Jul 08, 2011, 06.21 PM | Source: CNBC-TV18

DQ Ent not hit by Telengana unrest, says its work as usual

Tapaas Chakravarti, chairman and chief executive officer of DQ Entertainment in an interview with CNBC-TV18 spoke about issue and its impact on the company’s growth prospects.

Tapaas Chakravarti,, Chairman and chief executive officer, DQ Entertainment
For the last few days the one issue which has dominated politics is the Telangana issue and some of the companies which are based out of Hyderabad. In fact the entire Andhra Pradesh state seems to be facing some problems.

Tapaas Chakravarti, chairman and chief executive officer of DQ Entertainment in an interview with CNBC-TV18 spoke about issue and its impact on the company’s growth prospects.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: Are clients worried about this whole Telangana issue? Also, are you looking at moving out of the state?

A: As far as our company is concerned, 90% of our facilities are in Hyderabad. With nine facilities and a SEZ in Hyderabad, and the second facility is in Kolkata. More than 50% of our staff is from native places here. We haven’t faced any problem so far, though we hear that lot of manufacturing units they have faced problems and the investments are less in this state. But we are sitting and watching and hope some decision is taken.

Q: How does business get impacted for you? There have been the odd ‘bandh’ days but we haven’t seen any destruction of property or stoppage of work of a sustained nature. Will it be extremely difficult for you to operate if there indeed were a bifurcation at some point?

A: Yes when this kind of ‘bandh’ takes place where there is a threat on normal people, average people and probably transport is not working. It is extremely difficult situation for people to come to work. But since two days back almost 95% of people did come to work but everybody reached around 11-11:30-12:00 that is midday, so that disrupts work which is very disheartening.

On the other hand, I, as a citizen and as a CEO of this company firmly believe that even if the bifurcation takes place the business will go as usual. There is nothing to be worried about. I know very well that whichever government comes into power they will govern the state the way whichever opposition comes to power they govern. And there will be no problem at all. But there is a sense of fear in the investment and production community.

Q: What about clients? Some of your clients are from Europe, France and Italy. Some of them would only read newspapers and only go through news sites. Have you got any queries from them?

A: Nothing much from Europe, but US seems glued in on what happens to India, Pakistan and China. Several customers have asked that what has been happening and were we getting bifurcated. Clients asked us on a regular basis that whether this will harm your business in anyway. Nothing has happened so far. Last two years, this agitation has been going on.

Q: How has the order flow been? You have been making good money on your Jungle Book work which is now en-cashed into other areas into one hour specials. Could you give us an idea of the order flow? When do you expect the big jump in your revenues of the orders that you accumulate?

A: We are extremely happy and proud of our Jungle Book franchise which has been sold for television over 160 countries. At this moment, close to 42 countries are showing and this has given spurt to the booking of licensing orders from merchandising and publishing happening in Europe, Israel and Middle Eastern countries. In the first week itself, we have already recovered USD 9.2 million and around USD 28 million are expected in next three-four years’ time to come into the merchandising money.

All the broadcasters have shown their confidence and have ordered for second season. The second season is in production which will give an upside of another USD 14 million. Jungle Book is expected to be released globally by the global distributors. Jungle Book has become a very big property for us. We have huge plans for that. TV will bring USD 41 million worth of income, aside the theatrical movie which is supposed to release in 2013.

Q: How much fund raising will the company require over the next one-two quarters? How will you go about it? Will you tap equity and tech markets? What will be the route?

A: With the four banks that we work with, we are one of the marquee clients. They are helping us and we are well healed in the working capital for the time being. Towards the end of the year when the feature film production starts, these feature films are very big ticket feature films. The long-term working capital will be required to be raised other than the normal banks. We have various options open to us and very positive response from the market for raising funds. I am not talking about equity market; I am talking about debt and convertible markets. The management has to still decide which way they will go. We will require funds towards the end of the year.

Q: Why aren’t you trying to befriend the Angry Birds?

A: This is a big inspiration. We have more than 40 characters in Jungle Book and 50 characters in Peter Pan. At this moment, our animations applications division is developing several projects for applications as well as for internet gaming operations.

DQ Entertain stock price

On November 27, 2015, at 15:44 hrs DQ Entertainment International was quoting at Rs 23.25, down Rs 0.15, or 0.64 percent. The 52-week high of the share was Rs 32.50 and the 52-week low was Rs 15.50.

The company's trailing 12-month (TTM) EPS was at Rs 4.85 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 4.79. The latest book value of the company is Rs 56.54 per share. At current value, the price-to-book value of the company is 0.41.

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