Tag - OTT

10 Feb

Optimistic on Sun NXT – Sun TV

Update on the Indian Equity Market:

On Wednesday, Nifty closed in the red at 15,107. Among the sectoral indices, Realty (+1.6%), Pharma (+0.7%), and IT (+0.4%) closed higher. PVT Bank (-0.7%), Fin Services (-0.2%) and FMCG (-0.1%) closed in the red. Cipla (+2.8%), Bajaj Finserv (+2.8%), and SBI Life (+2.7%) closed on a positive note. Eicher Motors (-2.2%), Bharti Airtel (-1.6%), and HDFC Bank (-1.2%) were among the top losers.

Excerpts from an interview of Mr. SL Narayan, CFO, Sun Group with CNBC-TV18 dated 09th February 2021:

  • The company expects double-digit growth across financials.
  • Narayan said things are looking good since January-21.
  • The advertising revenues are still lagging but the company is in a better position as compared to Q1FY21.
  • The company was impacted more as compared to large peers because of its dependence on local revenues.
  • He said the entire ecosystem is affected and hence there is some impact on the company as well.
  • On Sun NXT, he said the company had a large contract that came up for renewal. However, the negotiations couldn’t be concluded on time and its revenues were not recognized in Q3FY21.
  • Speaking about subscribers for Sun NXT, he said the company is not spending on customer acquisition because they don’t want to build an OTT at a significant upfront investment.
  • Movie releases will bring back the growth in subscription revenues.
  • A lot of new movies will be hitting the screen in coming times.

 

Consensus Estimate: (Source: market screener website)

  • The closing price of Sun TV was ₹ 528 as of 10-February-2021.  It traded at 15x/13x/12x the consensus Earnings per share estimate of ₹ 35.8/39.3/42.3 for FY21E/FY22E/ FY23E respectively.
  • The consensus average target price is ₹ 566/- which implies a PE multiple of 13x on FY23E EPS of 42.3/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

 

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11 Mar

Covid-19 advisories may impact footfall, but could be 30-60 day phenomenon: Ajay Bijli, PVR

Update on the Indian Equity Market:

On Monday, Indian shares followed a slide in global peers as fears over the spread of the Covid-19 outbreak intensified and oil prices plunged. The Nifty hit its lowest since February 2019 and the sell-off triggered by the economic fallout of the virus outbreak worsened by the turmoil at Yes Bank.

Among the Nifty 50 stocks, Yes Bank (+32.2%), BPCL (+5.5%), Infratel (+2.9%) and Eicher Motors (0.7%) were the only stocks which ended the day in the green. ONGC (-16.0%), Vedanta (-15.3%), and Reliance (-13.1%) were the top losers of the day. All the sectoral indices too ended in the red. Metal (-7.7%), Media (-6.7%), and PSU Bank (-6.1%) were the top losers.

Covid-19 advisories may impact footfall but could be 30-60 day phenomenon: Ajay Bijli, PVR

Excerpts from an interview with Mr. Ajay Bijli, Chairman and Managing Director, PVR Cinemas published in Mint dated 06th March 2020:

  • The release of the latest Bond film has been postponed. Talking about the US movie collections, he said that China, Japan, and South Korea are the big markets. India is a significant market, but not as big as these markets. So, he believes that the Indian film industry will not get impacted. Baaghi 3, which is a big franchise released on Friday. The advances are good so no delay in release was announced.
  • The Covid-19 advisory can impact footfall but it is an aberration because nobody has experienced anything like it. The safety, health, and security of the patrons are more important than the business. It is difficult to pinpoint if there has been an impact on the footfall because the content was not good in the past two weeks or is it the Covid-19. Mr. Bijli believes that this is a tide that will go away and the fundamentals of the business are very strong.
  • When asked about the pre-emptive action to combat the virus, he said that they have put sanitizers and disinfectants everywhere. PVR employees are wearing marks everywhere. They are ensuring the box office, and the seats are disinfected and cleaned thoroughly.
  • In terms of consumer spending outside the virus impact, PVR’s business has not been impacted. Before the virus issue, movies were releasing and people were coming out and watching movies, eating more.
  • Even the Q3 results were comparable to last year’s Q3. During recessionary times, people eliminate a lot of things from their discretionary spending. Since watching a movie is a small ticket item, and the content has been good, people are going out to watch a movie. Smaller films or sleeper hits as they are called, have done very well. He believes, it is a lifestyle need gap to go out and entertain oneself in India.
  • Studies show a positive correlation between OTT and cinema-going. He calls what is happening on Netflix and Amazon- long-form storytelling which is like Narcos -13 episodes, The Crown-26 episodes. The same people who consume long-form storytelling are going out and watching movies. People are consuming a lot of content but short-form storytelling is more experiential.

