Report for Bodhi Tree Multimedia Ltd.

Sources : Annual Report, DRHP, Right Issue document,

Interview: https://www.youtube.com/watch?v=46J2J_L0Whw ,
https://www.youtube.com/watch?v=aFzcJPq558M
Time Allocation: 10 hours
About
The company is in producing content for various TV channels and OTT platforms on both the
national and regional front. The company to date has produced more than 30 shows and
1500+ hours of content.

Results
Particulars (in lakhs) FY21 FY22 Q-o-Q
Revenue from Operations ₹ 3,569 ₹ 5,908 66%
Other Income ₹ 29 ₹ 30 2%
Total Income ₹ 3,598 ₹ 5,938 65%

Cost of Goods Sold ₹ 3,053 ₹ 5,417 77%

Cost of Production ₹ 2,847 ₹ 5,674 99%
Changes in Inventories ₹ 206 ₹ -257 -225%

Gross Profit ₹ 545 ₹ 521 -4%

Gross Profit Margins 15.1% 8.8%

Employee Benefit Expenses ₹ 87 ₹ 98 12%

Other Expenses ₹ 106 ₹ 113 7%

EBITDA ₹ 351 ₹ 310 -12%

EBITDA Margins 9.8% 5.2%

Depreciation and Amortisation ₹ 1 ₹ 1 -24%

EBIT ₹ 350 ₹ 309 -12%

EBIT Margins 9.7% 5.2%

Finance Cost ₹ 22 ₹ 23 7%

PBT ₹ 328 ₹ 286 -13%

9.1% 4.8%

Tax Expenses ₹ 79 ₹ -10 -113%

Profit after Tax ₹ 249 ₹ 296 19%

Share of Gain/(Loss) of Equity

Accountes Investees ₹ -0.1 ₹ -

Net Profit ₹ 249 ₹ 296 19%

Net Profit Margins 6.9% 5.0%

The company year saw significant growth in its revenue of 66% which was mainly attributed
to growth in the revenue from the Internet Program and Web series which recorded a
significant growth of 131% in the year. But due to higher growth in the cost of production,
the Margins of the company took a hit. The Revenue from TV programs saw a drop in the
year of 38%. The mix has significantly changed for the company in the year with TV
programs only contributing to the 15% as of FY22 which in FY20 was at 53%.
Particulars (in lakhs) 2020 2021 2022 Growth
Commissioned TV Program ₹ 1,415 ₹ 1,380 ₹ 857 -38%
Internet Program/Web Series ₹ 1,256 ₹ 2,189 ₹ 5,051 131%
Revenue from Operations ₹ 2,671 ₹ 3,569 ₹ 5,908 66%

% Break up
Commissioned TV Program 53% 39% 15%
Internet Program/ Web Series 47% 61% 85%

The company’s TV serials and Internet Serials in progress have seen significant growth in the
year of 78% and reached the 2020 levels. The company has started working with Netflix to
produce new series. The company is also currently working on increasing its regional
presence with ongoing projects in Tamil, Bengali, and Marathi and are planning to enter the
Telugu, Punjabi, and Marathi segment. The company is also working on a new TV show
(Next) for Zee TV.

Fundings:
The company during the financial year 2022 company took significant (I think you are
suggesting that debt level is uncomfortable. Justify in light of the fact that PBT for FY22 is
2.86 crores against TOTAL DEBT of 2.6 crores.) long-term borrowing growing from Rs. 17
lakhs to Rs. 260 lakhs taking the Debt to Equity to 0.56 (Previous Year – 0.43) with a current
Interest coverage ratio of 15.6 (Previous Year – 18.3). But most of the loans in the year have
been taken in the last quarter of the year so full interest expense is not visible in the
company’s account.
The company in the month of May 2022 did the right issue by raising Rs. 12.5 crores of
which Rs. 9.3 crores are for funding the working capital requirement but didn’t get fully
subscribed during the period for which the company extended the period of subscription. (Do
you think comparing right issues price with CMP gives some interpretation?)

Valuation
The company currently is trading at a Price/Earning of 11.8 (Please show calculation.) based
on FY22 EPS, which was trading at a PE of 6.1 as of 31st March 2022. The company has seen
significant growth in share price since 31st March growing by 126%. The earning yield of the
company has been falling currently at 8% (FY22 – 16%, FY21 – 36%).

Peer Comparison
Balaji Telefilms – The company during FY22 registered a Revenue of Rs. 336.85 crores
registering a growth of 15% of which Commissioned television programs registered revenue
of Rs. 225.69 crores growing at 22%. The company’s Internet programs saw a degrowth of
85% falling from Rs. 60 lakhs to Rs. 9 lakhs. The company has been loss-making for years.
The earning yield of the company is (FY22: -18%, FY: -21%).
I SEE DATA OF Balaji but no comparison in this para.

Opinion
The company has seen good growth in its revenue due to OTT platforms, but the shows
themselves are not getting good traction most of the TV shows of the company only run
for 1-2 years. The company has already seen significant growth in the share price since 31st
March and the valuation multiple of the company has grown significantly. It remains a risk
whether the company would be able to make more impactful shows (Tata Motors – Risk is if
the company will make impactful cars liked by users. Infosys – Risk is if the company will
continue making software liked by users. HUL – Risk is if the company will continue make
acceptable products. WHAT ARE YOU TALKING ABT?) which can be viewed by the mass
population compared to its peers to improve profitability companies need to have multiple
seasons of their shows which till now has happened with only 1 show of the company. The
cost of Production has seen significant growth and the company has been in constant
requirement of funds for its working capital requirement, which could lead to growth in
borrowings of the company in the future. – Without data it looks like global gyan. We
ascribe an ‘AVOID’ call.

Following issues not even touched –

1. Shareholding pattern.
2. Promoter’s background.
3. Hope you have considered dilution due to Right issue.
4. Reason for increase in cost of production could be dug.
5. OTT are failing worldwide (Check valuation of Netflix) – for me this is the biggest risk.
Anuj Jain Prerit Choudhary
Research Head Research Analyst

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