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1 | P A G E

SECTOR: ENTERTAINMENT REPORTING DATE: 26TH NOVEMBER ‘2017

DEN NETWORKS LTD www.dennetworks.com

Den Networks Ltd NSE Code - DEN TABLE 1 - MARKET DATA (STANDALONE) (AS ON 22ND NOVEMBER 2017)

Sector - Entertainment NSE Market Price (`) 89.65 NSE Market Cap. (₹ Cr.) 1,767.86

Face Value (`) 10.00 Equity (` Cr.) 195.78

Business Group – N.A. 52 week High/Low (₹) 105.00/59.60 Net worth (₹ Cr.)* 803.90

Year of Incorporation - 2007 TTM P/E (TTM) N.A. Traded Volume (Shares) 3,79,293

TTM P/BV 2.20 Traded Volume (lacs) 340.04

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. - Not Applicable,* As on 30th Sept’ 2017

236, Okhla Industrial Estate, COMPANY BACKGROUND

Phase III, New Delhi – 110 020 DEN Networks Limited is a cable television company. The Company is engaged in

distribution of television channels through analog and digital cable distribution network,

and provision of broadband service. Its segments include Cable, which consists of

distribution and promotion of television channels and Broadband, which consists of

providing Internet services. Its geographical segments include within India and overseas.

The Company's products and services include cable television, such as DEN Digi View, DEN

DigiI View HD, personalized customer care and DEN Excite! Value Added Services, and

broadband, such as DEN Boomband. DEN Digi View is a digital cable service with all

channels in digital versatile disc (DVD) like picture and stereophonic sound. DEN DigiI View

HD is a high definition cable service with 1080i video resolution and Dolby Digital. Its DEN

Excite! Value Added Services include multi-genre digital music service. blog.telly, City Bytes

and events search guide, and games.

Company Website:

www.dennetworks.com

Revenue and Profit Performance

The revenue of the Company increased from ₹ 231.61 crores

to ₹ 270.88 crores from quarter ending Sep’16 to quarter

ending Sep’17. The Company made a loss of ₹ 6.54 crores in

quarter ending Sep’17 vis-a-vis making a loss of ₹ 65.34

crores in quarter ending Sep’16.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Den Networks Ltd 7.11% -3.46% 1.59% 39.42%

Nifty 0.25% 4.75% 8.82% 26.31%

NIFTY MEDIA 3.16% 9.78% 7.00% 23.30%

Source - Capitaline/NSE

0.80

1.00

1.20

1.40

1.60

Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17

Den Networks Ltd NIFTY NIFTY MEDIA

270.88 265.71231.61

-6.54

-61.99 -65.34

-100

0

100

200

300

Sep'17 Mar'17 Sep'16

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.dennetworks.com/



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TABLE 3 - FINANCIALS

(₹ Cr.) Sep’17 Mar’17 Sep’16 % Change

Sep ’17 vs Mar’17 Mar’17 vs Sep’16

Net Worth 803.90 832.98 1,114.95 -3.49% -25.29%

Current Assets 977.75 904.44 1,035.05 8.11% -12.62%

Non-Current Assets 1,274.41 1,306.19 2,017.71 -2.43% -35.26%

Total Assets 2,252.16 2,210.63 3,052.76 1.88% -27.59%

Investments 403.97 398.62 89.08 1.34% 347.49%

Finance Cost 15.57 7.85 12.60 98.34% -37.70%

Long Term Liabilities 550.12 509.17 639.84 8.04% -20.42%

Current Liabilities 898.14 868.48 1,201.88 3.42% -27.74%

Turnover 270.88 265.71 227.19 1.95% 16.95%

Profit After Tax -6.54 -61.99 -65.34 N.A. N.A.

EPS (₹) -0.33 -3.19 -3.70 N.A. N.A.

Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications: The Auditors have not made any qualification in the last 3 years viz. FY 2016-17, FY 2015-16 & FY 2014-15.

However, Auditors have drawn attention on certain matters under heading emphasis of matters in FY 2014-15 (AR 2014-15 page

55) & FY 2015-16 (AR 2015-16 page 56).

Management Response (As stated by the Company): “The Board has duly examined the Report issued by the Statutory

Auditors’ of the Company on the Accounts for the financial year ended March 31, 2016. The notes to the financ ial statements, as

presented in this Annual Report, are self-explanatory in this regard and hence do not call for any further clarification. The

Auditors’ Report does not contain any qualification, adverse remark.”