Consensus Estimate: (Source: market screener website)

  • The closing price of PVR Ltd was ₹ 1574/- as of 09-March-2020. It traded at 43x/ 31x/ 23x the consensus earnings estimate of ₹ 36.9/ 51.4/ 68.1 for FY20E/FY21E/FY22E respectively.
  • The consensus target price is ₹ 2060 /- which implies a PE multiple of 30x on FY22E EPS of ₹ 68.1/-.
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02 Dec

ZEEL: ZEE5 targets to reach ~15mn daily active users in 6 months

Update on the Indian Equity Market: 

On Friday, NIFTY closed in the red at ~12,056 points (-0.8%) reversing the previous day gains. In the sector-wise performances, REALTY (+1.0%) was the best performing sector while Media (-2.5%) and Metal (-1.2%) was the worst-performing sector. Amongst the NIFTY 50 Stocks, INFRATEL (+6.7%), ADANI PORTS (+2.3%) were the top gainers while ZEEL (-7.9%) HINDUNILVR (-2.6%) were the worst performers.

ZEEL: ZEE5 targets to reach ~15mn daily active users in 6 months

Key takeaways from the interview of Mr Tarun Katial, CEO of Zee5, the online video streaming Over The Top (OTT) platform of Zee Entertainment Enterprises Ltd (ZEEL); dated 28th November 2019 on CNBC-TV18:

  • ZEE5 reached out to ~8.9 million daily active users, and over 80 million monthly actives and huge watch time. It targets to reach out to ~15 million daily active users in about ~6 months.
  • ZEE5 is offering 12 Indian languages today and five foreign languages. The company is looking to expand in Assamese, Malayalam, Kannada in the next six months.
  • It has a 3V strategy – Vernacular, Video and Voice. The User Interface (UI) and User Experience (UX) supports 12 languages. When the user opens the app, the first thing it asks is the language preference which reaches out to those many languages, both in display and content. ZEE5 gets the content through the web of Zee language channels. But building the UI in those many languages and navigating consumers in so many languages was critical. Indian keypads don’t support so many languages. A voice search is an important tool to let consumers discover the content quickly and easily.
  • ZEE5 also built a robust Advertising Video-on-Demand (AVoD) and Subscription Video-on-Demand (SVoD) strategy. The company made some very big investments on the AVoD side in building the ad suite. Ad tech (advertising technology) is run by big tech companies in India – Google Facebook and Twitter – and to compete in the ad space, ZEE5 needs to build its own ad suite.
  • ZEE5 is also building the self-serve bidding model where advertisers can book their own advertising slots, bid for advertising slots, the pricing is on a bidding model and optimises the advertisement themselves on an optimisation engine.
  • To reach out to more and more audience; ZEE5 needs to get hyper-personalised. It launched a new recommendation engine which between auto-curation and hyper-personalisation enabling it to offer a differentiated yet personalised service.
  • ZEE5 is investing in automation. It piloted with the tool from Microsoft Azure for self-editing.
  • Most of the app is fully curated through artificial intelligence and machine learning. ZEEL doesn’t do any manual curation anymore. ZEE5 is also evaluating a mobile-only plan, much like Netflix.
  • There is a significant growth month-on-month, both on the AVoD and SVoD side. ZEE5 is expected to break even within 5 years. 
  • According to Mr Katial, outside of (Amazon) Prime, Zee5 possibly has the largest subscription base in the country. ZEE5 is also looking to tie up with talks with other OTT platforms as well as good production houses.
  • ZEE5 is looking to capitalise on the content created by ZEEL over 27 years.
  • Brands are extremely important today in the day and age of social transparency. Mr Katial mentioned that ZEE5 has enough checks and balances to be able to deal with consumer complaints. It has a panel of people who look at all the complaints, a customer service team who gives feedback, who holds up the content team and make changes themselves.

Consensus Estimate (Source: market screener and investing.com website)

  • The closing price of ZEE was ₹ 286/- as of 29-November-19. It traded at 15x/13x/12x the consensus EPS estimate for FY20E/ FY21E/ FY22E of ₹ 19.7 / 22.3 / 24.3 respectively.
  • Consensus target price of ₹ 351/- implies a PE multiple of 14x on FY22E EPS of ₹ 24.3/- 
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