Friday, July 4, 2008

Stock Idea: Tips Industries

A big name in the Indian film industry, Tips Industries is a name to reckon with when it comes to music albums and now, to some extent, production and distribution of Hindi movies too. Owned by Kumar Taurani, the financial result of Tips for the year ended 31st March 2008 has been one of its best ever. 

Net profit rose by an unbelievable 874.78% to Rs 11.21 crore in the quarter ended March 2008 as against Rs 1.15 crore during the previous quarter ended March 2007. Sales rose 980.72% to Rs 74.57 crore in the quarter ended March 2008 as against Rs 6.90 crore during the previous quarter ended March 2007. 

For the full year, sales rose 352.03% to Rs 113.37 crore in the year ended March 2008 as against Rs 25.08 crore during the previous year ended March 2007. The company had a total operating expense of Rs.92.13 crore, of which it incurred Rs.66.77 crore on cost of film production and distribution. EBIDTA rose by over 7 times at Rs.24.37 crore and PBT was up from Rs.1.42 crore in FY07 to Rs.22.09 crore. Net profit rose by a jaw dropping 1757.14% to Rs 19.50 crore in the year ended March 2008 as against Rs 1.05 crore during the previous year ended March 2007. On an equity of Rs.17.30 crore, the company posted an EPS of Rs.12.07. 

The company has now got three major areas of operation - production and distribution; music and artist management. From being a mere cassette company, it has now emerged as a production house and that is soon becoming its mainfray. 

The company’s latest release was Race, did good business and infact the website of the company proclaims it as the “biggest blockbuster of 2008.” It’s another movie – Kismat Konnection is scheduled to be released on 18th July 08’. It has also signed on Raj Kumar Santoshi to make a comedy film starring Ranbir Kapoor and Katrina Kaif. It has also gained rights to the legendary film – Amar Akbar Anthony. It also released the music album of Atif Aslam - Meri Kahani, which is doing good business. Interestingly, film actor, Akshay Khanna holds 2.79 lakh shares in the company. 

Adlabs Industries is now moving very fast into all the areas which has been a domain ruled by Tips. But there is so much in the industry that many can co-exist and Tips is a brand to reckon with. Stay invested. 



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