>UTV SOFTWARE (NIRMAL BANG)

Snapshot
UTV Software Communications Limited operates in the verticals of Television, Movies, Broadcasting, Gaming and New Media and is thus close to achieving the status of a 3600 media company. Walt Disney, which is a leading global player in the Media and Entertainment (M&E) Industry, holds 60% stake in UTV.

Investment Rationale
■ UTV is a 3600 company which is growing across verticals in the media industry. Such a growth is attained by both organic and inorganic means. The company has recently acquired True Games which is involved in online gaming. By having an alliance with Disney the company is able to use its expertise in various fields like gaming animations, distribution of Hollywood movies etc.

■ The gaming industry is expected to grow manifolds in the coming years in India. Indiagames which is a subsidiary of UTV has 60% market share in India. Even, in the online and mobile gaming industry, the company is involved actively with the subsidiaries and its strategic partner, Disney for designing games which are made to suit the USA customers, as USA is one of the biggest market for online gaming mainly due to the accessibility of internet and mobile phones.

■ UTV’s broadcasting business is a low cost model thus reducing the gestation period for the company. All of the channels are in a ‘Pay’ and ‘Subscribe’ mode thus generating constant revenues for the company. This segment is expected to break even in FY10 with UTV
Movies already in profit in FY10.

■ UTV has 35 movies on slate to be released in next two years. Of these around 8‐9 movies are of the budget of more than Rs.30 crs. The company is planning to invest around Rs.900 crs in this segment for next 2‐3 years, and is expected to earn revenues in the range of around Rs. 400 crs in FY10. Also because the company follows a studio model & with the company reducing cost of Production the margins in this segment are set to improve going forward.

To see full report: UTV SOFTWARE