Odisha Television FY20 net profit jumps to Rs 16.87 cr

We have been working on getting the right content mix for our channels and the popularity of each genre, says OTL MD Jagi Mangat Panda Odisha Television Limited (OTL), which currently operates five Odia language channels, has increased its FY20 net profit to Rs 16.87 cro

by Javed Farooqui
Published - December 15, 2020
4 minutes To Read
Odisha Television FY20 net profit jumps to Rs 16.87 cr

We have been working on getting the right content mix for our channels and the popularity of each genre, says OTL MD Jagi Mangat Panda Odisha Television Limited (OTL), which currently operates five Odia language channels, has increased its FY20 net profit to Rs 16.87 crore compared to Rs 9.16 crore in the previous fiscal. In FY18, the company's net profit stood at Rs. 8.3 crore. According to a report by credit rating agency ICRA, the company's operating income has jumped to Rs 147.24 crore from Rs 122.74 crore in FY19. The operating income stood at Rs.104.3 crore in FY18. The operating profit margin, however, declined to 25.1% in FY20 on account of bad debts written off towards receivable from Ortel Communications Limited (OCL), which was referred to the National Company Law Tribunal (NCLT) in the previous year. The net profit margin increased to 11.5% in FY20 from 7.5% in FY19 on account of a provision for diminution in the company’s investment in OCL in FY2019. The overall business return indicators remained healthy. OTL’s gearing remained conservative at 0.3 times as of March 31, 2019, despite a rise in debt levels for funding capital expansion plans, while the debt coverage indicators remained comfortable on the back of stable profitability. Advertising revenue grew by 12% in FY20 on the back of increased advertising rates. Differentiated content, which resulted in higher viewership and in turn greater advertising demand, was the primary driver for the same. Ad revenue contributed more than 70% of the company’s operating income in FY20. "Our focus on content has been the main driver of our growth. Obviously, this hasn’t happened overnight. We have been working on getting the right content mix for all our channels and the popularity of each genre (news, GEC, devotion, music, and movies) is quite evident in the ratings each of them gets thereby making them the market leader in their respective genre. This in turn has helped our sales team get better ERs (effective rates) for our products individually as well as collectively," OTL MD Jagi Mangat Panda told exchange4media.com. During the first quarter of FY21, the company's revenue in general and ad revenue, in particular, was adversely impacted due to the pandemic. However, ICRA believes that the impact on OTL's operating income in the full year is likely to be limited. "Due to COVID, our revenues have been hit. We still have one full quarter left. My guess is that we will not see a growth in fact we will be happy if we achieve our last year's numbers as long as it’s not negative," Panda said adding, "As for FY22 we are hopeful to see double-digit growth." Subscription revenues, which accounted for more than 25% of the company’s operating income in FY2020, recorded a 69% growth during the year supported by increasing digitisation and implementation of TRAI’s order related to subscriber-based revenue. Going forward, a steady increase in both advertising and subscription revenues is expected to boost the overall scale of the company, the ICRA report said. OTL’s distribution reach is supported to some extent by its arrangements with Ortel, with around 12-15% of its subscribers being on Ortel’s network. ICRA notes that Ortel has been facing liquidity issues in recent quarters. However, the diversified distribution of OTL’s channels through all major Direct-to-Home (DTH) providers and other cable operators is likely to cushion OTL’s operations against distribution issues in Ortel, it added. Queried about the company's OTT service Tarang+, Panda said that Tarang plus has been growing gradually ever since its launch both in terms of subscribers and revenue. "Since we were the first ones to have launched an OTT platform in Odisha. Viewers are not yet used to paying for premium content also due to COVID we have not been able to make much original/ premium content for OTT. But we do hope to see exponential growth in FY22 both due to more original content as well as the awareness in the market." ICRA has reaffirmed OTL's rating. The total rated amount is Rs. 39.90 crore across instruments like bank term Loans, fund-based limits, and non-fund-based limits. The rating considers the extensive experience of OTL’s promoters and the established market position of the company in the regional broadcasting industry in Odisha. OTL operates five Odia language channels – OTV, a news and current affairs (NCA) channel launched in 1997; Tarang, a general entertainment channel (GEC) launched in November 2006; Tarang Music, a music channel launched in April 2009; Prarthana, a devotional channel launched in April 2010; and Alankar, a premium movie channel launched in March 2015. The company also operates Desh TV, which is a Chhattisgarh-based Hindi language news and current affairs channel launched in January 2013. It had also set up a movie production house named Tarang Cine Productions in FY2015. While OTV and Desh TV are free-to-air (FTA) channels, Tarang, Tarang Music, Prarthana, and Alankar are pay channels. City Plus, a digital channel covering in-city events, originally launched by OTL, has been hived off to a different entity.

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