Rating Rationale
August 26, 2024 | Mumbai
TV Today Network Limited
Ratings reaffirmed at 'CRISIL AA/Stable/CRISIL A1+'
 
Rating Action
Total Bank Loan Facilities RatedRs.100 Crore
Long Term RatingCRISIL AA/Stable (Reaffirmed)
Short Term RatingCRISIL A1+ (Reaffirmed)
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

CRISIL Ratings has reaffirmed its ‘CRISIL AA/Stable/CRISIL A1+’ ratings on the bank facilities of TV Today Network Ltd (TVTN).

 

Operating revenue improved by 8% to Rs 952 crore in fiscal 2024, from Rs 878 crore in fiscal 2023, However, operating profit fell to around Rs 86 crore, from Rs 132 crore over the fiscal 2023. Operating performance was weaker than expected due to investments made in the digital segment. That said, the financial profile continues to remain robust, and the business profile continues to remain healthy. Financial profile is reflected through nil debt and healthy cash and equivalents of Rs 469 crore as on March 31, 2024. Business profile is reflected through market leadership position in Hindi television news and online news (in segments such as YouTube and WhatsApp channels). Driven by ongoing efforts to improve cost margins and market leadership position, it is expected that consolidated operating profit (including spends on digital) is likely to touch Rs 150-160 crore in fiscal 2025.

 

The ratings continue to reflect the established market position of TVTN in the Hindi news segment and its robust financial risk profile because of strong liquidity and negligible debt. These strengths are partially offset by significant dependence on the flagship channel (Aaj Tak) for revenue and modest profitability of other businesses.

Analytical Approach

To arrive at its ratings, CRISIL Ratings has combined the business and financial risk profiles of TVTN and its subsidiaries, together referred to as TVTN. All the entities are under a common management and have strong business and financial linkages.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

  • Established market position in the Hindi news segment: The company’s flagship news channel, Aaj Tak, which was launched in December 2000, has shown strong competition among Hindi news channels. Aaj Tak has crossed the 65 million subscriber mark on YouTube and retains its position as the world’s most subscribed and watched news channel on YouTube. TVTN’s 31 dedicated digital-first video-channels, with the ‘Tez’ and ‘Tak’ brand names, have a presence across 10 content genres and five languages. The Lallantop is the first digital Hindi news platform with over 28 million subscribers and 3.3 billion views on YouTube. Aaj Tak, along with the digital first operations under the brand ‘Tak’ and ‘The Lallantop’ will continue to support the business risk profile.

 

  • Robust financial risk profile: Adjusted networth continues to remain strong at Rs 841 crore as on March 31, 2024. The company continues to have nil debt along with robust debt protection metrics. Liquidity stood at ~Rs 469 crore as on March 31, 2024. The financial risk profile will remain healthy in the long term, supported by healthy cash accrual, moderate capital expenditure (capex) and strong liquidity.

 

Weaknesses:

  • Significant dependence on Aaj Tak: TVTN has acquired the digital business of Living Media India Ltd (LMIL) to diversify its revenue base. However, Aaj Tak contributes to a significant portion of revenue and operating profit as other businesses are at early stages. Although digital operations have witnessed healthy growth, the dependence on Aaj Tak will continue over the medium term. Steady revenue growth in other businesses will be a key monitorable.

 

  • Modest profitability of other businesses: Despite healthy revenue growth and cost rationalisation in other businesses, TV broadcasting (primarily Aaj Tak) continues to be the primary driver of the bottom line. The company’s operating profitability has been impacted due to continued investments in the digital segment. TVTN reported operating profit of Rs 86 crore in fiscal 2024, as opposed to Rs 132 crore in fiscal 2023. That said, improvement of monetization in the digital formats coupled with ongoing efforts for cost rationalization should aid operating profit reaching Rs 150-160 crore in fiscal 2025.

Liquidity: Strong

Cash and liquid investments stood at Rs 469 crore as on March 31, 2024. Net cash accrual of Rs 100-120 core expected per annum in fiscals 2025 and 2026 against nil debt, will cover capex and working capital requirement over the medium term.

