Stock Update -1 Recommended Buy

Television Eighteen India
Stock Update
Going strong Buy; CMP: Rs388
Result highlights
TV18 pulled out a robust performance for Q3FY2008. The operating revenues for
the quarter grew by a healthy 73.8% to Rs112.6 crore. All the segments.news,
internet and newswire.registered high growth numbers.

The news business revenues grew by 57.5% year on year (yoy) to Rs91.4 crore
reflecting niche positioning of its channels CNBC TV18 and Awaaz. The operating
profit margin (OPM) for the segment was up 100 basis points quarter on quarter
(qoq) to 44%.

Web18 continues in investment mode. Thus despite a stupendous 161.6% yearon-
year (y-o-y) growth in the revenues to Rs17.6 crore, the operating loss stood
at Rs7.2 crore, as the company wrote off all the costs incurred (rather than
capitalising on it). Thus Web18 is spending heavily after its growth, the results
of which we believe would be seen over the longer term.

Newswire18 posted a 44% quarter-on-quarter (q-o-q) growth in its revenues to
Rs3.6 crore. The operating loss in Q3FY2008 was down at Rs1.7 crore against
Rs2.2 crore in Q2FY2008. The business is witnessing rapid subscriber addition
and we expect the business to break even in FY2009.

The consolidated OPM of the company during the quarter stood at 28.1% against
45.3% in the corresponding quarter last year Q3FY2007 (and 26.7% in the previous
quarter Q2FY2008). The overall OPM continues to be impacted by the heavy spend
on augmenting the internet and the newswire businesses. Thereby the operating
profit growth was restricted to 7.6% yoy to Rs31.6 crore.

A higher depreciation, interest and tax rate led the adjusted profit after tax
(PAT) pre-ESOP charge during the quarter to be at Rs10.8 crore against Rs19.2
crore in the same period last year (Q3FY2007).