Balaji Telefilms in the thick of action

Balaji Telefilms advanced further on Monday on sustained buying support.

The stock of the television content maker spurted by 6.93% to Rs 80.25 on the BSE by 14:40 IST. A relatively higher volume of 81,037 shares was recorded on the counter.

Balaji Telefilms scrip, in the last five sessions, rose by 15% from Rs 69.85 on 27 January 2003. Earlier, in seven sessions between 16 and 27 January 2003, the scrip shed 20% from Rs 87.20.

Dealers said the follow-up buying on the counter was due to a series of positive developments, like the reports that US-based Alliance Capital is not shutting down its operations in India as it perceives there is potential for strong growth in the Indian mutual funds sector. Earlier reports that Alliance Capital is closing down its Indian operations led to huge selling pressure on the BTL counter.

Alliance Capital had a 7.2% stake, or 37,18,295 equity shares, of BTL as on 31 December 2002. The promoters' holding in BTL stood at 57.8%, while that of the public was 5.65% and institutions (including foreign as well as domestic) was 29.7%.

The rise in the BTL scrip was also attributed to the impressive results of the company. On 30 January 2003, BTL posted a massive 105.3% rise in net profit to 17.47 crore (for Q3 ended 31 December 2002) compared to Rs 8.51 crore in the corresponding period of the previous year. Total income increased by 73.5% to Rs 52.74 crore from Rs 30.40 crore in DQ 2001. Revenues from commissioned programmes jumped by 87.6% to Rs 433.04 crore (Rs 4.33 billion), while that from sponsored programmes soared by 32% to Rs 93.89 crore.

Analysts were expecting BTL to record a net profit in the Rs 16.2-17 crore range. Net sales were expected to grow by 70-75.5% to Rs 51.4-53 crore.

The company's television serials continue to do well, helping it to garner huge revenues. As for the company increasing its focus on the commissioned category of programmes, analysts felt the company may prove its might there as well. Therefore, the shift from sponsored programmes to television rating points-linked commissioned programmes is a judicious decision, according to analysts.

However, the only cause for concern is that the company's margins will come under pressure if BTL's serials are taken off air for some reason or the other. Production of serials under the commissioned category is costlier.

Meanwhile BTL issued a guidance for the full year ending 31 March 2003, which spelt out a 60% rise in total income and a 95% growth in net profit.