K E Y N O T E

Adlabs Films Ltd. - Q4-FY07 Results Update

Price: Rs421.90 BSE Sensex: 13909
Highlights of the quarter 100% growth in multiplex screen, having 17 properties spread over 11 cities with 62 screens. Successfully entered into overseas distribution with release of Krrish and distributed over 40 films in USA and UK. Acquired majority stake in Synergy (Siddartha Basu Company) to focus on TV software. Market share in processing (Hindi) increased to 70%; completed geographic expansion into Chennai and Kolkata. During the quarter, in creation and distribution segment, Adlabs successfully distributed prestigious films like Guru and Black Friday and also produced the highly popular quiz show Kaun Banega Crorepati. In the processing segment, it processed 4000 prints and 40 films. In the forthcoming quarter, it proposes to roll out video equipment rental business. Results summary On an unconsolidated basis, sales increased by 150.8% (y-o-y), mainly on account of the increased contribution from film production and distribution from 38.1% to 59.9%. This has reduced the dependency on film processing and trading from 43.9% to 22.4%. Interest increased drastically, in spite of this profit went up by 56.2%. Though there was a steep increase in the staff cost by 103.9% (y-o-y), EBITDA margins has moved up from 24.2% to 47.3%, on account of the change in the revenue mix. On a consolidated basis, sales increased by 140.3% in FY07, on account of the increased contribution from film production and distribution and Theatrical exhibition (avg. ticket price increased by 17%). This has led to increase in net profit by 158.1% and EBITDA margins increased from 35.1% to 49.0%. Valuation The stock trades at 23.4x FY07 earnings. Summary of Financial Results for y.e. 31st March 2007 Unconsolidated Particulars Net sales Expenditure Consumption of RM Staff cost Direct operational exps. Other expenditure Total expenditure EBITDA Other Income Interest EBDT Profit Before Tax Current tax Deferred Fringe benefit Reported Net Profit Adjusted Net Profit Paid-up equity capital (FV - Rs.5) EBITDA margin EPS (Rs) Q4FY06 34.33 5.51 2.37 11.78 6.36 26.02 8.32 4.29 0.03 12.58 10.97 3.60 (0.75) 0.04 8.07 8.07 19.90 24.2% 2.03 Q4FY07 86.11 9.60 4.82 19.18 11.79 45.39 40.71 10.19 1.65 49.25 14.17 2.54 (1.17) 0.19 12.61 12.61 19.90 47.3% 3.17 % change 150.8% 74.3% 103.9% 62.8% 85.3% 74.5% 389.5% 137.7% 6248.7% 291.6% 29.1% -29.6% 57.1% 346.0% 56.2% 56.2% FY06 106.25 22.78 6.42 25.39 13.09 67.68 38.57 6.96 0.89 44.64 38.64 13.00 (0.79) 0.12 26.31 26.31 19.90 36.3% 6.61 FY07 264.16 31.88 14.81 46.47 33.92 127.08 % change 148.6% 40.0% 130.8% 83.0% 159.1% 87.8% Q4FY07 95.59 9.60 4.63 20.94 15.34 50.52 45.07 10.19 1.66 53.60 18.15 3.67 (0.94) 0.10 15.33 15.33 19.90 47.1% 3.85 Consolidated FY06 124.05 22.78 7.61 37.06 13.09 80.53 43.52 7.07 1.59 49.00 41.90 14.33 (0.69) 0.15 28.12 26.16 19.90 35.1% 6.57 FY07 298.12 31.88 15.12 64.06 40.97 152.04 % change 140.3% 40.0% 98.9% 72.8% 213.0% 88.8% (RsCr)

April 27, 2007 M Cap: Rs1679Cr ($409mn) Rating: Not Rated

52 wk high/low: 518/171 Target Price: Rs448

137.08 255.4% 50.10 620.3% 3.14 253.8% 184.04 312.3% 77.72 101.2% 8.83 -32.0% 0.95 -220.6% 0.84 615.2% 67.10 67.01 19.90 51.9% 16.84 155.1% 154.7%

146.09 235.7% 50.10 608.4% 3.22 101.8% 192.97 293.8% 85.21 103.4% 10.77 -24.8% 1.09 -257.6% 0.77 415.5% 72.58 71.81 19.90 49.0% 18.04 158.1% 174.5%

Avani Pramod (avani@keynoteindia.net)

(91-22-22694322-25)

Adlabs Films Ltd.

Segment-wise Revenues and Results Unconsolidated Q4FY06 Segment Revenue Film Processing and trading Theatrical Exhibition Film production and distn. Segment Results Film Processing and trading Theatrical Exhibition Film production and distn 15.07 6.18 13.09 34.33 5.03 -1.89 7.76 Q4FY07 19.89 15.69 53.20 88.77 6.14 -0.59 7.02 % change 32.0% 154.1% 306.5% 158.6% 21.9% -68.8% -9.5% FY06 FY07 % change 13.7% 168.4% 745.1% 153.9% Q4FY07 19.89 19.87 53.99 93.75 6.14 0.14 8.39 Consolidated FY06 FY07 % change 13.7% 111.9% 703.8% 141.4% 0.1% 71.7% 83.1%

66.80 25.28 15.23 107.31 27.69 0.24 9.91

75.93 67.84 128.74 272.51

66.80 41.01 17.31 125.11 27.69 5.03 7.59

75.93 86.91 139.14 301.97 27.71 8.63 13.89

27.71 0.1% 3.49 1327.5% 13.37 34.9%

Segment-wise Revenues and Results Unconsolidated Revenue Mix Film Processing and trading Theatrical Exhibition Film production and distribution Segment EBIT margins Film Processing and trading 33.4% Theatrical Exhibition -30.6% Film production and distribution 59.3% 30.9% -3.8% 13.2% 41.5% 1.0% 65.0% 36.5% 5.1% 10.4% 30.9% 0.7% 15.5% 41.5% 12.3% 43.8% 36.5% 9.9% 10.0% Q4FY06 43.9% 18.0% 38.1% Q4FY07 22.4% 17.7% 59.9% FY06 62.2% 23.6% 14.2% FY07 27.9% 24.9% 47.2% Q4FY07 21.2% 21.2% 57.6% Consolidated FY06 53.4% 32.8% 13.8% FY07 25.1% 28.8% 46.1%

Keynote Capitals Research

K E Y N O T E

Keynote Capitals Ltd. Member Stock Exchange, Mumbai (INB 230930539) National Stock Exchange of India Ltd. (INB 010930556) Over the Counter Exchange of India Ltd. (INB 200930535) Central Depository Services Ltd. (IN-DP-CDSL-152-2001)

Registered Office 4th Floor, Balmer Lawrie Building, 5, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001. Tel Nos. 022-22694322-25

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