Rating Rationale
March 31, 2018 | 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 Ltd (TVTN).
The ratings continue to reflect TVTN's market leadership in the Hindi news segment, and robust financial risk profile. These rating strengths are partially offset by significant dependence on the flagship channel, Aaj Tak, for revenue, 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 including TV Today Network (Business) Ltd, India Today Online Pvt Ltd and Mail Today Newspapers Pvt Ltd (Mail Today) together referred to as TVTN Group.

Key Rating Drivers & Detailed Description
* Market leadership in the Hindi news segment: The leadership position in the Hindi news segment arises from the established position of Aaj Tak. The channel has maintained its strong position ever since its launch in December 2000. Aaj Tak has maintained highest viewership amongst Hindi news peers recording more than 107.8 million impressions for the week ended March 16, 2018. The established market position of Aaj Tak should continue to support TVTN's business risk profile over the medium term.
* Robust financial risk profile: Cash accrual has grown steadily driven by healthy revenue growth. Moderate capex plans have also helped keep gearing low, at 0.06 time as of March 2017. TVTN utilised internal funds to repay debt in Mail Today in fiscal 2018. Financial risk profile is expected to remain stable, underpinned by healthy cash accruals and moderate capex plans.
* Significant dependence on Aaj Tak: TVTN's advertisement revenue, remains dependent on its flagship channel, Aaj Tak, on account of limited topline contribution from its other news channels. Though, India Today Television has gradually improved upon its market position over last couple of years however since the overall English news channel segment remains small in size therefore its contribution to overall advertising revenue remains small. TVTN's other Hindi news channel, Tez, does not have a substantial viewership share. TVTN's dependence on Aaj Tak is expected to continue over medium term.
* Support to weaker businesses of group: The company acquired Mail Today from Living Media India Ltd (LMIL; 'CRISIL BBB-/Stable/CRISIL A3') during fiscal 2017. Mail Today has a modest topline of Rs 36 crore while it continued to report operating losses. 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 digital business of LMIL, which had a topline of Rs 46 crore. The company expects to diversify its revenue profile while gaining synergy benefits from common use of news-gathering platforms for its multiple businesses. TVTN's support to other group businesses and its impact on company's credit profile will remain a key monitorable.
Outlook: Stable

CRISIL believes TVTN's business risk profile will continue to be supported by the dominant position of Aaj Tak in the Hindi news segment. The financial risk profile will remain strong over this period in the absence of debt-funded capex.
Upside scenario
* Revenue diversification while maintaining healthy profitability
Downside scenario
* Sharp decline in revenue or profitability
* Substantial investment in, or support to, group companies
* Significant debt-funded capital expenditure or investments

About the Company

TVTN is promoted by the India Today group. TVTN broadcasts 24-hour news channels Aaj TakTez, 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. The company has also received board approval for acquisition of newspaper publishing business from Mail Today and it now awaits other regulatory approvals.
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   2017 2016
Revenue Rs crore 609 547
Profit after tax Rs crore 99 94
PAT margins % 16.3 17.3
Adjusted debt/adjusted networth Times 0.06 0.01
Interest coverage Times 21.60 835.56

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 NA NA NA 21 CRISIL AA-/Stable
*Interchangeable with letter of credit, bank guarantee, and working capital demand loan
**Interchangeable with bank guarantee
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Commercial Paper  ST    --    --    --    --  19-10-15  Withdrawal  CRISIL A1+ 
Non Convertible Debentures  LT    --    --    --    --  19-10-15  Withdrawal  CRISIL A+/Positive 
                    18-09-15  CRISIL AA-/Stable   
Fund-based Bank Facilities  LT/ST  68  CRISIL AA-/Stable    No Rating Change    No Rating Change    No Rating Change  18-09-15  CRISIL AA-/Stable  CRISIL A+/Positive 
Non Fund-based Bank Facilities  LT/ST  CRISIL A1+    No Rating Change    No Rating Change    No Rating Change    No Rating Change  CRISIL A1+ 
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
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

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