Tips Industries generated a net profit of Rs. 17.17 cr. in Q1 FY23.

Tips Industries has reported a total income of Rs. 35.2626 crores during the period ended June 2022 as compared to Rs. 35.4814 crores during March 2022 and Rs. 28.7249 crores during June 2021. The company has posted a net profit of Rs. 17.1793 crores in June 2022 as against a net profit of Rs. 15.9260 crores for the period ended March 2022 and Rs. 15.6298 crores for the period ended June 2021. The operating margin stood at 66% compared to in Q1 FY22, which was lower than the 72% in Q1 FY22. The EBITDA margins were up by 600 bps in Q1 FY23 as against Q4 FY22.

Current quarter operations:

The company released 185 new songs and 142 non-film songs, with 43 film songs under their name. The company now has a collection of around 29,000. songs across all genres and major languages. The Indian digital advertising industry stood at Rs 21,353 crore by the end of 2021, up by Rs 15,782 crore in the previous year. It has grown at a rate of 35.3%. This sustained growth can be attributed to technological advancements, improvements in data science and analytics, and the introduction of policies and regulations, among others. The highest proportion of spending on digital media is claimed by social media (29%, Rs 6,218 crore), closely followed by online video (28%, Rs 5,907 crore).  Paid search claims 23% (Rs 5,039 crore), while display banners claim 16% (Rs 3,420 crore).

By 2023, social media is expected to grow at a CAGR of 29.79%, with a spending share of 29%. On an average, Indians spend 2-3 hours on social media, which is on par with the global average. 73% of the audience belonging to the age group of 45 years to 54 years uses YouTube to watch online content. The listenership on audio streaming services grew by 40% Y-o-Y in the first half of 2020.

Valuations:

The company has reported an EPS of Rs.13.25 for the period ended June 30, 2022 as compared to Rs.12.05 for the period ended June 30, 2021. The ROCE and ROE stood at 86.5% and 63%, respectively. The stock is trading at a P/E of 26.1x, which is not expensive, and a 5 year P/E of 28.5x. TIPS industries have an EBITDA multiple of 12.2x and an interest coverage ratio of 721x. The price to book ratio is at 19.2x, which has a book value of Rs.78.8. The scrip was trading at Rs. 1525, down by 1.34% on Monday.