Kohinoor Broadcasting

*KOHINOOR BROADCASTING CORPORATION LIMITED*

*BSE Code: 531336*

*Book Value: Rs.15.95*

*Market Cap: Rs.104.14 Cr*

*Face Value: Rs.10*

*Market Performance: Out-performer*

*Target: Rs.70--Rs.80 in 12 -18 months time frame*
**

*Introduction: Kohinoor Broadcasting Corporation Ltd was incorporated by a
group of professionals with Mr. Harjinder Singh and Mr. Mangal Singh as key
promoters of the Company since its incorporation on 11 October 1994. During
2003 the Board decided to establish facilities for production of
advertisements, TV programmes music programmes and certain other
entertainment related activities. The Company is currently engaged in the
media and entertainment industry with a particular focus on the TV sector or
Visual Media *

*The Company has diversified in the production of TV programmes including
current affairs, music, serialised drama and other entertainment
programmes.The Company has got approval from Ministry of Broadcasting for
setting up earth station for up-linking the television channels. The Company
is setting up earth station and news studios at Rajpura and remote studios
in India at Delhi, Mumbai, Calcutta, Chennai and Jammu and outside India at
Dubai and London. In this regard, the designs have been finalised and the
equipment has been brought. The consultants have been appointed and they are
sourcing the space at the locations.*

*The Company shall also set up fifteen mobile studios for better coverage of
the events, which would be moving from one part to another. It is proposed
that each region shall have three mobile studios to cover on the spot. *

*Besides, the Company would have six mini vans cum mobile studio to cover
offices of the Chief Ministers of Punjab, Haryana, Himachal, Jammu & Kashmir
and Delhi in the first stage. The equipments have been identified. The
orders shall be placed in due course. The supply period is three months. *

*Shareholding Pattern: The promoter holding is at present very less and is
more or less managed by the Board of Directors like may other established
companies, who are doing well. But due to the high prospects of the company
going forward, the promoters are proposing to increase their stake through
private placements. The company has already informed about its desire to
offer, issue and allot up to 100,000,000 Equity Shares of Rs 10/- each on
private placement basis in one or more trenches to person resident outside
India, by way of Global Depository Receipts/American Depository Receipts or
Foreign Currency Convertible Bonds on such terms and conditions as may be
fixed by the Directors of the Company, subject to necessary provisions &
approvals. This is a very positive news on the company, since if a company
did not have fundamentals then it shoud not have gone for GDRs.*

*Financials: The company came out with excellent consolidated results (the
results including its overseas subsidiaries in Dubai and UK) for the
December, 2007 quarter
Though the total income of the Company in Q3FY08, remained flat to
Rs.52.05lakhs against
Rs.59.62 Cr in the same period previous year, but PBDT (Profit before tax
and depreciation) jumped to Rs.6.02 Cr as against Rs.1.09 Cr in the same
period previous year. For the nine months ended 31st December, 2008, the
PBDT came out to be Rs.12.40 Cr as against Rs.3.04 Cr in the same period
previous year. *
*For the Q3FY08, the Net Profits of the company zoomed to Rs.5.46 Cr against
Rs.76 lakhs in the same period previous year. The EPS for the Q3FY08 is
Rs.6.21 against Rs.2.33 in Q3FY07. This is remarkable considering that the
company had an EPS of only Rs.2.22 in FY07. *

*Triggers:*

*1. The company has received the equipment for Teleport to be set up at
Rajpura involving a capital outlay of Rs.5 Cr.*

*2. The company has placed the orders for play-out station to be set up at
Rajpura involving a capital outlay of Rs.10 Cr.*

*3. The company is in the process of making large scale recruitments of
manpower approx. 60 people for the production of content for its
entertainment channel. *

*4. The company has started producing buffer content for its forthcoming
News and Entertainment Channels.*

*5. The Company is coming up with 4 (four) New Channels which are as
follows:*

*a) KBC News--The popular Hindi New Channel*

*b)KBC Plus---The popular Entertainment Channel*

*c)KBC Gold--The popular Hindi/English/Regional Movie Channel and*

*v) KBC Profit--The popular Business Channel like NDTV Profit. *

*6.The company in principle has taken over M/S Tagore Theatres Ltd, a
multiplex valued at Rs.100 Cr. The company has appointed reputed agencies to
decide the Swap ratio for the proposed take over. *

*7. The company is opening new subsidiaries in Japan, Singapore and the USA.
The top company's officials were in the USA last month to finalise a deal
there. *

*8. The Company is likely to benefit from the DTH and CAS, which is bringing
a revolution in the media sector as a whole. *

*9. The promoters of the company are expected to increase their stake in the
company through a private placement, if the sources are to be believed. The
company has already announced that it will be conducting an EGM on 4 th
March, 2008, to offer, issue and allot up to 100,000,000 Equity Shares of Rs
10/- each on private placement basis in one or more trenches to person
resident outside India, by way of Global Depository Receipts/American
Depository Receipts or Foreign Currency Convertible Bonds on such terms and
conditions as may be fixed by the Directors of the Company, subject to
necessary provisions & approvals.*

*10. The Company proposes to invest an aggregate sum not exceeding Rs 200
Crores, in the equity shares of the Wholly Owned Subsidiaries (WOS) of the
Company viz. Kohinoor Broadcasting Corporation FZE and other subsidiaries to
be incorporated world wide notwithstanding that Such investment together
with the investment in all other bodies corporate may exceed 60% of the paid
up capital and free reserves or 100% of its free reserves whichever is more,
subject to necessary provisions & approvals. HENCE THE MEETING OF 4TH MARCH,
2008 IS VERY IMPORTANT. *

*Conclusion: Considering all the points mentioned above including the last
quarter EPS of Rs.6.21, it has been found that the scrip of Kohinoor
Broadcasting Corporation Ltd is highly undervalued and could purchased at
the CMP of Rs.8.98 for a target of Rs.70-Rs.80 in 12 to 18 months time
frame. But if the company is able to lauch its new Channels a little early
than the proposed dates and is able to open its overseas subsidiaries within
a short time, then the scrip could cross Rs.100--Rs.120 in the stipulated
time. This is a hidden gem in the media sector and a turnaround case like
Ispat Industries Ltd*