In this article, we will explore TV18 Broadcast Ltd. fundamentally, understand its business model and industry, and determine whether it’s a good investment fit for you.
TV18 Broadcast Ltd.
TV18 Broadcast is a media giant that is primarily engaged in activities that span broadcasting, digital content, and allied businesses. It is a subsidiary of the much larger Network18 Media & Investments Ltd. TV18 Broadcast also runs the biggest news network in the country, covering not only business and general news, but also regional news in different states.
On JioCinema, which is the country’s #1 OTT platform currently, TV18 has a reach of more than 240 million people. In the news category, it commands a respectable 11.7% share of viewership, compared to 10.3% in the non-news genre. According to estimates by the company, the average Indian consumer spends roughly 50 minutes every single day watching one of TV18’s channels on television.
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Is the broadcasting industry a good sector to invest in?
India’s media and entertainment industry is expected to reach $100 billion by 2030. It has a humongous existing media and distribution sector, with over 800 satellite TV channels operating today, not to mention 6,000 multi-system operators, around 60,000 local cable operators, 7 DTH operators and many IPTV service providers.
According to the latest data, the growth rate in the industry pushed 11% year-on-year in 2022-23.
The transition from analog to digital broadcasting has played a crucial role in the growth of the industry in India. With growth levels rising and the ever-expanding middle class, people have more disposable incomes to shift towards entertainment and advanced broadcasting services.
That, along with the increasing popularity of OTT services, has created a lucrative opportunity for investment in the broadcasting industry of India.
While television broadcasting is falling out of favour due to increased concerns of bias and fake news, OTT platforms of all kinds are the new choice. Platforms like Netflix, Amazon Prime Video, Disney+ Hotstar, and others have gained a significant user base in India.
Who are its competitors in the broadcasting sector?
Here are some of TV18BRDCST’s competitors:
- Sun TV Network Ltd.
- TV Today Network Ltd.
- New Delhi Television Ltd.
- Zee Media Corporation Ltd.
- Zee Entertainment Enterprises Ltd.
History of TV18 Broadcast Ltd.
TV18 Broadcast belongs to Network18 Group, which is based in Mumbai. The company was incorporated under the Companies Act in June 2005, and became a publicly traded company in December 2005.
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Investing in TV18BRDCST
- The stock is currently trading at less than its book value, almost 0.44 times.
- Analysts expect the company to come back with good quarter numbers this year.
- They have higher than industry revenue growth at 31%, with an average industry average of 8% only.
- Market share has been consistently increasing, from 11% to more than 29% in the last 5 years
- While the industry is making losses at around -6% net income, the company is making yearly profits of 64%!
- Although the company is posting repeated profits every quarter, the company is not paying out dividends.
- It has a low-interest coverage ratio, which puts its ability to pay back its loans into question.
- The company has also had a low return on equity over the last 3 years at a little more than 8.5%
- Working capital days have also increased from a little over 270 days to well over one year.
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Shareholding pattern of TV18 Broadcast Ltd.
Here’s the shareholding pattern of TV18BRDCST:
- Promoters: 60.40%
- Foreign Institutional Investors (FIIs): 8.55%
- Domestic Institutional Investors (DIIs): 3.10%
- Public: 27.94%
In the past 6 months, promoter holding has remained constant, which is generally a good sign. Pledged holding levels remain low for TV18, which is also a good thing. However, there was a sharp decline in foreign institutional money in the company, which fell from 10.25% in June 2022 to 8.58% in December 2022.
Peer multiple comparison
|Sun TV Network Ltd.
|Zee Entertainment Enterprises
|TV Today Network Ltd
Compared to industry standards and recognising Zee Entertainment Enterprises as an outlier, TV18 Broadcast can be seen as highly overvalued right now according to its P/E ratio. While the P/B ratio seems more in line with its peers, further analysis into its earnings and price is warranted.
So, that’s a brief overview of everything you need to know about TV18 Broadcast Ltd. before investing. This information is by no means, however, exhaustive, and we encourage you to do your own research before investing.
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