**[investwise]** UTV Software-Value Proposition; Trading At 9X FY12e Earnings

 

Morgan Stanley India Research UTV Software: Emerging Media And Entertainment Giant Bull Case scenario-Target Price Rs 750 Moderate Success Scenario-Target Price Rs 540   Investment Thesis   • UTV is trying to create a niche in some of the fastest growing media businesses – movies and gaming.   • Launch of three IPs over the next two years should result in the gaming division accounting for 32% of total F13e EBITDA.   • Attractive slate of 12 movies expected to be released over F11-F12 should result in earnings growth of 31% for the films division over F10-F12e.   • Broadcasting ventures should turn profitable in F11 and TV content should continue to grow steadily   • EV/EBITDA of 9.2x based on F12E indicates good upside from here.   Key Value Drivers   • Timing of launches, pricing and number of console games sold.   • Success of films measured through average gross collections per film, slope of improvement in non-theatrical revenues.   • Television ad market growth, rate of improvement in pay TV subscribers.   • Pace of growth in new media businesses.   Catalysts   • Success in release of films like Gujarish and Saat Khoon Maaf in F11   • Release of own IP EI Shaddai should be another trigger for the stock.   • Any announcement related to pre-sales of own IP should also act as a catalyst   Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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