Adlabs Films

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Adlabs Films Ltd. - Q4-FY07 Results Update April 27, 2007

Price: Rs421.90 52 wk high/low: 518/171 M Cap: Rs1679Cr ($409mn)

BSE Sensex: 13909 Target Price: Rs448 Rating: Not Rated

Highlights of the quarter

100% growth in multiplex screen, having 17 properties spread over 11 cities with 62 screens.

Successfully entered into overseas distribution with release of Krrish and distributed over 40 films in USA andUK.

Acquired majority stake in Synergy (Siddartha Basu Company) to focus on TV software.

Market share in processing (Hindi) increased to 70%; completed geographic expansion into Chennai and Kolkata.

During the quarter, in creation and distribution segment, Adlabs successfully distributed prestigious films likeGuru and Black Friday and also produced the highly popular quiz show Kaun Banega Crorepati.

In the processing segment, it processed 4000 prints and 40 films. In the forthcoming quarter, it proposes to rollout video equipment rental business.

Results summaryOn an unconsolidated basis, sales increased by 150.8% (y-o-y), mainly on account of the increased contributionfrom film production and distribution from 38.1% to 59.9%. This has reduced the dependency on film processing and

trading from 43.9% to 22.4%. Interest increased drastically, in spite of this profit went up by 56.2%. Though there wasa steep increase in the staff cost by 103.9% (y-o-y), EBITDA margins has moved up from 24.2% to 47.3%, onaccount of the change in the revenue mix.On a consolidated basis, sales increased by 140.3% in FY07, on account of the increased contribution from filmproduction and distribution and Theatrical exhibition (avg. ticket price increased by 17%). This has led to increase innet profit by 158.1% and EBITDA margins increased from 35.1% to 49.0%.

ValuationThe stock trades at 23.4x FY07 earnings.

Avani Pramod ([email protected]) (91-22-22694322-25)

Summary of Financial Results for y.e. 31st March 2007 (RsCr)

Net sales 34.33 86.11 150.8% 106.25 264.16 148.6% 95.59 124.05 298.12 140.3%

Expenditure

Consumption of RM 5.51 9.60 74.3% 22.78 31.88 40.0% 9.60 22.78 31.88 40.0%

Staff cost 2.37 4.82 103.9% 6.42 14.81 130.8% 4.63 7.61 15.12 98.9%

Direct operational exps. 11.78 19.18 62.8% 25.39 46.47 83.0% 20.94 37.06 64.06 72.8%

Other expenditure 6.36 11.79 85.3% 13.09 33.92 159.1% 15.34 13.09 40.97 213.0%

Total expenditure 26.02 45.39 74.5% 67.68 127.08 87.8% 50.52 80.53 152.04 88.8%EBITDA 8.32 40.71 389.5% 38.57 137.08 255.4% 45.07 43.52 146.09 235.7%

Other Income 4.29 10.19 137.7% 6.96 50.10 620.3% 10.19 7.07 50.10 608.4%

Interest 0.03 1.65 6248.7% 0.89 3.14 253.8% 1.66 1.59 3.22 101.8%

EBDT 12.58 49.25 291.6% 44.64 184.04 312.3% 53.60 49.00 192.97 293.8%

Profit Before Tax 10.97 14.17 29.1% 38.64 77.72 101.2% 18.15 41.90 85.21 103.4%

Current tax 3.60 2.54 -29.6% 13.00 8.83 -32.0% 3.67 14.33 10.77 -24.8%

Deferred (0.75) (1.17) 57.1% (0.79) 0.95 -220.6% (0.94) (0.69) 1.09 -257.6%

Fringe benefit 0.04 0.19 346.0% 0.12 0.84 615.2% 0.10 0.15 0.77 415.5%

Reported Net Profit 8.07 12.61 56.2% 26.31 67.10 155.1% 15.33 28.12 72.58 158.1%

Adjusted Net Profit 8.07 12.61 56.2% 26.31 67.01 154.7% 15.33 26.16 71.81 174.5%

Paid-up equity capital (FV - Rs.5) 19.90 19.90 19.90 19.90 19.90 19.90 19.90

EBITDA margin 24.2% 47.3% 36.3% 51.9% 47.1% 35.1% 49.0%

EPS (Rs) 2.03 3.17 6.61 16.84 3.85 6.57 18.04

Unconsolidated ConsolidatedParticulars

Q4-FY06

Q4-FY07

%change

FY06 FY07%

changeQ4-

FY07FY06 FY07

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Adlabs Films Ltd.

