Rajat Sharma’s India TV posts 38% growth in net profit in FY18

Rajat Sharma-promoted Independent News Service, which owns and operates Hindi news channel India TV, has seen double-digit growth in top line and bottom line in FY18.

The company’s net profit has jumped to 38% to Rs 54.9 crore compared to Rs 39.76 crore in the previous fiscal. The profit before interest lease depreciation and tax (PBILDT) has increased 34% to Rs 94.07 crore as against Rs 70.39 crore.

The revenue jumped 14% to Rs 302.62 crore from Rs 265.9 crore a year ago due to strong growth in ad revenue.

Better advertising revenue coupled with lower fixed cost-heads, like carriage cost, improved the PBIDLT and PAT margin to 31.08% and 18.14% respectively during FY18.

Independent News Service has continued to register healthy growth in advertisement and penetration in tier II and tier III markets. Further, established market position of India TV has enabled the company to command healthy ad rate hikes and resulted in sustained growth in ad revenues and healthy operating margins in line with improving cost efficiencies.

Average advertisement rates have improved by 8% to Rs. 3001 per 10 seconds in FY18 as compared to Rs. 2775 per 10 seconds in FY17.

The company has undertaken consistent measures to upgrade and modernise its facilities to create better content and improve the viewership experience, along with broadcasting various shows like ‘Aap Ki Adalat’ to enhance the brand image of the channel.

Additionally, the company has been paying local cable operators (LCOs) for better frequency and multi system operators (MSOs) for better bandwidth, and higher placement in the EPG list to enhance its viewer base further.

The company has also installed additional seeding boxes as various locations in the country, to enable better frequency ranging and stronger signal bandwidth during FY16. Hence, the company has been able to bring down its production costs in last two years.

The liquidity position of the company continues to stay strong with free cash & bank balance amounting to Rs. 130.35 crore as on 31 March 2018 compared to Rs. 76.26 crore in the previous year. Further, the company has unutilised CC limit of Rs. 15.04 crore.

The average working capital utilisation also remained around 1%-2% for 12 months ended Dec-18 and no debt repayment obligations on account of no long term debt.

Care Ratings had recently reaffirmed the rating of the bank facilities of Independent News Services due to growing revenue, healthy profitability and cash accruals in FY18 and H1FY19 coupled with strong liquidity.

Independent News Service, promoted by Rajat Sharma and his wife Ritu Dhawan, was incorporated in June 1997 for the purpose of carrying on the business of TV news, direct telecast of news clippings and short films, develop and establish News and feature agency utilising satellites or other media.

Initially, the company was engaged in the production of television programs (such as ‘Aap Ki Adalat’ on Zee TV and ‘Janata Ki Adalat’ on Star TV) for various television channels.

The company started its business with the program ‘30 minutes with Rajat Sharma’, which was termed as a comprehensive election program. Thereafter it went on to produce several programs that achieved the best television viewership rating in the news & current affairs genre including most successful programme- Aap Ki Adalat & Aaj Ki Baat.

The company started its own 24-hour Hindi News & Current Affairs Channel – India TV in May 2004. This channel is a free-to-air channel with revenues being generated from advertisements only. In a short span of time, India TV has established itself among the top 2 national Hindi News channels and competing with Aaj Tak.