Religare maintains buy on Balaji Tele

MUMBAI: Religare Research has maintained ‘buy’ on Balaji Telefilms for a target price of Rs 341, post its September quarter earnings.

Balaji Telefilms posted 4.4 per cent year on year decline in revenue to Rs 77.95 crore during the quarter, which was in line with Religare’s expectation. The decline was due to a steep 35 per cent reduction in the number of programming hours.

The fall in revenue would have been sharper but for the significant increase in realisation per hour at 46 per cent year on year for commissioned serials and 33 per cent for sponsored shows. The higher realisations together with a decline in production cost and telecast fees enabled operating profit to grow at a stronger pace of 14 per cent.

An improved operational performance coupled with higher other income propelled net profit above the brokerage estimates with a 36 per cent year on year growth to Rs 26.28 crore.

Balaji’s strong presence in the mass entertainment television content segment, its joint venture with Star and movie ventures through its subsidiary will enhance future performance. The target price is based on 18 times 2008-09 estimated earnings.