After working for the Oberoi group for 25 years, Anil Madhok founded the fast-growing Sarovar...
After it palms off its loss-making subsidiaries to foolish strategic investors, what can stop NDTV from becoming a sick company?
NDTV reported a net loss of Rs34.27 crore for September quarter this year, on an operational income of Rs65.65 crore. This is not surprise. After all, it had reported a net loss of Rs11.85 crore on an income of Rs71.66 crore in the corresponding quarter last year. Indeed, NDTV has been making losses ever since it got listed. What is also not surprising is the company's statement said that revenues were "buoyant" in October and "we expect to see a turnaround in the next two quarters." Investors have been fed with enough of such rosy scenarios before. The facts have always turned out to be otherwise. What is surprising is that the company is still operational.
The fact is, NDTV has rarely made money from operations. For the last few years, its consolidated operations have been making cash losses and it has been running on money made by selling loss-making subsidiaries to foolish strategic investors like Turner International. This business of passing on the parcel is continuing even now.
In late October, NDTV has roped in Astro All Asia Networks Plc with which it will create a strategic alliance for lifestyle channels in India. Astro will acquire a 49% stake in NDTV Lifestyle by putting in $40 million, while the balance will be held by the company. NDTV Lifestyle operates NDTV Good Times, a loss-making channel with little viewership. Why Astro should be valuing this junk at $80 million beats us but NDTV has always found such buyers. NDTV Lifestyle was earlier being palmed off to Scripps of US.
After this, there will be little left to palm off. Whatever is left is losing money. Consolidated income from operations for the quarter was Rs78.48 crore and net loss was Rs 67.63 crore. This September quarter NDTV wrote off Rs24.18 as permanent loss of various investments in its subsidiaries.
NDTV, which runs channels like NDTV 24X7, NDTV India and NDTV Profit, has tried to be a broadcaster with a wide bouquet of channels but these have all flopped because of its gold-plated operations in a cut-throat business. Salaries at NDTV are humungous; carriage fees charged by distributors are high, while the advertising pie is hardly expanding. All this was obvious since 2005-06.
NDTV is a live example of two facts of the marketplace: One, private equity investors often suffer from gross misjudgement and two, glamour stocks usually deliver unglamorous returns. When launching the initial public offering (IPO) in April 2004, Prannoy Roy told investors: "We have historically made profits all through and paid good dividends. Investors should consider this while taking a decision." NDTV was backed by top private equity investors.
However, the fact is that before NDTV got listed, it had a different business model altogether. For a long period it was a content-supplier making fixed revenues. After its IPO, it attempted to be a multi-channel broadcasting company. Its IPO was over-subscribed 17 times and NDTV collected Rs110 crore offloading about 25% stake to the public. In the first year of its existence as a listed company NDTV posted a net loss of Rs50 crore (FY2004) and has been limping along all these years. It just doesn't seem to, does it? Well, here is a simple fact. The stock got listed on 19th May 2004. At the end of that day the stock price was Rs99. More than six years later, the price is Rs105.
New Delhi: Buoyed by robust economic growth, net direct tax collections crossed the Rs2 lakh crore mark during the April-October period, an increase of around 18% from that in the same period last year, reports PTI.
"Net direct tax collections in the first seven months of the current fiscal crossed the mark of Rs2 trillion and stood at Rs2,04,351 crore as on 31 October 2010 (April-October, 2010)," an official statement said.
During the April-October period of 2009, net direct tax collection stood at Rs1,73,447 crore, the statement added.
The growth in direct tax collection could be mainly attributed to the strong economic growth of the country.
The Indian economy is likely to grow by 8.5% in the current fiscal after registering a growth of 7.4% in the last fiscal.
In the direct tax category, growth in corporate income tax was 22.05% at Rs1,34,251 crore as on 31 October 2010 against Rs1,09,996 crore in the same period during the last fiscal.
Meanwhile, growth in collections from personal income tax, including securities transaction tax, residual fringe benefit tax and banking cash transactions tax, was 10.33%. The collections from personal income tax stood at Rs69,722 crore as on 31 October 2010 as against Rs63,195 crore collected during the same period in last fiscal.
The budget had estimated to collect Rs4.30 lakh crore direct tax in the current fiscal.
Wealth tax collections stood at Rs378 crore during April-October this year against Rs319 crore collected during the same period last fiscal, an increase of 18.50%.
In the personal income tax category, the growth in collections from Securities Transaction Tax was, however, negative at 6.80%. The collections from Securities Transaction Tax were Rs3,602 crore as on October 31, 2010 as against Rs3,865 crore collected during the same period in last fiscal.