Company Overview. FY15 and recent performance. Table 1: Key financials. Source: Company, Varhad Research

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1 Movies & Entertainment l BSE Research JMD Telefilms Industries Ltd. The Varhad Group CMP: INR2.82 Stock data BSE code BSE ID JMDTELEFILM Face value (INR) 1 No of shares (m) Market cap (INRm) m avg. daily vol (No) 9,410.4 Free float (INRm) Dividend yield FY15 (%) 1.8 S&P BSE Sensex 26,145.7 Company Overview JMD was originally incorporated in year 1984, as Avtar Finance & management consultants. In 2001, the company diversified from finance to regional entertainment industry and changed the name to JMD. It is an Indian business conglomerate having revenues of more than INR2bn & having a diversified business portfolio spanning across different industries viz a viz entertainment, digital, ecommerce, education, distribution, retail, investment, infrastructure, media, trading & services sectors. JMD has about 1200 music albums and over 30,000 song titles in their portfolio. It has expanded its reach by organizing regional concerts & events. JMD also produce shows for regional Television & Radio channels in India. Stock performance (%) 52-week H/L 11.7/1.7 1M 3M 12M Absolute (%) Relative (%) Shareholding pattern (%) Promoters FIIs DIIs Others 21.21% 0.00% 0.00% 78.79% Relative stock movement FY15 and recent performance Net sales in FY15 increased to INR5022.6m from INR3826.6m in FY14. EBITDA decreased from INR11.5m in FY14 to INR8.6m in FY15. The company reported net profit of INR8.5m in FY15, compared to net profit of INR7.0m in FY14. In balance sheet, fixed assets decreased from INR44.6m in FY14 to INR40.2m in FY15. Loans and Advances increased from INR327.1m in FY14 to INR342.0m in FY15 and Cash & Bank Balances decreased from INR41.3m in FY14 to INR26.4m in FY15. Operating cash flow for the firm decreased from INR3.1m in FY14 to negative INR109.9m in FY15. Revenue had decreased from INR1,396.9m in Q2FY15 to INR423.7m in Q2FY16, whereas operating loss of INR0.6 was recorded in Q2FY16. In Q2FY16, net profit has increased by 47.7% YoY from INR2.8m in Q2FY15 to INR4.1m. Source: BSE Table 1: Key financials (Y/e March) FY 13 FY 14 FY 15 Sales (INRm) 2, , ,027.9 YoY Growth (%) EBITDA (INRm) Dec 2015 EBITDA Margin (%) PAT (INRm) EPS (INR) YoY Growth (%) RoE (%) P / E (x)

2 Industry Overview The Indian Media and Entertainment (M&E) industry is INR830bn (USD13.23bn) industry and is growing in high strides. It proved its resilience by being on the cusp of a strong phase of growth, hacked by increasing consumer payments and advertising revenues across all sectors even when the global economy was going through tough phase. The Indian M&E industry has evolved greatly over the last decade against the backdrop of shifting customers preferences towards niche content and digital delivery platforms, incremental business model, hyper competition due to entry of local and global players, and evolving regulations along with easier access to capital and emergence of multiple entertainment options. Going by market speculations, the overall M&E industry is expected to grow at a compounded annual growth rate of 15 percent per annum over the next three years to reach about INR1.66tn by Board of Director Table 2: Composition of Board Name Director type Business relationship with company Mr.Kailash Prasad Purohit Director Chairman & Managing Director Mr. Jagdish Prasad Purohit Director Non-Executive Director Mr.Johar Pal Singh Director Independent Director Mr.Mohit Jhunjhunwala Director Independent Director Ms.Renu Kedia Director Independent Director Source: Company Key Strength and growth drivers Music is the main important part of Indian film industry. According to Deloitte India, India s digital music industry is expected to cross INR31bn in revenue by 2020, while the number of online music listeners in India is expected to reach INR273m. In line with this, marketers are now shifting their advertising spends towards digital media. Around 36% of total ad spends are expected to be directed towards the digital space. Risk and concern Local competition, piracy is the biggest threat to digital music. Content management and stiff competition from local players. Interim Performance In Q2FY16, the revenues had decreased YoY by 69.7% to INR423.7m as against INR1,396.9m in Q2FY15. On operational front, in Q2FY16, the Company reported operating loss of INR0.6m as against a profit of INR2.4m in Q2FY15. In Q2FY16, net profit has increased by 47.7% YoY to INR4.1m as against INR2.8m in Q2FY15. 2

3 Table 3: Summary of year to date performance (INRm) Q2FY16 Q2FY15 YoY % Q1FY16 QoQ% H1FY16 H1FY15 YoY % Revenue , , EBITDA EBITDA Margin (%) PAT Competition analysis Table 4: Peer comparison CMP Mcap Rev (INR) (INRm) (INRm) NPM (%) EPS(INR) PE(x) JMD Telefilms Industries Ltd , EROS International Media Ltd , , Saregama India Ltd , DQ Entertainment (I) Ltd , , Source: BSE Financial snapshot Chart 1: Sales trend Chart 2: Margin trend Chart 3: EPS trend Chart4: Working Capital Profile 3

4 Financial Summary Profit and loss (INR m) Balance sheet (INR m) Year ending 31 March FY13 FY14 FY15 Year ending 31 FY13 FY14 FY15 March Revenue 2, , ,027.9 Net Block Direct Expense 2, , ,004.7 Investments Staff Cost Cash and Banks Balance Other Expenditure Inventory Total Cost 2, , ,013.6 Sundry Debtors , ,096.8 EBITDA Loans and Advances EBITDA margin (%) Other Current Assets Depreciation Other EBIT Total Assets 1, , ,828.3 Interest Expenses Gross Debt Non-operating Income Trade Payables , ,433.5 PBT Provisions & other curr lia Provision for Tax Others PAT Equity Capital Growth % Reserves & Surplus PAT margin (%) Share Application money Minority Interest Minority Interest Extra Ordinary Shareholders' funds PAT (Reported) Total Liabilities 1, , ,828.3 Cash Flow Metrics Ratios, growth and per share analysis FY13 FY14 FY15 Y-o-Y % change FY13 FY14 FY15 Net Profit before tax Revenue Operating Cash Flow EBITDA Investing Cash Flow Recurring EPS Financing Cash Flow Ratios (%) Net Change in Cash ROE Op.cash and Equivalent ROCE Cl.cash and Equivalent EBITDA Margin Ratio - Du Pont Analysis Net Debt/Equity (x) FY13 FY14 FY15 Net Debt/ EBITDA (x) Net Profit Margins (%) Inventory days Total Assets Turnover Debtors days Leverage Multiplier Payables day ROAE (%) Total Asset TO ratio Valuation Fixed Asset TO Ratio FY13 FY14 FY15 Per share data (INR) EV/Sales EPS reported (diluted) EV/EBITDA Recurring EPS (diluted) P/E (x) DPS P/B(x) Book Value(basic) Dividend yield (%) Wtd avg ord shares (m) FCF yield (%) Wtd avg dil shares (m) Note: (*) Not Applicable, Source: BSE, Company, Varhad research 4

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