marketing spend
)ur 3atin(1
8 /igital /istri$ution 0 /igitization of ,,( of 1creens & !* ( of films are distri$uted digitally 8 Regional film Industries are struggling due to video piracy, whereas Bollywood thrives due to economies of scale 8 Overall Industry RatingI
Industry Insi(ht 8 &ery few Organised >layers due to Important Trends Aif anyC )ur 3atin(1 P"ayer entry $arriers+ Innovation in understanding the mind set 8 Other @volving media provides >ercept 1 of customers is the key point platform for integrating OO3 with %imes ew Infra >ro6ects are opening avenues them+ /igital OO3 provides 2 Innovative for %ransit OO3 opportunity for /ata -nalytics to 6ustify /epends on %ourism & Retail industry for //B 2udra ROI to clients mainly in transit 3 sustaining OO3 2aC segment 8 Overall Industry RatingI 1Rat#n&s are a -unct#on o- $ar/et s#0e, +#stor#ca! &ro(t+ rate and pro1ected &ro(t+ rate
Te"evision, /i"ms and $nimations and Print form the top 3 investment %rac!ets %ased on a %enchmar!in( ana"ysis of mar!et forces and strate(ic fit
2i(h
Market Factor Score = f (Market Size (50%), Growth Rate (50%) Strategic Fit Score = f (Degree of Operating Le erage (!0%), Degree of financia" Le erage (!0%), Go ern#ent po"ic$ fa o%ra&i"it$ ('0%), Market Frag#entation ('0%)
Summary of Investment Thesis 8 Investment environment is favoura%"e, ho0ever cautious investment 0i"" %e !ey 8 Stron( (ro0th in the Media Sector despite recession in the past, trend is "i!e"y to %e continued in the future 8 Industry is "i!e"y to see a 0ave of conso"idation, particu"ar"y in TV and print media 0here "ar(e p"ayers 0i"" mar! re(iona" entry throu(h ac5uisitions 8 Po"itica" environment is hi(h"y supportive of investments in M : 7 sector, ta* re(u"ation "a0s have started easin( up, thou(h s"o0"y 8 +i(iti6ation is on the rise ridin( on stron( (overnment po"icies 8 This imp"ies a sur(e in Private 75uity capita" is e*pected, 0ith sma"" re(iona" p"ayers stron("y in the need of funds and corporate mana(ement 8 This opens up ne0er avenues for fund a""ocation, 0hich are %ound to %e a success in the near future 0ith a diversified portfo"io 8 $"" these factors indicate a stron( investor environment to0ards investin( in the sector 8 Top 3 sectors to 0atch out for /i"m, TV and Print
$ppendi*
Team The Pirates of Vastrapur arti!a Mitta" # P $sho! Varadhan # Shu%hra &hosh
$ppendi* 1
ey transactions in 2012 ; Source Mer(ermar!et, '"oom%er(, Venture Inte""i(ence
1 Mana(ement
3is! $ppetite Mana(ement Trac! 3ecord 4eadership $%i"ities Sta!eho"ders> confidence
2 Va"uation
7arnin( 7stimate Mar!et $ssessment +e(ree of +ifference /uture /orecast Tar(et Price : /"e*i%i"ity "imit
3is!s
F ,ata"ysts
Industry trends forecast 4i!e"ihood of favoura%i"ity 2o0 much time to D(et paid>
3eturn
)r(ani6ationa" 3is!s Technica" 3is!s /inancia" 3is!s Mar!et 3is!s 3esource 3is!s Severity Impact
3is! $ppetite
Invo"vement
7n(a(ement
#
Propensity to (o for ris!y pro.ect
"
Past Trac! 3ecord
;
4eadership a%i"ities
?
Sta!eho"der ,onfidence
$n idea" choice of a stoc! 0ou"d %e one that has moderate ris! appetite and commands hi(h de(ree of confidence from sta!eho"ders for hi(h performance
#
4i5uidity AHuic! 3atioC
"
4i5uidity A,urrent 3atioC
;
7arnin( per share
?