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Segment-wise Revenues and Results

Segment Revenue

Film Processing and trading 15.07 19.89 32.0% 66.80 75.93 13.7% 19.89 66.80 75.93 13.7%

Theatrical Exhibition 6.18 15.69 154.1% 25.28 67.84 168.4% 19.87 41.01 86.91 111.9%

Film production and distn. 13.09 53.20 306.5% 15.23 128.74 745.1% 53.99 17.31 139.14 703.8%

34.33 88.77 158.6% 107.31 272.51 153.9% 93.75 125.11 301.97 141.4%

Segment Results

Film Processing and trading 5.03 6.14 21.9% 27.69 27.71 0.1% 6.14 27.69 27.71 0.1%

Theatrical Exhibition -1.89 -0.59 -68.8% 0.24 3.49 1327.5% 0.14 5.03 8.63 71.7%

Film production and distn 7.76 7.02 -9.5% 9.91 13.37 34.9% 8.39 7.59 13.89 83.1%

Unconsolidated Consolidated

Q4-

FY06

Q4-

FY07

%

change FY06 FY07

%

change

Q4-

FY07 FY06 FY07

%

change

Segment-wise Revenues and Results

Film Processing and trading 43.9% 22.4% 62.2% 27.9% 21.2% 53.4% 25.1%

Theatrical Exhibition 18.0% 17.7% 23.6% 24.9% 21.2% 32.8% 28.8%

Film production and distribution 38.1% 59.9% 14.2% 47.2% 57.6% 13.8% 46.1%

Segment EBIT margins

Film Processing and trading 33.4% 30.9% 41.5% 36.5% 30.9% 41.5% 36.5%

Theatrical Exhibition -30.6% -3.8% 1.0% 5.1% 0.7% 12.3% 9.9%Film production and distribution 59.3% 13.2% 65.0% 10.4% 15.5% 43.8% 10.0%

Unconsolidated Consolidated

Q4-FY06

Q4-FY07

FY06 FY07Q4-

FY07FY06 FY07

Revenue Mix


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K E Y N O T E

Keynote Capitals Ltd.

Member

Stock Exchange, Mumbai (INB 230930539)

National Stock Exchange of India Ltd. (INB 010930556)

Over the Counter Exchange of India Ltd. (INB 200930535)

Central Depository Services Ltd. (IN-DP-CDSL-152-2001)

Registered Office

4th Floor, Balmer Lawrie Building,

5, J. N. Heredia Marg,

Ballard Estate, Mumbai 400 001.Tel Nos. 022-22694322-25

Disclaimer

This report has been prepared and issued by Keynote Capitals Ltd, based solely on public information and sources believedto be reliable. Neither the information nor any opinion expressed herein, constitutes an offer, or an invitation to make anoffer, to buy or sell any securities or any options, futures or other derivatives related to such securities. Directors, officers oremployees of Keynote Capitals or its affiliates may have positions in securities covered in this report or in related investments.An affiliate of Keynote Capitals Ltd. may also perform or seek to perform broking, investment banking and other bankingservices for the company under coverage. Opinions presented herein are liable to change without notice. While due carehas been taken in the preparation of this report, Keynote Capitals Ltd. or any of its directors, officers or employees shall notin any way be responsible for any loss arising from the use thereof. Investors are advised to apply their own judgmentbefore acting on the contents of this report.

Documents

Adlabs Films