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Balaji Telefilms expects margins to go up 4 pc

Latha Venkatraman

MUMBAI, Oct. 15

TELEVISION software producer, Balaji Telefilms Ltd (BTL), is expected to improve its margins from 26 per cent to over 30 per cent during the current fiscal, primarily on account of the recent hikes it has been able to secure on its programmes on Sony and Star, a senior company official said.

BTL secured a hike from Sony in the first quarter of the current fiscal and from Star in the second quarter of the current fiscal. ``We got a 25-per cent hike from Sony and a 24-per cent hike from Star. The impact of this hike will definitely get reflected in the current year and have a positive influence on the bottomline,'' Mr V. Devarajan, Chief Financial Officer, BTL, said.

BTL has been managing to secure increase in sale price of its programmes at a time when most other television software producers have been facing pressures on margins.

Of the 15 serials produced by BTL currently on television, Star is running five serials (Kyunki Saas Bhi Kabhi Bahu Thi, Kahaani Ghar Ghar Ki, Kalash, Kaahin Kissii Roz and Kasauti Zindagi Hay) and four serials on Sony (Kkusum, Kutumb, Kuchh Jhuki Palkain and Kya Haadsa Kya Haqueekat).

The hike in the sale price of these serials could augur well for the company, as a substantial portion of its content is aired on these two channels.

According to Mr Devarajan, BTL does not foresee an increase in costs during the current fiscal; therefore margins could edge up. BTL had ended the 2001/2002 fiscal with a net profit of Rs 29.02 crore (Rs 4.35 crore) on a turnover of Rs 113 crore. For the first quarter ended June 30, 2002, BTL's net profit was Rs 12.68 crore (Rs 4.94 crore) on net sales of Rs 39.77 crore (Rs 23.66 crore).

During the last fiscal, BTL had managed to hike its rates on an average of 30-50 per cent. BTL's serials have maintained high TRP ratings, according to industry sources.

The company is also in the process of reviving its plan to make telefilms as a means to add to its businesses. Currently, BTL is entirely into the production of serials — 85 per cent into commissioned programmes and 15 per cent into sponsored programmes, mainly for Gemini TV and Udaya TV.

While the concept of telefilms had been approved by both Star and Sony, the channels had put the plan on hold as they were been sitting on a huge bank of films, some of them blockbusters, Mr Devarajan said.

Mr Jeetendra Kapoor, Chairman, BTL, in the company's annual report for 2001/2002, says that Balaji has been able to leverage the ``stability of the television entertainment space in India''.

Television enjoyed wider reach as compared to cinemas. ``Content creators were able to counter falling TRP ratings and evolve their content in line with viewer preferences,'' he said.

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