Interesting result indeed:
Quarterly revenue – 1219 cr
Out of which,
a) Ipl revenue – 243 cr (90% from Telecast rights revenue pool sharing – 10% – Others – Sponsorship, Ticket sales, etc.,)
b) Advertisement revenue – 343 cr ( For selling ad space in their tv shows, FM, Printed media) (90% – Advertisement slot selling, 10% – Broadcasting revenue)
c) Remaining revenue – 633 cr includes
- Subscription revenue (Include Cable subscription – 50% And DTH Revenue – 50%) (Could be 400 cr – last qtr is 408 cr)
- Movie revenue ( Beast was a high budget movie in Q1 – Whose revenue could be 200 cr as a guess based on my scuttlebutts ),
- Other digital revenue ( YouTube, Streaming platforms, etc., Which if we consider same as Tips could be 33 cr)
They still operate at a healthy operating margin at 63% ( Average being 65%: maybe because of subdued profit from Beast movie)
Trend in Revenue:
a) Next year the IPL revenue would be 550 cr and the out of additional 300 cr ; 250 cr would be directly contributing to the bottomline. (15% increase in Annual Eps and cashflow without any additional investment)
b) Advertisement revenue is Flattish and I expect it to be flattish for next 2 years. 1300 odd cr (55% FMCG, eCommerce – 10%, others – Pharma, retail, auto – 35%). Keything to note here is whether FMCG Ad spending decreases because of Digital advertising. So far, precovid levels are being maintained.
c) Other revenue – Subscription revenue was projected to grow at 10% due to conversion of analog to digital media and its group company Sundirect has almost 20% market share in DTH Business.
Company intends to give 50% dividend yield based on previous communications. Announced 5 INR q1 dividend which will translate to intended Annual dividend of 20 INR.
Key risk :
1)Decline in Market share in key markets from 55% to 40%
2)Continuous ignorance to make New age content to gain traction for SunNXT App which already has a healthy penetration rate (2.5 cr subscribers)
3)Quality of management at Sunrisers Hyderabad, Content produced (Movies and Programmes) are continuously disappointing while they are still hugely profitable.
Disclaimer: Invested as a turnaround bet. No transactions in last 12 months.
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