TV9-owner ABCPL’s rev jumps 19% in 9M FY18 as ad growth rebounds

MUMBAI: Associated Broadcasting Company Pvt Ltd (ABCPL), the company which runs a clutch of news channels under the TV9 brand, has seen an improvement in its revenue in the first nine months of the financial year 2018.

ABCPL’s revenue grew 19% to Rs 159.96 crore in FY18 till 31 December compared to Rs 134.73 crore in 9M FY17. In line with increased revenue and lower interest expenses, profit before interest, lease, depreciation, and tax (PBILDT) margin and PAT margin improved significantly to 13.82% and 6.77% respectively during 9M FY18 as against 8.8% and 5.26% in the year-ago period.

Due to the performance in the first nine months, ABCPL’s credit ratings have been revised by rating agency Care to BBB from BBB-.

The rating continues to derive strength from strong experience and financial strength of promoters, leading position of its flagship channel TV9 AP in and moderate working capital cycle.

The rating, however, is tempered by a relatively moderate scale of operations with its presence in five states, high geographical concentration of revenue, moderate capital structure as on 31 March 2017 albeit improved, presence in the highly fragmented and competitive television and broadcasting industry.

ABCPL had posted a net profit of Rs 1.13 crore compared to a net loss of Rs 24.77 crore. Total operating income dropped Rs 177.9 crore compared to Rs 189.2 crore due to decline in ad revenue on account of demonetisation. PBDILT had dropped to Rs 8.63 crore compared to Rs 25.1 crore.

ABCPL is managed by a three-member board of directors comprising of V Ravi Prakash (Director), Clifford Pereira (Whole-time Director) and M K V N Murthy (Director). The promoters possess vast experience and have continued to support the company by means of inter-corporate loans.

TV9 AP continues to be the leading Telugu News channel in its respective genre and region. However, revenue from TV9 AP declined 6.29% during FY17 on account of demonetisation.

ABCPL is relatively a medium-scale player in the television and broadcasting industry as compared to other large players in the industry with six channels TV9 AP, Jai Telangana, TV9 Kannada, TV9 Gujarati, TV9 Marathi, and News9 across 5 states.

The company faces high geographical concentration risk as the majority of revenue continues to be derived from three channels namely TV9 AP, TV9 Kannada and TV9 Gujarati.

The share of subscription income has remained low due to slack regulation and non-disclosure of the actual number of subscribers resulting in leakage of income.

ABCPL was promoted by Ravi Prakash with seed capital from Srinivasa Raju through his investment firm iLabs Venture Capital Fund and Chintalapati Holdings in 2003. As on 31 March 2016, iLabs and Chintalapati Holdings continue to hold 17.63% and 71.06%, respectively, in ABCPL.