Moser Baer targets $60 mn from entertainment biz

MUMBAI: Moser Baer India has posted a net profit after taxes of Rs 96.42 million for the quarter ended 30 June, 2007, which is up 49 per cent as compared to Rs 64.72 million for the quarter ended 30 June, 2006.


The company’s total income has increased from Rs 4880.91 million for the quarter ended 30 June, 2006 to Rs 5002.77 million for the quarter ended 30 June, 2007.


The company expects to achieve $50-60 million of revenues in the current fiscal its entertainment business. During the quarter, the company continued its pan-India rollout and launched its products in Andhra Pradesh and completed the national rollout with the launch in West Bengal. With copyrights/exclusive licenses of over 7,500 titles, the company is the largest content owner in the home entertainment business and the only company with a pan India presence across all major language.


 


As part of its business strategy of building a three-tiered channel, the company has lined up 21 C&FAs, 450 distributors across the entire country and its products are now available in over 100,000 outlets, including stationery shops, telecom shops and regular audio and video outlets. The company plans to acquire more titles in the coming quarters.





Moser Baer India entertainment business CEO Harish Dayani said, “We have recently successfully completed the pan-India launch of our business. The success of the business model is becoming evident as we continue to see demand far higher than anticipated. While the business has started contributing to revenues, we are very confident that the business will start significantly contributing to the Company’s profitability by the end of the fiscal year.”


 


Currently the Indian home video accounts for a mere eight per cent of the total film revenues of Rs 84.50 billion (Rs 8,450 crore), which is low compared to global standards. The US home video market is almost double the size of the theatrical market with revenues of over $ 16.7 billion. According to the FICCI-PwC report on the Indian Entertainment and Media industry, the home video market shows the maximum potential in terms of growth rates among the various segments. The home video market grew a whopping 63 per cent from 2005 to touch the Rs 6.5 billion mark. This segment is expected to make a continually increasing contribution to the total revenues earned by the Indian film industry and expected to grow at a CAGR of 31 per cent to Rs 25 billion by 2011.


 


Moser Baer’s entertainment division is also looking at various selective opportunities in areas like content creation including non-film content, content distribution in other than physical forms like digital distribution and content aggregation and syndication, and explore possibilities to launch home video products in the overseas markets. 


 



The company is to spend $100 million in capex over the next three years on the entertainment business.


 


Moser Baer India executive director Ratul Puri said, “Despite the sharp negative influence of the rupee appreciation during the traditional summer slowdown, the optical media business performance remains satisfactory. The entertainment business is growing ahead of expectations and is a highly scalable business. The other key positive during the quarter is the commencement of shipments by the photovoltaic business.” 


 


Moser Baer India Group CFO Yogesh Mathur added, “Despite the traditional weak summer season, we have maintained profitability margins. The optical media business cycle will only improve from here as we enter the traditionally strong second half. We should continue growing this business at 25 per cent plus CAGR over the next three years, while improving asset turnover and healthy margins should ensure that this business will also remain highly free cash accretive.”

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