Rating Rationale
June 23, 2023 | Mumbai
TV Today Network Limited
Ratings Reaffirmed
 
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 Limited (TVTN).

 

The ratings continue to reflect the market leadership 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.

 

The company reported revenue of Rs 878 core and earnings before interest, tax, depreciation and amortization (Ebitda) margin of 14.9% in fiscal 2023, compared to Rs 930 crore and 26.3%, respectively, in fiscal 2022, owing to industry-wide slowdown because of low ad volumes. Liquidity was Rs ~470 crore as on March 31, 2023, coupled with a debt-free balance sheet. Also, the company paid special dividend of Rs 418 crore in fiscal 2023.

 

Living Media India Ltd, whose digital operations business TVTN acquired in fiscal 2018, also remained debt-free as of March 31, 2023. CRISIL Ratings does not expect TVTN to extend any substantial financial support to the group entities over the medium term.

Analytical Approach

For arriving 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

  • Market leadership 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, along with the digital operations under the brand ‘Tak’ will continue to support the business risk profile.

 

  • Robust financial risk profile: Adjusted networth fell to ~Rs 791 crore as on March 31, 2023, from Rs ~1,102 crore a year earlier because of the special dividend of Rs 418 crore paid by the company in fiscal 2023. However, debt was nil along with robust debt protection metrics. Liquidity stood at ~Rs 470 crore as on March 31, 2023. 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 taken steps such as acquisition of the digital business of LMIL to diversify revenue. However, Aaj Tak contributes to a significant portion of the revenue and operating profit as other businesses are in the 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. However, the digital business is ramping up and has started contributing to the overall operating profit. Its impact on operating profitability over the medium term will be a key monitorable.

Liquidity: Strong

Cash and liquid investment stood at Rs 470 crore as on March 31, 2023. Net cash accrual, expected at Rs 140-180 core per annum in fiscals 2024 and 2025 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 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 15%
  • 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 LMIL’s digital operations business 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

Unit

2023

2022

Revenue

Rs crore

878

930

PAT

Rs crore

88

182

PAT margin

%

10.0

19.6

Adjusted debt/adjusted networth

Times

NM

NM

Interest coverage

Times

52

111

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 level

Rating assigned with outlook

NA

Cash Credit

NA

NA

NA

12

NA

CRISIL AA/Stable

NA

Cash Credit

NA

NA

NA

10

NA

CRISIL AA/Stable

NA

Cash Credit**

NA

NA

NA

20

NA

CRISIL AA/Stable

NA

Cash Credit*

NA

NA

NA

15

NA

CRISIL AA/Stable

NA

Cash Credit**

NA

NA

NA

15

NA

CRISIL AA/Stable

NA

Letter of Credit#

NA

NA

NA

5

NA

CRISIL A1+

NA

Proposed Working Capital Facility

NA

NA

NA

23

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 2023 (History) 2022  2021  2020  Start of 2020
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 95.0 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+   -- 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

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