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Balaji Stock Downgraded After First Ever Quarterly Loss; Realizations, Commissioned Hours Drop

Balaji Telefilms Ltd, the Mumbai-based producer of television software, posted its first quarterly loss yesterday. The company swung from a net profit of Rs23.85 crore for Q408 to a net loss of Rs14.62 crore for the corresponding quarter this fiscal. Consolidated net profit dropped 99.14% from Rs95.59 crore, to Rs47 lakhs. Net sales for the quarter ended 31 March dropped 48.8% y-o-y to Rs49.41 crore.

Brokerage Angel Broking downgraded the stock to ‘Reduce’ with a target price of Rs35. On the Bombay Stock Exchange, the Balaji scrip dropped 5.36% to close at Rs41.5.

Excerpts from the Angel Broking’s latest report on the stock:

Commissioned hours of programming have reduced by 51% y-o-y during the quarter under review to 42.3 hours, owing to the decommissioning of three shows by Star Plus and one by Zee TV. “Moreover, Other Expenditure increased by a whopping 200% yoy to Rs23cr (Rs7.7cr) largely on account of significant jump in provision for doubtful debts (dues from INX Media) to Rs15.7cr, legal charges against Star and partly due to diminution in long term investments further adding to the woes.”

Film division: Balaji Motion Pictures Ltd, a wholly owned subsidiary of the company, posted a net loss of Rs23.3 crore on revenues of Rs42.6 crore. “Profitability of this division was partially hit due to Rs8.85cr write-off which the company took on account of advances made for Movie Projects which it doesn