Balaji Telefilms expects ALTBalaji revenue to double in FY20

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MUMBAI: Balaji Telefilms is planning to double the revenue from its subscription video on demand (SVoD) platform ALTBalaji in FY20. The company expects ALTBalaji to break-even in FY21.

In FY2019 the platform has witnessed 6x growth in its revenue at Rs 41.6 crore up from Rs 6.8 crore in FY2018. The company had sold 20.1 million subscriptions in FY19 registering an 18x growth over the previous year.

In the opening remarks of the earnings call, Balaji Telefilms Group CEO Sunil Lulla said that the SVoD platform is hoping to double its revenue in FY20 as Indian consumers are now willing to pay for premium content.

Lulla further stated that while the revenue is expected to double even as the cost base will remain similar to last year.

In April, ALTBalaji completed two years of operations. Lulla said that the platform has established itself as the front runner in the digital video streaming category.

“We are one of the largest multiple episode multi-season exclusive Hindi language with 38 shows much more than any other OTT streaming services in the country,” he noted.

Balaji Telefilms Group CFO Sanjay Dwivedi said that nearly 40% of the platform’s revenue came from direct customers and this ratio has been showing healthy progress.

He further stated that ALTBalaji remains in an investment mode. The company has invested Rs. 81 crore in FY19 creating original exclusive content and Rs. 25 crore in marketing. He further stated that Balaji Telefilms has invested Rs. 450 crore in ALTBalaji since its launch.

Talking about the movie business, Lulla informed that the company is planning to release five movies in FY20. In FY19, it had released two movies ‘Veere Di Wedding’ and ‘Laila Majnu’.

The FY20 slate includes Kangana and Rajkummar Rao’s ‘Mental Hai Kya’ followed by ‘Jabariya Jodi’ with Siddharth Malhotra and Parineeti Chopra. In H2 FY20, the releases will include ‘Dolly Kitty Aur Who Chamakte Sitare’, ‘Dream Girl’ starring Ayushmann Khurrana and another movie whose details have not been disclosed.

In line with its operating strategy on films, the company has pre-sold certain rights of these films which has helped it in recovering the cost of production of these movies before they hit the screen.

“Our capital commitment to the movie business remains limited. We follow a portfolio approach where capital is recycled within the business. We should turn a reasonable profit before tax of Rs. 20 to Rs.25 crore plus in the movie business in FY20 given that we have recovered the cost of production on these films,” Lulla said.

Dwivedi said that the company hopes to deliver an EBITDA of Rs. 20 to Rs.25 crore from the movie business in FY20.

With regards to the TV business, Lulla informed that the company ended the year with 14% market share primetime which was more than twice our nearest competing production houses and more than production houses ranked #2 and #3 combined.

Lulla said that the average realisation from the TV business has improved 15% for the year. The company had produced 763 hours of content in FY19. He also averred that there is no slowdown in demand for content from broadcasters contrary to speculations that content spends are being curtailed.

“Our order book indicates for the upcoming year we will continue to grow. We have two shows launching shortly ‘Kavach Mahashivratri’, a supernatural horror drama and follow up season with ‘Kavach’ one, which will replace ‘Naagin 3’ on the weekends. We will also launch our new show ‘Bepanah Pyar’, a romantic daily drama on Colors soon,” he informed.

He also stated that the TV content business is in a very good position with a very strong order book for the year resulting in revenues of about Rs 350 crore. He added that the company’s operating margins are back to the normal level which would result in a much-improved financial performance for year FY2020.

“We expect our profit before tax in the range of Rs. 50 to Rs. 55 crore,” he noted.


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