Telugu film producer Suresh Productions’ FY18 rev jumps 35% to Rs 347 cr

MUMBAI: Telugu film studio Suresh Productions’ revenue for FY18 has zoomed 35% to Rs 347 crore compared to Rs 257 crore in the previous fiscal. Net profit has remained flat at Rs 4.87 crore which was the same in FY17.

Founded by Dr. D. Ramanaidu, Suresh Productions is backed by Telugu film industry’s illustrious family, the Daggubatis. The key people in the company are Daggubati Suresh Babu, and film stars Daggubati Venkatesh and Rana Daggubati.

Suresh Productions has produced 135 films in 15 different languages and has made a place for itself in the Guinness Book of World Records for producing the most number of feature films by a single producer, Dr. D. Ramanaidu.

Rana Daggubati’s ‘Nene Raju Nene Mantri’ was the latest film released by the studio. The film producer is now bankrolling a Conceptual-based film called ‘Adhugo ‘which is directed by Ravi Babu.

Rating agency Crisil has reaffirmed its ratings on the long-term bank facilities of Suresh Productions at ‘CRISIL BBB-/Stable’. The agency said that the ratings continue to reflect the group’s established position in the movie production, distribution, and exhibition businesses, mainly in South India and its above-average financial risk profile marked by healthy net worth, moderate gearing, and above-average debt protection measures.

These strengths are partially offset by the group’s high degree of geographic concentration in revenue profile and to risks inherent in the film industry and limited financial flexibility on account of loans and advances extended to its affiliates.

For arriving at the rating, Crisil has combined the business and financial risk profiles of SPPL and Suresh Productions Entertainment LLP (SPEL; part of the Suresh group). This is because these entities, collectively referred to as Suresh group, are in related lines of business and have common promoters.

The promoters have been in the movie production business for over four decades. It further stated that the financial risk profile is above average marked by healthy net worth, moderate gearing, and above-average debt protection measures.

However, Crisil also noted that the operations are mainly confined to Telangana and Andhra Pradesh limiting its revenue. Consequently, any dispute between the exhibitors and distributors, or strike in the film industry, or agitations by political parties will have a negative impact on revenue.

In a note, the agency said that the business of production and distribution of films requires huge working capital; with increase in scale of operations in movie production by the group, working capital to fund the operations like advance payments to movie producers for acquiring distribution or movie rights, and credit to movie producers for using the studio infrastructure have increased.

Suresh Productions was set up in 1983 undertakes film production, and owns three film studios two in Hyderabad and one in Visakhapatnam (Andhra Pradesh). SPEL was originally set up in 1999 as Suresh Overseas Commodities & Services Trading Ltd and got its current name in 2015. SPEL is engaged in the film distribution and exhibition business.