Telugu news channel ABN Andhra Jyothy’s FY17 net profit jumps to Rs 14.7 cr
MUMBAI: Aamoda Broadcasting, which runs free to air (FTA) Telugu news channel ABN Andhra Jyothy has seen its net profit increase over three to Rs 14.7 crore for the fiscal ended March 2017 compared to Rs 4.3 crore in the year-ago period.
Revenue saw an upswing at Rs 32.6 crore compared to Rs 19.6 crore in the previous fiscal. PAT margin improved to 45% from 22%.
CRISIL has upgraded the company’s rating on the long-term bank facilities of ABCPL to ‘CRISIL B+/Stable’ from ‘CRISIL B/Stable’.
For arriving at its rating, CRISIL has factored in the strong support that the company receives from its parent, Aamoda Publications Pvt Ltd (APPL).
For arriving at the ratings of APPL, CRISIL has combined the business and financial risk profiles of APPL and ABCPL. This because the two entities, together referred to as the Aamoda group, have significant financial fungibility and have the same management team.
There are numerous Telugu news channels operating in Andhra Pradesh, resulting in intense market competition. The Telugu vernacular newspaper market is marked by intense competition among the five Telugu dailies including Andhra Jyothy. Being predominantly a vernacular Telugu newspaper, it is restricted by the lower share of ad revenue for the total Telugu newspaper market vis-a-vis English and Hindi dailies and is geographically restricted to Andhra Pradesh.
The Aamoda group has been in the business of publishing vernacular newspapers since 2000 through APPL, though it ventured into television broadcasting through the launch of ABN Andhra Jyothy only in October 2009. APPL is led by Mr. V Radha Krishna, a well-known journalist in Andhra Pradesh, who has experience of more than three decades in the business.
Crisil believes the Aamoda group will continue to benefit over the medium term from the extensive experience of its promoters and established brand image of its newspaper.
The outlook may be revised to ‘Positive’ if significant improvement in revenue and profitability, or sizeable equity infusion strengthens the financial risk profile, particularly capital structure. Conversely, the outlook may be revised to ‘Negative’ if the working capital cycle lengthens, or operating margin or scale of operations declines, leading to deterioration in the financial risk profile.
Set up in 2008 by V Radhakrishna and his wife K Kanaka Durga, ABCPL operates a 24-hour free-to-air satellite Telugu news channel, ABN Andhra Jyothy. The channel commenced commercial operation on October 15, 2009, and its target market is Andhra Pradesh. It is an 87% subsidiary of APPL.