In an interview with CNBC-TV18, Dhilin Mehta, Chairman and Managing Director of Shree Ashtavinayak, spoke about his film releasing plans.
Here is a verbatim transcript of an exclusive interview with Dhilin Mehta on CNBC-TV18. Also watch the accompanying video.
Q: Is there any corporate action that you are planning because your stock is baffling to say the least? It went up 10-10% for many days and then hit a couple of down circuits, what is going on?
A: We recently declared results about the December end quarter. The total turnover of the December end quarter will be around Rs 160 crore against Rs 83 crore in 2008. For the nine month balance sheet, we had Rs 221 crore turnover as against Rs 130 crore last year. We have a PAT of around Rs 18 crore which is around 200% increase in the PAT also and a 100% increase in the total sales. So the investors have kept confidence and we are hopeful that they will do in the future also because we are scaling up the project.
In 2008 we produced about two-three films a year. In the next year 2010 and 2011 we are scaling up the projects where we are trying to make around seven-nine projects in a single year. We have already tied up actors like Akshay Kumar for a couple of films. The film like Khatta Meetha has been completed in six months. We are also launching the Golmal 3 with Ajay Devgan and Kareena Kapoor again after Jab We Met.
We are also trying to make a film with Imtiyaz Ali again with Ranbir Kapoor and one more film with Salman Khan and Farah Khan called Partner. Hence, about eight-ten good projects will be going on simultaneously with total investment outlay of about Rs 450 crore. We are expecting our gross margins of about 20-22% and that is why investors are confident enough. As far as the performance and subsidiary is concerned, we recently formed one which will look after the new expansion plans of the company which a total capital outlay of USD 100 million. So new avenues of about Rs 450-500 crore will be to try, acquire and build our own studio which has pre and post production facilities and can help us in our own shooting schedules. They can be given on rent to other production houses.
We are looking for land and as soon as we have some concrete information, we will definitely divulge the same. On the other side, we have the expertise in making mediocre and big budget films. Till date we have made about 13-14 big budget film. However, we see very good potential in making small budget films also in the range of Rs 5-15 or 20 crore. This is the new business avenue for the company and that will be taken care by the subsidiary. We are one of the leaders as far as the distribution of films is concerned. In the Bombay territory we have distributed about 30-40 good films as far as Mumbai distribution is concerned. The Mumbai territory is the heart of Bollywood where around 30-40% of the collections come so we are pioneers in that territory. Geographically we are trying to expand in other territories as well. We have distributed a couple of films in most of the other territories also, all India and all world.
Q: What is the roadmap for the movies that you mentioned through 2010? You spoke about an Akshay Kumar film and a Ranbir Kapoor film. Can you give us a calendar of release of any of these top films over the next four quarters?
A: Khatta Meetha is almost complete and will be released in the first quarter. By Diwali we are trying to release Golmal. In the third quarter, we will release a film with Imtiyaz Ali and a film with Neeraj Vora will be released in the month of May or June. In every quarter we are trying to release a couple of films or maybe atleast one. About six-eight films in a year are expected surely and simultaneously 10-12 projects are going on right now.
Q: I believe there are plans to list your subsidiary as well by the end of FY11. Any plans to prepone that a little bit and do it much before the end of FY11 and how much money are you looking to raise via that?
A: I have commenced the process of raising funds for the subsidiary. We are in talks with various merchant bankers and areas of foreign investors as well as static investors. So we will be able to give you details as and when everything is clear and the deal is done. We are looking to raise funds and will declare at the right point of time. However, this will be in the upcoming months.
Q: What about your third quarter numbers? Your revenues jumped to Rs 161 crore and I believe you have indicated that the movie Blue was released in that quarter and was added to the results. The film didn’t perform too well. How much did it contribute to this third quarter revenue figure?
A: We basically had a turnover of Rs 160 crore where about 70-80% was form production and other was from selling of the rights. We have de-risking strategy and the ultimate faith of the movie is decided by the audience. There are various media perceptions but what matters is that we are very good at de-risking strategy. We had already presold the rights and the audited figures specify the same.
Ashtavinayak stock price
On June 19, 2014, Shree Ashtavinayak Cine Vision closed at Rs 0.81, up Rs 0.00, or 0.00 percent. The 52-week high of the share was Rs 1.21 and the 52-week low was Rs 0.46.
The latest book value of the company is Rs 6.41 per share. At current value, the price-to-book value of the company was 0.13.
READ MORE ON Shree Ashtavinayak, Dhilin Mehta, Khatta Meetha, Akshay Kumar, Golmal 3, Kareena Kapoor, Ajay Devgan, Imtiyaz Ali, Ranbir Kapoor
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