Star India Standalone Profit After Tax Dips 44 Percent In FY18 On Higher Expenses

Star India’s standalone profit after tax was down 44 percent in FY18 as expenses increased at a faster pace while revenue growth was sluggish. According to the company’s filings with the Registrar of Companies, Star India’s revenue for FY18 rose 5.8 percent to Rs 9,199 crore as against Rs 8,698 crore in FY17. The company’s net profit slumped from Rs 1,155 crore in FY17 to Rs 642 crore in FY18, a 44 percent decline.

Data provided by financial data accessed by business intelligence platform Tofler indicates that the company’s total expenditure for the year grew 18.6 percent to Rs 8,242 crore. In September 2017, Star India won the global media rights to the Indian Premier League for Rs 16,347.50 crore for five years (2018-2022).

Sources reveal that the Uday Shankar-led network’s payout to the Board for Control of Cricket in India (BCCI), included Rs 4,300 crore in the first year of the deal, while the remaining amount is to be equally divided over the rest four years. Sources said a part of the payout would have been accounted in FY18 financials, though the details are not available. This would account for the steep increase in Star India’s expenditure for the fiscal under consideration.

Other expenses, which accounted for 87 per cent of the total expenses, went up 20 per cent year-on-year to Rs 7,182.5 crore in FY18. Queries to Star India went unanswered. 

Star India hosted the first IPL season on its network from April 2018, and the revenues for the same will be reflected in the FY19 numbers. Industry estimates peg Star India’s revenue from IPL 2018 at Rs 2,000 crore.

Star India’s peer networks – Zee Entertainment Enterprises (ZEEL) and Sony Pictures Networks India (SPN) saw revenue grow in double digits in FY18. SPN saw the healthiest growth in revenue at 33.9 per cent, while ZEEL’s topline grew 28.5 per cent. SPN’s PAT grew marginally at 4 per cent, while ZEEL’s PAT grew by 84.9 per cent. The growth in SPN’s revenue could be attributed to the revenue from telecasting IPL in FY18. SPN’s estimated revenue from the tournament in FY18 was Rs 1,300 crore. ZEEL, on the other hand, exited sports broadcasting in FY17, when it sold its sports business under Ten Sports to SPN in September 2016.―Business Standard