Outlook: Stable

The business risk profile of TVTN will continue to be supported by the dominant position of Aaj Tak in the Hindi news segment. In the absence of any debt-funded capex, the financial risk profile will remain strong in the long term.

Rating sensitivity factors

Upward factors

  • Significant revenue growth and sustenance of operating profitability above 30%
  • Increased revenue diversity while maintaining strong financial risk profile

 

Downward factors

  • Decline in revenue due to weakened market position and deteriorating business risk profile such that operating margin sustain below 12%
  • Significant debt-funded capex or investment or any large dividend impacting capital structure

About the Company

TVTN is promoted by the India Today group. The company broadcasts 24-hour news channels: Aaj Tak, Good News Today and Aaj Tak HD in Hindi, and India Today Television in English. It also runs radio stations (Ishq; 104.8 FM) in Delhi, Mumbai and Kolkata. TVTN acquired the digital operations business of LMIL in fiscal 2018. The digital business comprises Aaj Tak and India Today websites, along with various social media and online video channels.

About the Group

The India Today group, set up in 1975, has diverse business interests, including news channels, radio stations, own publications (India Today and Business Today), publications under licence (Reader's Digest, Cosmopolitan), marketing and distribution of international publications (TIME), and book publishing and printing.

Key Financial Indicators

As on / for the period ended March 31

 

2024

2023

Revenue

Rs crore

952

878

PAT

Rs crore

56

88

PAT margin

%

5.9

10.0

Adjusted debt / adjusted networth

Times

NM

NM

Interest coverage

Times

61

52

NM: Not meaningful

Note: These are numbers adjusted by CRISIL Ratings and may not match the numbers reported by the company

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

CRISIL Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the CRISIL Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit& NA NA NA 15.00 NA CRISIL AA/Stable
NA Cash Credit^ NA NA NA 20.00 NA CRISIL AA/Stable
NA Cash Credit NA NA NA 12.00 NA CRISIL AA/Stable
NA Cash Credit NA NA NA 10.00 NA CRISIL AA/Stable
NA Cash Credit^ NA NA NA 15.00 NA CRISIL AA/Stable
NA Letter of Credit$ NA NA NA 5.00 NA CRISIL A1+
NA Proposed Working Capital Facility NA NA NA 23.00 NA CRISIL AA/Stable

& - Interchangeable with letter of credit, bank guarantee, and working capital demand loan
^ - Interchangeable with working capital demand loan
$ - Interchangeable with bank guarantee

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

 TV Today Network (Business) Ltd

Full

Strong financial and business linkages

 Mail Today Newspapers Pvt Ltd

Full

Strong financial and business linkages

Vibgyor Broadcasting Pvt Ltd

Full

Strong financial and business linkages
Annexure - Rating History for last 3 Years
  Current 2024 (History) 2023  2022  2021  Start of 2021
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 95.0 CRISIL AA/Stable   -- 23-06-23 CRISIL AA/Stable 03-06-22 CRISIL AA/Stable 26-03-21 CRISIL AA/Stable CRISIL AA/Stable
Non-Fund Based Facilities ST 5.0 CRISIL A1+   -- 23-06-23 CRISIL A1+ 03-06-22 CRISIL A1+ 26-03-21 CRISIL A1+ CRISIL A1+
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit& 15 YES Bank Limited CRISIL AA/Stable
Cash Credit^ 20 HDFC Bank Limited CRISIL AA/Stable
Cash Credit 12 Canara Bank CRISIL AA/Stable
Cash Credit 10 ICICI Bank Limited CRISIL AA/Stable
Cash Credit^ 15 Axis Bank Limited CRISIL AA/Stable
Letter of Credit$ 5 Canara Bank CRISIL A1+
Proposed Working Capital Facility 23 Not Applicable CRISIL AA/Stable
& - Interchangeable with letter of credit, bank guarantee, and working capital demand loan
^ - Interchangeable with working capital demand loan
$ - Interchangeable with bank guarantee
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
CRISILs Criteria for Consolidation
CRISILs Criteria for rating short term debt

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