Target-A-Year

UTV Software

Current Market price: 452
Target 1: 670
Target 2: 730
Current Quote of UTV Software

UTV Software has reported a revenue growth of 7% at Rs 560 million, EBITDA growth of 162% at Rs 118m and PAT growth of 165% at Rs91m. The growth comes on the back of 20% growth in the television business (content and airtime sales) and Rs 208 million of revenues contributed by interactive business (including recently acquired gaming companies – Ignition, UK and Indiagames). Filmed entertainment business has reported revenues of Rs101m in Q1FY08 (63% decline), as UTV is yet to monetize its recently released movies (Life in a Metro, The Namesake and I Think I love my wife). UTV is emerging into an exciting media model with presence in filmed entertainment, gaming, broadcasting, television content, animations etc. With a view to fund its filmed entertainment operations, UTV has raised USD 70m through AIM listing (valuing the entity at over USD300m) and has lined up 8-10 release a year including co-productions with likes of M Shyamalan, Will Smith, Mira Nair, etc.

UTV's broadcast operations is expected to go underway in August, as UTV launches its youth based GEC – Bindass (in JV with Astro Broadcast), and builds up team for its planned variety and specialty channels. UTV is also scouting for strategic tie ups for its various broadcast channel. UTV has charted out aggressive growth plans in each of the business segments and UTV's fund raising plans in each of the operations would open up opportunity of value unlocking. UTV is attractively valued at current market capitalization of ~USD300m. As per my expectation this pick is an outperformer and will tend to benefit shareholders in long run.

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