Cellcast Share Discussion Threads

[trent harris] 23/7/2010 16:09

Yeah, there's simply no stock out there and the mms are down to their last few at 6p before the next step up

I'm in for 25p a share in response to the associate company results in February.

We have a solid seven month 4-bagger from this point on, imo

Maybe it could be an 8-bagger from here if CAH year on year revenue growth stands at 100%, which it could do, considering it was 400% in 2009

[topgunns] 23/7/2010 16:04

This is the bull run to new highs

[davydoo] 23/7/2010 15:27

i bought another 20k today (up to 80k total) small beans i know compared to others here, but glad of the chance to buy back in below 6p

[lyonst5] 23/7/2010 15:00

I'll second that Lufc5.

T.A they should give you a seat on the board and make you in charge of PR and IR.

[lufc5] 23/7/2010 14:54

T.A
Thanks for all your informative postings.

Lufc5

[watchout2] 23/7/2010 14:47

Yeah got the 50k back, the difference pays for the weekend :-))

You just know that Cah update is going to hit the market any time
soon so want a decent amount before it happens.

[topgunns] 23/7/2010 14:45

The usual spike up spike down just changed character. New highs soon i think.

[watchout2] 23/7/2010 14:18

Lyon.

I agree, they have been shaking on whatever sales they can get.

Will buy back the 50k.

[lyonst5] 23/7/2010 14:13

Just noticed in passing, the limit to buy is down to only 5k at full offer, Watchout, you'd be lucky if you could get back that 100k back for 6p

[the analyst] 22/7/2010 15:23

So, I think we are getting close to being able to put a realistic valuation on CAH.

We can see that half decent TV and media companies can easily trade on a PE of 30x or more on the indian markets. I think the growth at CAH would put them into that bracket, or maybe even higher

Also, we can see that argument for continued growth throughout both 2010 and 2011 are strong, given the points listed in post 3191

On a PE of 30x (reasonable, given the growth rate), the CAH profit in 2009 would equate to 18p per share for Cellcast's stake

So, let's say that the growth continues, but the rate falls from 400% in 2009 to 60% during 2010 and then that drops again to 30% in 2011. A pessimistic view, but you would still be looking at a valuation of over 36p per share for our stake in CAH in 2 years time, or 24p if you drop the PE down to a more conservative 20x

But what if the growth in profit was maintained at 80% in 2010, then drops to 50% in 2011? Then, you would be looking at 50p per share. Too fanciful? ... who knows, but it is possible, imo

The next update on the KPIs at CAH will help in letting us know if any of those growth scenarios are possible (as I and a few others here seem to think), or if they are totally pie in the sky (as bbw and cr seem to be suggesting).

When it comes to the figures, it will be the year on year percentage increases that will be crucial, rather than absolute numbers - this is due to the seasonal nature of the business (business down during the IPL, better during winter months, when people tend to have more nights in etc)

Best thing, imo, is to wait for the KPIs before getting too excited, though...

[rb1206] 22/7/2010 14:47

bbw : Its 17000 calls per night not per Month as in TA post 3189 from that article also here is below from same article, ESPECIALLY THE LAST LINE.


The makers
"Ten per cent of the total viewership is interested in interactive television," says Cellcast's executive vice president Pradeep Menon. On an average, at least one person wins one contest. On a good day, one show can have as many as four winners. The virtual waiting lounge, as Pradeep shows us at the Cellcast office, is a box-sized room buzzing with telephone lines. Currently, the holder capacity is 10,000. "We are increasing it because it's IPL season and we are introducing interactive cricket shows," he reveals. The channel sells air-time to Cellcast, the show's content provider, which in turn make its cut from cell phone companies who make a killing each time a caller uses his mobile phone to dial up. "We receive our share after 120 days because the revenue goes directly to the cell phone company. They take 50 to 60 per cent of the profit. We get the rest," Pradeep says. Only calls made from mobile phones are eligible, at the cost of Rs 12 a minute. At nearly 17,000 calls PER NIGHT, THE PROFIT MARGIN IS OBSCENE.