)peratin( Profit
Mu"tip"es estimate
i8 ii8 iii 8
4imit Variation
Rs+ B+"! K share Rs+ #,+?B K share Rs+ #+*; K share
$ppendi* 3 ; Va"uation
01, 2V ,et / o4it 'e4o e 2a5 ,et Ca!6 F om *.e ating A(tivitie! ,et Ca!6 %7!ed in&84 om 9nve!ting A(tivitie! ,et Ca!6 %7!ed in&84 om Finan(ing A(tivitie! ,et %de( ea!e&8in( ea!e 9n Ca!6 and Ca!6 :;7ivalent! *.ening Ca!6 & Ca!6 :;7ivalent! Clo!ing Ca!6 & Ca!6 :;7ivalent! <ee :nte tainment ,et / o4it 'e4o e 2a5 ,et Ca!6 F om *.e ating A(tivitie! ,et Ca!6 %7!ed in&84 om 9nve!ting A(tivitie! ,et Ca!6 %7!ed in&84 om Finan(ing A(tivitie! ,et %de( ea!e&8in( ea!e 9n Ca!6 and Ca!6 :;7ivalent! *.ening Ca!6 & Ca!6 :;7ivalent! Clo!ing Ca!6 & Ca!6 :;7ivalent! +a 313 1013.9 # 83".77 $ #39.#6 $ 382.22 13.3" ##.21 "7."6 +a 313 9"1.9 670.# $ 281.1 $ 226.1 163.2 +a 312 1026.32 867.6# $330.78 $"77.66 $#0.#7 8#.68 ##.21 +a 312 733.8 3"8.8 21.# $#"8 +a 311 11"".32 11#1.37 $"82.28 $"06.99 "1.7 32.98 8#.68 +a 311 8##.22 #6".8# $2"1.6 $297.97 +a 310 866.#2 778.9" $66".2 $11".9# $2.19 3#."2 32.33 +a 310 608.3# 16#.2# 3##.03 $286.66 +a 309 666.1 611.## $#0#.62 $188.08 18.7# 1".78 3#."2 +a 309 376.19 181.#7 109.#" $202.7 Relian(e :nt ,et / o4it 'e4o e 2a5 ,et Ca!6 F om *.e ating A(tivitie! ,et Ca!6 %7!ed in&84 om 9nve!ting A(tivitie! ,et Ca!6 %7!ed in&84 om Finan(ing A(tivitie! ,et %de( ea!e&8in( e a!e 9n Ca!6 and Ca!6 :;7ivalent! *.ening Ca!6 & Ca!6 :;7ivalent! Clo!ing Ca!6 & Ca!6 :;7ivalent! +a 313 $23."1 $113.86 +a 312 $19."3 $67.9# +a 311 $11." $26." 0e. 310 $29.# $26.92 +a 310 $76.13 $6.86
$10.0"
$#.98
$26.2"
$3.13
$0."
121.07
73.9
$200.09
278.#7
$2.39
$2.83
0.98
$2"2.8#
2#8.#2
$9.7"
6.#7 3.6#
#."1 ".#9
260."2 7.68
12.1 260."2
21.8" 12.1
$77.8
$83.73
221.61
88.22
- $ottom:up /CF valuation was carried out for each of the three firms and the valuation of the firms were compared %he total shareholdersD $ase was picked up from annual reports and using this the stock price was determined for each firm
76.2 239. #
1"3.9 76.10
237.66 1"3.93
110.#3 332.0"
22.21 110.#3
Hih
11 )r(ani6ationa" 3is!s
>riority change in $usiness development =ack of proper channel communication in sales space
21 Technica" 3is!s
>roduct development compleCity Risks of -daptation of the new environment Insufficiency of %echnical eCcellence
31 /inancia" 3is!s
3igh >roduction Costs 4Films, >rograms etc+5 3igh 2arketing, 1ales K /istri$ution Cost %aC and other Regulatory concerns
F1 Mar!et 3is!s
G1 3esource 3is!s
Po"itica"
7conomic
4e(a"
#
201F 7"ections
"
Po"icy favoura%i"ity
;
&"o%a" Mar!et Scenario
?
3e(u"atory 7ase
$ (ood stoc! shou"d have positive mar!et e*pectations post the 201F e"ections mar!ed %y stron( positive mar!et movement and ease of re(u"atory po"icies
Profita%i"ity 3atios
Investment Va"uation
#
3eturn on Bet <orth
"
3eturn on $ssets
;
+ividend per share
?
/ree reserve per share
I= I=
Sun TV outshines a"" others in a"" the parameters and hence appears as the most favoura%"e stoc!1 In most other aspects, @ee TV performs %etter than 3e"iance /IB$4 37,)MM7B+$TI)B I SJB TV A'JEC # @77 TV A'JEC # 374I$B,7 7BT1 A2)4+C