Rating Rationale
June 29, 2019 | Mumbai
TV Today Network Limited
Ratings Reaffirmed
Rating Action
Total Bank Loan Facilities Rated Rs.75 Crore
Long Term Rating CRISIL AA-/Stable (Reaffirmed)
Short Term Rating CRISIL A1+ (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has reaffirmed its 'CRISIL AA-/Stable/CRISIL A1+' ratings on the bank facilities of TV Today Network Limited (TVTN).
The ratings continue to reflect market leadership in the Hindi news segment, and a robust financial risk profile. These rating strengths are partially offset by significant dependence on the flagship channel, Aaj Tak, for revenue, modest operating results in fiscal 2019, and support extended to other weaker businesses.

Analytical Approach

For arriving at the ratings, CRISIL has combined the business and financial risk profiles of TVTN and its subsidiaries, together referred to as the TVTN. That's because all these 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
* Market leadership in the Hindi news segment: The flagship news channel, Aaj Tak, launched in December 2000, has maintained its leadership position in viewership amongst Hindi news channels for more than 18 years. The channel garnered viewership of 11.5 crore for the week ended June 14, 2019, highest amongst Hindi news channels.

The company took a strategic step to cut down advertisement inventory during fiscal 2019 so as to increase content to fight competition in the pre-election fiscal. This helped Aaj Tak report highest viewership on counting day with 13 crore views representing a market share of 20%. Although this led to a dip in revenue in the fourth quarter of fiscal 2019 and a modest revenue growth for the fiscal, this is expected to be a temporary setback as healthy growth in advertisement revenue is expected in fiscal 2020 driven by improvement in yields. The established market position of Aaj Tak should continue to support the business risk profile over the medium term.

* Robust financial risk profile: Cash accrual has improved driven by healthy revenue growth and profitability. Moderate capital expenditure (capex) has also helped keep gearing very low. Furthermore, there were large liquid funds of Rs 410 crore on March 31, 2019. The financial risk profile should remain robust over the medium term, driven by healthy cash accrual, moderate capex plans, and strong liquidity.

* Significant dependence on Aaj Tak:
Though steps like addition of Mail Today and acquisition of the operations of digital business from Living Media India Ltd (LMIL; 'CRISIL BBB-/Stable/CRISIL A3') have helped diversify revenue, the company remains largely dependent upon its flagship channel, Aaj Tak, to generate operating profits. Aaj Tak accounted for majority of revenue in fiscal 2019. Operating profits from other businesses remain minimal as they are still in early stages of growth and therefore should contribute to overall profits only over the long term. Dependence on Aaj Tak is expected to continue over medium term, and growth in other businesses will be a key monitorable.

* Support to weaker businesses of the India Today group: The Company acquired shares of Mail Today and India Today Online Pvt. Ltd. during fiscal 2017. Mail Today has a modest topline of Rs 33 crore with marginal operating losses. However the company has been taking steps to reduce losses through better cost management. TVTN also utilised internal funds to pay-off Mail Today's debt of Rs 36 crore during fiscal 2018. Furthermore, in fiscal 2018, TVTN acquired the operations of digital business of LMIL, which had a topline of Rs. 76 cr in fiscal 2019 growing at a CAGR of 30% over last 2 years, for a consideration of Rs 20 crore. Support to other group businesses and its impact on the company's credit risk profile will remain key monitorables.

Liquidity is strong. The cash and equivalents balance was of Rs 410 crore as on March 31, 2019. Net cash accrual for fiscal 2019 was Rs 147 crore, and is expected to grow in fiscals 2020 and 2021. Outstanding debt remains minimal while any moderate capex requirement should be easily met through internal cash accrual.  Liquidity is likely to remain strong over the medium term.

Outlook: Stable

CRISIL believes the business risk profile will continue to be supported by the dominant position of Aaj Tak in the Hindi news segment. The financial risk profile should remain strong over the medium term in the absence of any debt-funded capex.

Upside scenario
* Significant revenue growth while maintaining healthy profitability

Downside scenario
* Sharp decline in revenue or profitability
* Substantial investment in, or support to, group companies
* Significant debt-funded capex or investments

About the Company

TVTN is promoted by the India Today group. The company broadcasts 24-hour news channels Aaj Tak, Tez, and Dilli Aaj Tak (regional news) in Hindi, and India Today Television in English. The company also runs three radio stations (Ishq 104.8 FM) in Delhi, Mumbai, and Kolkata. During fiscal 2017, TVTN acquired Mail Today from LMIL while it 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 popular online video channels.
The India Today group, founded in 1975, has diverse business interests, including news channels, radio stations, a newspaper (Mail Today), a classical music label (Music Today), 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   2019 2018
Revenue Rs crore 749 724
Profit after tax (PAT) Rs crore 131 119
PAT margin % 17.5 16.4
Adjusted debt/adjusted networth Times 0.004 0.01
Interest coverage Times 555.3 65.6

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. 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)
Rating assigned
with outlook
NA Cash Credit NA NA NA 17 CRISIL AA-/Stable
NA Cash Credit* NA NA NA 30 CRISIL AA-/Stable
NA Letter of Credit** NA NA NA 7 CRISIL A1+
NA Proposed Working
Capital Facility
*Interchangeable with letter of credit, bank guarantee, and working capital demand loan
**Interchangeable with bank guarantee
Annexure - List of entities consolidated
Names of Entities Consolidated Extent of Consolidation Rationale for Consolidation
T.V. Today Network (Business) Ltd Fully consolidated Strong financial and business linkages
India Today Online Pvt Ltd Fully consolidated Strong financial and business linkages
Mail Today Newspapers Pvt Ltd Fully consolidated Strong financial and business linkages
Vibgyor Broadcasting Pvt. Ltd Fully consolidated Strong financial and business linkages
Annexure - Rating History for last 3 Years
  Current 2019 (History) 2018  2017  2016  Start of 2016
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  68.00  CRISIL AA-/Stable      31-03-18  CRISIL AA-/Stable      30-12-16  CRISIL AA-/Stable  CRISIL AA-/Stable 
Non Fund-based Bank Facilities  LT/ST  7.00  CRISIL A1+      31-03-18  CRISIL A1+      30-12-16  CRISIL A1+  CRISIL A1+ 
All amounts are in Rs.Cr.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Cash Credit 17 CRISIL AA-/Stable Cash Credit 17 CRISIL AA-/Stable
Cash Credit* 30 CRISIL AA-/Stable Cash Credit* 30 CRISIL AA-/Stable
Letter of Credit** 7 CRISIL A1+ Letter of Credit** 7 CRISIL A1+
Proposed Working Capital Facility 21 CRISIL AA-/Stable Proposed Working Capital Facility 21 CRISIL AA-/Stable
Total 75 -- Total 75 --
*Interchangeable with letter of credit, bank guarantee, and working capital demand loan
**Interchangeable with bank guarantee
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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