Tips Films LtdQ3 FY22Entertainment

Tips Films Ltd

Q3 FY22 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Tips Films aims to release at least 5 films per year in the next 1-2 years, scaling up to 12 films annually within 3-5 years.
→Revenue distribution is expected to be approximately: 30% digital rights, 30% domestic theatrical, 15% satellite rights, and 15% music rights.
→Focus on both Bollywood and regional content, including Marathi films, to capitalize on growing regional markets.
→Growth driven by a mix of theatrical and OTT releases; increasing emphasis on OTT with pre-sale models to reduce risk.
→Expected top-line for FY23 is around Rs. 70-75 crores, with potential to touch Rs. 150 crores if additional big projects release.
→Scaling production capacity and leveraging strong brand reputation to secure lucrative deals with OTT and satellite platforms.
→Long-term positive outlook with profitability expected in the 30-40% producer profit range.

Margin guidance

Category 3

→Kumar Taurani expects a profitable and sustainable movie business with achievable budgets over the long run.
→For FY23, Tips Films anticipates top-line revenue of Rs. 70-75 crores, with potential to reach Rs. 150 crores if additional big releases materialize.
→PAT guidance for FY23 is revised upward from Rs. 15-20 crores to approximately Rs. 20-25 crores, dependent on the number of film releases.
→Second-half earnings are expected to be higher than the first half due to upcoming film launches, including "Gaslight" and possibly "Merry Christmas."
→The company aims for producer profits in the range of 30-40% on movies.
→OTT is targeted as a significant growth driver, with pre-sales and tie-ups to minimize risks and scale up production capacity over the next few years.
→The 85-90% hit ratio of past films underpins confidence in sustained earnings growth.

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Fundraise plans

- There is no mention of any planned or ongoing fundraising through equity in the transcript. - The company currently has borrowings of around Rs. 20 crores as Inter-Corporate Deposits (ICD) with a 9% interest rate (not bank borrowing). - No announcements or intentions to raise new debt or equity were discussed during the call. - Focus is primarily on producing and releasing films with achievable budgets and scaling up operations to increase revenue and profitability. - The company plans to scale film releases to up to 12 per year, funded mainly by their own capacity and tie-ups rather than external fundraising. Hence, as per the call, there is no current or immediate plan for new fundraising via debt or equity.

Order book

→Tips Films has three films under production: Gaslight, Merry Christmas, and Ishq Vishk Rebound.
→Gaslight is expected to release in February 2023.
→Merry Christmas is still shooting; release decision expected by mid-December 2022.
→Ishq Vishk Rebound is an OTT film planned for release in Q1 2023.
→Additional one or two films expected to start production by March 2023.
→Tips plans to release at least five films per year for the next 1-2 years, aiming to scale up to 12 films per year within 3-5 years.
→The company is also working on regional films, including Marathi movies based on acquired life rights.
→The pipeline includes a mix of theatrical and OTT releases depending on the project.
→No specific monetary order book value mentioned, but ongoing investments exceed Rs. 78 crore in film productions.

Capex plans

Yes

→Tips Films is focusing on producing multiple films, planning to scale from 5 films per year to 12 films per year over 3-5 years, indicating ongoing investment in film production capacity.
→They have acquired life rights for a Marathi film based on Nilu Phule, signaling strategic content investment in regional cinema.
→The company is investing in production of current films like Gaslight, Merry Christmas, and Ishq Vishk Rebound, with production costs included in current assets (~Rs. 78 crores for three movies).
→No explicit mention of capital expenditure on physical assets; investments appear focused on content creation and film rights.
→Plans to build a large film library with 30-40 films over next 1-2 years are expected to create valuable intangible assets that will generate future revenue.
→Potential tie-ups and partnerships (e.g., with Matchbox for Merry Christmas) indicate a strategic collaboration approach rather than heavy standalone capex.

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