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This
would be the interview of the week with either the chairman
of the company or the CFO or Company Secretary of the
company. The interview will talk about the company’s
performance on all aspects and its future plans.
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One
of the top stars of yesteryears, Jeetendra Kapoor is an
extremely down-to-earth and warm person. It was his vision
to foray into the media and entertainment sector at a
time when the ICE sector was at its peak. He floated the
company ‘Balaji Telefilms’ a television software
company. His standing in the entertainment industry delivers
value to Balaji Telefilms through the relationships that
he enjoys with various television channels, artists, directors
and writers. After having established the company, he
then successfully took the company public and today Balaji
Telefilms has reached its peak. Exchange4Stocks.com caught
up with Kapoor to talk about the company and its future
plans. |
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- Here are excerpts
from an interview
 1.
Could you give us a brief overview of the television industry
and current happenings in the sector? How do you see the
industry progressing?
There has been lot of developments taking place within
the television industry. On a macro level, with Indian
economy growing at a healthy rate, its impact on advertising
revenues is imminent. Also, the share of electronic media
in overall advertising pie has been consistently increasing
and it will continue to do so due to the cost effectiveness
and reach of electronic media. The ever-increasing C &
S penetration in overall TV households will also increase
the subscription revenues for the industry. All in all
TV remains a good industry to be in, in the years ahead.
2. What is the current prime time on Indian
television?
Historically, the prime time on Indian television used
to be between 8.00 pm to 9.30 pm. Balaji was pioneer in
extending the prime time. Even our show at 11.30 pm manages
to feature in top 40 shows of the country which effectively
means that prime time has extended till 12.
3
How has been the performance of your serials in the last
nine months? At present how many shows do you have on
air?
The performance of our serials has been excellent. All
the top 10 shows of the country are coming from Balaji’s
stable. I am also quite happy about the performance of
our recently launched serials namely, Kahi to Hoga on
Star Plus, Kayamat on DD and Koi Dil Mein Hain on Sony
TV. These serials have done extremely well. At present,
we have 14 serials on air translating into 29.5 hours
of programming per week.
4. Is there
a change in the mix of advertisers?
Thanks to the emergence of new sectors like telecommunication,
insurance, banking among many others, advertising revenues
are showing a positive growth. Also, the dependence on
FMCG sector has reduced to a great extent.
5.
What are your plans with regard to tapping new segments
and genres?
Currently, Balaji is focusing on developing weekend programming
after the success of “Kya Haadsa Kya Haqueqat”
on Sony TV. We have recently launched “Kayamat”
on DD, which is a thriller and “Koi Dil Mein Hain”
on Sony TV, which is a youth based program. Apart from
our main focus area of Hindi programming, we are also
now concentrating on the dominant regional markets. We
have strong presence in Andhra Pradesh and Karnataka markets.
We are looking at the possibilities of entering markets
like West Bengal and Tamil Nadu markets.
6.
Balaji Telefilms was supposed to export its serials to
the overseas markets? Which are the markets that the company
is eyeing for exports? Could you kindly comment on the
progress made on this front?
We are currently targetting at South East Asia, Middle
East, UK, and USA markets. In fact, the company is already
exporting to Middle East, Indonesia and USA. I am quite
happy about the popularity of our programming in these
markets.
7. Going forward do you see
a possibility of making crossover serials just as we have
crossover films?
Yes. We are already considering various options but at
this point of time it is too early to make a comment.
8. Do you foresee any potential competition
from other media companies?
We have a diversified business model and we are present
across channels, regions and languages. The competition
exists with the popular programmes being aired at the
same time slot on competing channels, which could be produced
by even an individual producer.
10.
Promoters have sold some shares in Balaji telefilms and
the promoters stake has come down to 52.57 per cent. Is
there a particular reason for bringing down the promoters
stake?
There has been lot of FII interest in our shares.
Hence, in order to further broadbase the institutional
shareholding in the company, we have divested small percentage
of our holding.
11. Post CAS how do
you assess the market for content providers?
Currently, the subscription revenues of broadcasters are
quite low. This will change post CAS and the share of
subscription revenue as a percentage of total revenues
will increase. Also, advertising revenues have seen a
rise thus contributing to the increase in total revenues.
To ensure higher subscriptions, each channel will have
to ensure that it has programs that compel the viewers
to subscribe to the channel. In such a scenario, quality
content providers like Balaji Telefilms will have better
bargaining power.
12. As compared to
Q2FY03 the result of Q2FY04 was not satisfactory. Can
you brief us on the Q2FY04 result?
There are few specific reasons for the comparative performance
of Q2FY04 to be unsatisfactory. Over the last year as
part of our strategy we consciously abstained from airing
program on Doordarshan. However, there are some policy
changes in Doordarshan which goes in favor of the content
providers. Apart from that we have also withdrawn some
of our low margin programs from various channels. Also,
some of our high value programs on Zee and Sony went off
air. These will be replaced in the coming half-year but
their impact is reflected in year on year comparison.
13. You have been very successful in progressively
curtailing your cost. Your margins are at an all time
high. Please comment.
Increase in realisations per hour coupled with tighter
control on cost, through setting up our own studios and
implementing various cost control initiatives, has resulted
in significant improvement in our margins.
14.
What is your outlook of the company for the second half
of FY04?
The second half looks good and we are expecting to perform
better in this period considering the increase in realisation
from satellite channels and the launch of new programs.
Our cost initiatives have already started paying off.
Overall the second half looks good for the company.
15. What are the growth drivers for the company?
Increase in sponsored programming, fresh programming on
weekday and weekend across Hindi satellite channels and
exploitation of overseas markets are the key growth drivers
for the company.
16. How much cash reserves
do you have? What do you plan to do with it?
We have cash and cash equivalents of around Rs 65cr by
market value. The surplus money has been invested in the
debt mutual funds. We will require the funds for regional
expansion, international expansion and capital expenditure
for existing serials and new launches. Apart from that
we are also looking at possibilities of increasing the
dividend pay out.
17. Can you comment
on the market valuation of Balaji Telefilms?
I cannot comment on the company’s stock price as
such.
18. What is your message to shareholders?
Our mission is to enhance shareholder value over the long-term
through a superior return in our business. In the past
our shareholders have been benefited both in terms of
dividends and in terms of capital appreciation. |
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