Response Comment

Frequency of Qualifications Not Applicable

Have the auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited

financial statements? No -

TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT - FY 2016-17)

Regulatory Norms Company

% of Independent Directors on the Board 50% 50%

% of Promoter Directors on the Board - 17%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 63.41%

Composition of Board: As per Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 "Listing Regulations, 2015", the Company should have at least 50% Independent Directors as the Chairman of the Board is

a Promoter Executive Director. The Company as on 31st March, 2017 has 50% of Independent Directors and hence, it meets the

regulatory requirements.

Board Diversity: The Company has 6 directors out of which 5 are male and 1 is female.

Holding of position of MD/ CEO & Chairman by same person: The Company has appointed Mr. Sameer Manchanda as the

Chairman and Managing Director of the Company. Appointment of a single person as the Chairman and Managing Director of

the Company is not a good governance practice as this may lead to concentration of power in a single person.




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TABLE 5 - FINANCIAL RATIOS

Ratios Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Turn

ove

r

Rat

ios

Inventory Turnover N.A. N.A. N.A. N.A. N.A.

Debtors Turnover 0.69 0.84 0.53 -17.33% 59.55%

Fixed asset Turnover 0.21 0.20 0.11 4.49% 80.66%

Current Asset Turnover 0.28 0.29 0.22 -5.70% 33.84%

Ret

urn

Rat

ios

Operating Profit Margin 14.22% 6.39% -0.77% 122.66% N.A.

Net Profit Margin -2.41% -23.33% -28.76% N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital

Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 1.09 1.04 0.86 4.54% 20.93%

Quick Ratio 1.09 1.04 0.86 4.54% 20.93%

Cash Ratio 0.65 0.68 0.50 -3.39% 34.88%

Working Capital

Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio 0.76 0.36 0.26 109.65% 37.30%

Interest Coverage Ratio 2.47 2.16 N.A. 14.44% N.A.

Trad

ing

Rat

ios

Market Cap / Sales 6.49 6.04 5.63 7.41% 7.31%

Market Cap/ Net Worth 2.19 1.93 1.15 13.46% 67.98%

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA 45.62 94.56 N.A. -51.76% N.A.

Source - Money Control/Stock exchange filing

TABLE 6 - TRADING VOLUME

Particulars Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Trading Volume (shares) (avg. of 1 qtr) 2,94,977 2,51,551 1,56,349 521.00% 60.89%

Trading Volume (shares) (high in 1 qtr) 41,70,542 23,60,802 18,27,324 706.10% 29.19%

Trading Volume (shares) (low in 1 qtr) 12,449 28,113 10,294 -55.72% 173.10%

Ratio - High/low trading volume 335.01 83.98 177.51 1720.37% -52.69%

Ratio - High/average trading volume 14.14 9.38 11.69 29.81% -19.70%

Source - Capitaline




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TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Sep-17 Mar-17 Sep-16 Comments

Shar

eho

ldin

g (%

)

Promoter

shareholding 36.45 36.78 40.04

• The Company issued 1,58,26,039 shares to

affiliates of the Goldman Sachs Group Inc. and

17,50,000 equity shares to eligible employees

under ESOP scheme.

• The promoter shareholding decreased from

40.04% to 36.45% during 1st Oct’ 16 to 30th Sep’

17 due to issue of securities to non-promoters.

• The shareholding of public institution increased

from 45.09% to 47.39% and that of public

others increased from 14.87% to 15.93% during

the same period.

• The promoters have pledged 11.49% of their

shareholding.

Public - Institutional


Public - Others


Non-Promoter Non-

Public Shareholding 0.23 0.00 0.00

Source - NSE

MAJOR SHAREHOLDERS (AS ON 30TH SEPTEMBER 2017)

S. No. Promoters Shareholding S. No. Public Shareholders Shareholding

1 Sameer Manchanda 23.83%

1 Broad Street Investments (Singapore)

Pte. Ltd 21.37%

2 Lucid Systems Pvt. Ltd. 8.17%

2

Standard Chartered Il And FS Asia

Infrastructure Growth Fund Company

Pte Ltd

2.98%

3 Verve Engineering Pvt. Ltd. 2.31% 3 Acacia Partners, LP 2.26%

Source - NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares in FY 2016-17.

Preferential issue to promoters No preferential issue of shares was made to the promoters in FY 2016-17.

Preferential issue to others Issued of 1,58,26,039 shares to affiliates of the Goldman Sachs Group Inc. on

preferential basis during FY 2016-17

GDRs issued by the Company The Company did not issue any GDRs during last one year

Issue of shares other than Preferential

allotment No

Source - Annual Report FY 16-17

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Cable Distribution Services 91.62%

Source - Annual Report FY 16-17




5 | P A G E



Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



7 | P A G E



𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




8 | P A G E



DISCLAIMER

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Research Analyst: Kirti Dhokiya


mailto:[email protected]

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http://www.sesgovernance.com/

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