Entertainment Sectors
Important Note - Still Indian Markets are directionless and indecisive due to which any further market correction may bring some more pressure on all researched stocks mentioned in following sub-sections.
The market volatility situation is for short term duration and in long term the markets will recover as Indian companies are having good fundamentals and good growth prospects.
UTV Software Communications Ltd
Returns
CMP - Rs. 211
Buying Price - Below Rs. 200 (It went down till Rs.183)
Returns above 50%
Duration - 2 to 3 years.
Taking into consideration Rs.183 as buying price following are the returns
108% Target acheived in month of 20 May 2009 (Updated - May 2009)
About company
1. UTV Software Communications a pioneer in television content production has
attempted the latter strategy to grow into an integrated media company with
presence across segments like television and film content production, gaming
and animation, and broadcasting.
2. In its broadcasting venture, UTV plans to launch around five new channels
across genres, including a business news channel. It has also launched its
World Movies and UTV Movies channels showcasing international (expect
Hollywood films) and Hindi movies respectively.
3. UTV’s board approved the allotment of shares to The Walt Disney Company, so far a 14.85 per cent stake holder in UTV,
allowing it to raise its stake in the company to 32.1 per cent at an investment of Rs.805 crore.
4. Disney will also buy a 15 per cent stake in UTV’s broadcasting arm, UTV global Broadcasting for Rs.118.98 crore, thus
valuing UTV’s broadcasting business at Rs.793 crore.
5. The promoter group will bring in an investment of Rs.390 crore, through a preferential issue, helping it maintain its stake in
UTV software at Rs.32.1 per cent. This will take the total amount infused into the company to Rs.1,314 crore, and UTV’s
equity capital base will increase from Rs.22.9 crore to Rs.39.7 crore.
Growth of the company
1. In the broadcasting business so far, UTV’s youth channels Bindass and Bindass Movies too, are doing well, boasting a
viewer ship of 49 million in all Hindi speaking markets and popularity rating almost at par with other channels like MTV and
Zoom.
2. UTV’s movies business, which contributes over 60% of its revenues, released its mega budget Jodha Akbar, it has released
11 movies during March to September 2008. It is also scouting for opportunities to make regional movies, on the lines of its
prior releases like Atidhi in Telugu and Kennnamoochi Yennada in Tamil.
3. The gaming business too, is maturing, with the acquisition of Indiagames and Ignition. Development of console games for
Sony PlayStation 3 and Microsoft Xbox 360 like Angelic, Reich and Wardevil is underway. UTV will hold intellectual property
to these games and market them worldwide, the benefits of which would be reflected in its financials FY10 onward.
4. UTV ha also launched a games on demand portal indiagames.com, which has about more than 10,000 paid subscribers so
far. As a logic extension, it has also ventured into mobile gaming by signing partnership with Glu mobile and Nokia.
5. UTV aims to focus on improving profitability of the business by outsourcing line production of content through joint ventures.
Apart from these four verticals (including broadcasting), UTV has launched its music and video publishing label UTV Music,
which will cater to the home video markets and exploit the rights to its content.
Latest Updates
(16 Dec 2008)
Moser Baer signs exclusive home video licensing deal with UTV Motion Pictures
Moser Baer Entertainment (MBEL), the wholly owned subsidiary of Moser Baer, has entered into a strategic alliance with
UTV Motion Pictures for the exclusive home video distribution of UTV movies.
This gives MBEL domestic rights to UTV`s home video catalogue which comprises of 10 films. Moser Baer Entertainment will
also get home video rights to all UTV productions released until mid 2009.
The agreement gives Moser Baer Entertainment access to premium content from UTV. The company plans to release 15 new
films over the next six months. Six of them are being released in December and January.
(09 Dec 2008)
UTV Software - UTV through its Motion Pictures Distribution Division to be Exclusive Distribution Partner for Disney Theatrical Release in India
WALT Disney and UTV Motion Pictures had a deal, whereby beginning January 1, 2009, UTV will be handling the sales and distribution of all the Walt Disney Studios Motion Pictures’ Hollywood releases in India. This was earlier being done by Sony Pictures International, which was Disney’s agent in India. Disney, however, will continue to handle its own marketing.
UTV will be paid a commission of 10-15% of the box-office collections in India for all Disney films. Mahesh Samat, senior vice-president and managing director, Walt Disney said: “UTV’s leadership in India’s rapidly growing film production and distribution space will strengthen our initiatives to build a family entertainment brand in the country by increasing the reach of our Hollywood films here.”
For Disney, the deal would translate into leveraging UTV’s distribution clout as well as better relationships with distributors and exhibitors resulting in better revenue share deals. For UTV, it would mean a larger slate of movies with a mix of both Hollywood as well as Bollywood cinema, hence bettering their negotiating power.
“The combined offering of UTV and Disney content will offer Indian exhibitors and viewers a tremendously diverse range of movies across languages and genres,” said Siddharth Roy Kapur, CEO, UTV Motion Pictures. For Sony Pictures, the exclusive Disney distributors for several years in India, the loss would translate into lesser number of films being released in India.
(Updated date - Dec 2008)
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