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Creative Eye Ltd |
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Executive Summary |
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| Business | ||||||||||||||||||||||||||||||||||||||||||
Creative Eye Ltd. was incorporated in 1986 and was converted into public limited company in 1996. It started off with its first serial Kahan Gaye Woh Log which was telecast on DD. This was followed by Adalat, Sansar. In 1997 it began producing Om Namah Shivay, which has been consistently rated among the top five programs on DD. It diversified into sports programming also. Since 1986, the company on a regular basis, has been adding to its production equipment, post production equipment, vehicles and premises. Creative Eye Ltd. is presently engaged in the production of TV software for Doordarshan and other satellite channels. The company is present in all the activities of the production process, which involves conceiving the programs, getting approval from channels, scripting, establishing production teams, pre-production, production, post production, marketing air time, getting the program telecast. The company has been promoted by Mr.Dheeraj Kumar Kochhar and Ms.Zuby Kochhar. |
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| Industry Scenario | ||||||||||||||||||||||||||||||||||||||||||
Until the early 90's, the entertainment industry in India was mainly fuelled by film industry. The growing popularity of TV as a communication medium has resulted in the TV media sector undergoing a rapid transformation. Given its popularity, percentage ad spend has also increased proportionately on this medium. Into a certain level of consolidation in the cable industry, satellite broadcasters depended on advertising revenue. Increasingly, more and more channels are beginning to increase their revenue. With a sudden jump in channels from one to over fifty, the advertising revenue portion has been further fragmented. |
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| Financials | ||||||||||||||||||||||||||||||||||||||||||
| The company's
total income during 1997-98 and 1999-2000 was high because of high sales of TV
Commercials. The net profit, from 1995-96 to 1999-2000, had increased about 32 times and
at CAGR of 30.8 percent. Net profit increased at a CAGR of 139 percent. EPS for the year
1999-2000 on a weighted average basis was Rs.7.22/-. |
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* for Equity shares at a face value of Rs.10/- per share |
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| Project Analysis | ||||||||||||||||||||||||||||||||||||||||||
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| Critical Success Factors | ||||||||||||||||||||||||||||||||||||||||||
| The company
has good presence in mythological segment which has excellent mass market potential,
through the serial "Om Namah Shivay" on DD. It has launched "Shree
Ganesh" on Sony Entertainment television. The company over the last 14 years, built up a software library of 1000 hours of programming content which can be used for repeat telecast over a period of time. During the period 1998-2000 the company has marketed a total of 44 Hindi feature films on DD and its allied channels. During the financial year 2001 it proposes to market 64 feature films on the same channels. The company also started telecasting various programmes in South Indian languages. |
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| Competitive Position | ||||||||||||||||||||||||||||||||||||||||||
| The industry
is basically divided into two segments, individual players and organised peoduction
houses. Individual players usually have one program on air at periodic intervals.
Organised production houses on the other hand have several programs on air simultaneously.
Such players have production and post production facilities in-house. Creative Eye's
competition is from UTV, Sri Adhikari Brothers, Cinevista Communications Ltd., Sagar
Productions, TV 18 etc., Future plans of the
company include diversifying to satellite channels, increasing marketing efforts in films
and sports, export of its product, which means direct contribution to its bottom line, new
related business ventures. |
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| Market Scenario | ||||||||||||||||||||||||||||||||||||||||||
The Entertainment Industry, Tele Vision in particular, has undergone a world of transformation. Number of channels has increased from one to fifty, thereby increasing the competition among the players tremendously. Given the growing advertising spends on television and the consequent growing demand for good quality entertainment content, there will be a large and growing market for services in this industry. |
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| Recommendation | ||||||||||||||||||||||||||||||||||||||||||
| The company has been into the market for about 15 years now and has also shown consistent growth performance. PE ratio of the company at the current price of Rs.50/- and with the weighted average EPS of Rs.7.22/- is 6.92. Compared to the industry's average PE ratio of 74.07, the scrip shows chances of appreciation in future. | ||||||||||||||||||||||||||||||||||||||||||
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