[the analyst] 22/7/2010 14:38

Perhaps more relevant, the PE ratios of some media (TV) shares on the Indian markets:

Zee Entertainment - 28.8x

Sun TV - 30.7x

TV Today Network - 17.6x

Entertainment Network - 53.6x

Balaji TV - 38.21x

HT Media - 23.8x

I've skipped anomalies, like the ones not making profit (no PE), but it gives an idea of the sort of rating you might expect, were CAH listed on the Indian stock market

[watchout2] 22/7/2010 14:31

TA.

You keep posting what you want son :-))

[the analyst] 22/7/2010 14:26

Indian companies (NSE) with an average PE of 21x, plenty of them trading on 30x+ and presumably those are the growth companies



More of them (BSE), these with an average PE of 22x (ranging from 6.6x to 41.5x)

[the analyst] 22/7/2010 13:21

lol, I've been ignoring the research in Cellcast for a while, so spending a couple of hours today catching up with things

I promise I won't post any more cut and paste indian mobile growth numbers!

The next thing is to find PE ratios in India.

I can see that their market as a whole trades somewhere around 17x earnings, but it's the tech companies, the growth companies and the ratings of newly listed companies that is relevant... but difficult to find information on...

[burgerbarwomen] 22/7/2010 13:16

Someone ate three Shredded Wheat today!

[the analyst] 22/7/2010 13:12

Indian 3G market has potential for 80 million subscribers within three years of launch, say Frost & Sullivan




USA-based research firm Frost & Sullivan (F&S) expects that the Indian 3G market will have the potential for 80 million subscribers within three years of services being launched.
However, the research firm adds that the key to making 3G services have an impact, and for 3G to be adopted by 80 million subscribers will be to generate revenue from advanced services such as mobile data, video and other transformative offerings.
F&S states that after having paid close to $16 billion (about Rs 75,600 crore) in license fees, the telecom industry in India will need to invest a further $6 to $8 billion (approximately between Rs 28,000 crore and Rs 37,800 crore) in capital expenditure to roll out 3G services.
Jayesh Easwaramony, director, ICT practice, Frost & Sullivan, Asia Pacific, said, "Worldwide, we are in phase two of 3G, where the technology is mature, cost per bit has come down, and the smartphone revolution has increased the data revenues of operators globally."
He added that, "India is entering phase two of its 3G market evolution, where it is moving from the subscriber acquisition to subscriber retention mode. The combination of these two phases means that Indian operators would do in the next ten months what the world did over ten years. They have to make the data strategy work by combining operational best practices and India-specific innovation to justify the business case."
The challenges, observes the company, exist in two areas for mobile network operators. First is to support both increased subscriber numbers and the explosion in new services, which will require them to upgrade their core infrastructure to suit the industry's new architectural framework for delivering internet protocol (IP) multimedia services over mobile networks.
Secondly, mobile network operators need to respond to the demand for rich multimedia content and exploit emerging business opportunities associated with it.

[the analyst] 22/7/2010 13:10

3G users in India to reach 30 Million by 2012, say Ernst and Young



New Delhi: Indian telecom market is expected to grow further as a new report on Indian telecom sector by Ernst and Young find that the 3G subscriber base in India would reach at about 25 to 30 million and 3G revenue would grow around $4 to $5 billion by 2012. The total telecom subscriber base is likely to reach approximately 690 million to 700 million by 2012 including about 640 million to 650 million wireless users and approximately 45 million to 50 million fixed line users.

The report titled 'India Telecom 2012 Study' also finds that the number of telecom operators in each circle would go up to 10 or 12 with the allotment of new licenses. Though the number may come down to four or five in each circle by 2012, around 60 percent of the subscribers would come from circle B and C.

The competition in the Indian telecom market is expected to increase with Telecom Regulatory Authority of India (Trai) recommending Mobile Virtual Network Operator (MVNO). According to the report the WiMax would have about 8 to 10 million subscribers and could account for about 1 to 1.5 billion by 2012. The report mentioned that Mobile Number Portability (MNP) will have to be spread across the country and porting of numbers has to be made affordable, for the success of the system in India.

The Average Revenue Per User (Arpu) is likely to stabilize over the next two years. Blended Arpus is expected to stabilize at Rs 150 to Rs 155 by 2010, while Minutes of Usage (MOU) per subscriber per month would stabilize at approximately 520 minutes to 530 minutes per subscriber in 2011.

