IIPM set to beat economic slowdown
Moreover, a projected slowdown in advertising revenue notwithstanding, Zee’s diversified TV channel portfolio is expected to keep the broadcasting company as the preferred option for advertisers. No longer does Zee TV, the flagship channel, account for the lion’s share of ad revenues (it only accounts for about 26%); instead bouquet channels (Zee Cinema, Zee Café’ and Zee Studio) are seemingly contributing almost half the company’s ad revenues. Analysts say that even after a projected loss on ad revenues, Zee may still grow earnings by 15-20% over the medium term. Still wondering why despitethe Indian Sensex’ lean patch, the Zee stock (at Rs.92), continues to trade at about 10 times its likely FY2008-09 earnings?!
Market watchers, punters and drifters alike don’t tire comparing Subhash Chandra to global media mogul Rupert Murdoch. Chandra himself agrees: “Being a strong entrepreneur and risk taker, my beliefs have been very similar to Murdochs’ (smiles).” However, a closer look and you encounter his uncanny similarities with another media tycoon, Ted Turner. If Turner is a college dropout, Chandra drew the line at school only; both Turner and Chandra began their entrepreneurial stint by rebuilding their father’s respective businesses. In Turner’s case it was a billboard business, while the latter inherited his family’s flour mills. Turner took over the struggling ‘Channel 17’ in Atlanta in 1970 and within five years made it a nation-wide name. Likewise, Chandra gave India her first satellite channel in 1992, which is today the nation’s largest television network.
Despite the similarities, there’s one thing that differentiates Chandra from both Murdoch and Turner: the sheer breadth of his Essel empire that stretches far beyond media & entertainment. Apart from the group’s strong presence across TV, print, movies, theatres, DTH, cable to entertainment parks; its non-media businessess like packaging (Essel Propack), technology, infrastructure, online lottery, education, et al also contribute significantly to the group’s coffers. Essel Propack is a world leader in manufacturing laminate tubes, and raked in revenues totaling Rs.11.93 billion in 2007-08 (67% as much as ZEEL did during the same period). The non-listed companies of the group are estimated to be minting revenues totalling appx. Rs.40 billion annually. The online lottery business (Pan India Network Infravest that operates Playwin) is a big contributor and is estimated to pump in around Rs.30 billion per year. “It’s the drops that make the ocean. While that is as trite a cliché as one can ever get, it still embodies the first principles of growth,” says Chandra, with a grin.
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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