The report predicts a data revolution as a result of the launch of 3G and WiMax services, and by 2012 these services are expected to gain popularity initially in the top cities and gradually penetrate to the rest of the country.

[the analyst] 22/7/2010 13:10

The number of 3G mobile subscribers in India is expected to grow at a CAGR of around 130% during 2010-2013, says RNCOS.



"The future prospects of the Indian 3G market primarily depend on the government's decision to auction 3G frequencies. According to our recent research report "Indian 3G Mobile Forecast to 2012", only two state-owned telecom companies are currently allowed to rollout 3G services in the country, while the remaining operators will be issued 3G spectrum via auction. Our report has found that the country will witness substantial amount of investments in 3G deployments and upgradation of the existing telecom infrastructure with the finishing of auction process.

We have studied the Indian 3G market in terms of subscribers and forecasted the number of subscribers for various segments like mobile, Internet and broadband. The Indian 3G market future has been analyzed in terms of technology, region and devices. In the devices segment, our report has given forecast for the sales of 3G enabled handsets and modems. We have also found that the mobile penetration in urban areas rose to around 95% in 2009, while it stood at less than 20% in rural areas.

We have also studied the players which are expected to roll out 3G services after the spectrum auction. Our report presents a comprehensive analysis of all the leading players in the Indian telecom market. In order to analyze them, our analysts have considered the strengths and weaknesses of individual players and their current strategies. The report gives information about the government initiatives and regulatory framework to drive the 3G market. This section provides all the details required for entering in the Indian 3G market.

"Indian 3G Mobile Forecast to 2012" is a comprehensive research report that comprises quality research and in-depth analysis of the Indian 3G Industry. It studies the emerging market trends, recent developments and their impact on the market. The report will help clients to analyze the leading-edge opportunities, prospective customer base, expected future outlook and all other factors boosting the Indian 3G segment."

[the analyst] 22/7/2010 13:08

It is possible that the chap was talking about historic trading figures, rather than specifically about the month of March

If it was March he was referring to, though, then that could be a very good rate of calls, considering the known negative effect that the IPL has during that month

[burgerbarwomen] 22/7/2010 12:55

The interview is dated 28th March - the guy mentioned 17k calls a month.

Any chump with a calc can do the same maths I did.

[the analyst] 22/7/2010 12:51

Does anyone know what PE high growth Indian technology companies trade on?

I'm trying to find out in order to try to put a valuation on CAH, but it's quite tricky to get the information.

Obviously it makes a big difference for a valuation, depending on whether the profitable, high growth companies tend to trade on 10x, 20x or 40x operating profit in India. Especially the rating of high growth, profitable technology companies taking up a new listing on the market...

[the analyst] 22/7/2010 12:47

CAH have also mentioned the potential of entering into new geographical areas within Asia

With a strong management team in place and the advantage of the know-how already, such a move would be likely to prove successful, imo

It may be that they use the prospect of geographical expansion at the 'future growth carrot' to waive at investors when they plan their exit - that could be through a sale of the company or perhaps, via a public listing

[the analyst] 22/7/2010 12:45

With regards to the possibility of going ex-growth anytime soon, I don't see that happening. Growth is coming from too many different areas for that to happen, imo, including the following:

1) Mobile penetration in India had in excess of 530 million subscribers at the end of 2009 and with over 10 million new subscribers being added every month. Mobile penetration is expected to reach 745 million by the end of 2010

2) The Indian economy is still growing fast, even during the 'world recession'

3) Increasing public awareness of the concept of participation TV

4) Cellcast have introduced new formats, programs and brokered new deals with broadcasters over the last six months.

5) The rollout of their new billing solutions is increasing the yield on existing programming

6) Planned increased distribution on the national DTH platform and greater penetration in regional markets as Hindi production expands into local languages such as Urdu and Tamil during 2010

The result is likely to be compound growth imo, and they have stated the following as recently as last month:

"CAH is well positioned for significant growth as sector leader in a market that continues to expand rapidly....there should be continued organic growth in the yield from CAH's existing output and a larger audience for new format"