UTV India Investment Case Summary Disney is expected to increase its bid price as Disney is holding only 54%

54% of the shareholding. UTV India is very important target for Indian growth. In one of the past deals Oracle was forced to increase its bid price for Oracle financial services For UTV India, Movie production and Gaming sector is growth area.

Diversification is the Key for the Premium valuation The main reason for Walt Disney to buy majority stake in UTV India is its diversification. The Movie production is the most profitable segment for the company. The Movie production segment contributed around 48% revenues in FY 2011 with the EBIT margin of 33%. The profit from TV rights and Music rights is the major reason for the high margin in the movie production segment. Games and Interactive segment which contributes around 12% of company revenues is the fastest growing segment.

Television Channels for different Age group UTV Action- Cable and Satellite, 15+ age group males in Hindi speaking market Bindass- Cable and Satellite, 15-34 age group in SEC A and SEC B Hindi speaking markets with 1m+ population UTV Movies- Cable and Satellite, 4+ age group in Hindi speaking market World Movies- Cable and Satellite, 25+ age group in metros excluding Chennai

Source : Crisil report

UTV is Best target for Disney

Presence and Gap TV UTV ZEE STAR SONY COLORS Strong Strong Strong Strong Strong Movies Strong Games Strong Strong Distribution Promoters Disney ZEE News Corporation Sony Pictures owns 61% Viacom

Disney Global presence

Valuation
Although UTV India trades at premium valuation compared to its peers, with sum of parts Valuation target price for UTV is around Rs 916. However with Disney holding around 50.4% of the shareholding, we believe that Disney would be forced to increase its bid price from Rs1100.

Share holding Somerset India Fund Fid Funds Mauritius Ltd Swiss Finance Corporation (Mauritius) Ltd Mathews Asian Selections Funds Plc The India Fund Inc Walt Disney Promoter group Others Total

In % 2.56 1.97 2.04 1.36 1.32 50.4 19.8 20.55 100

Disney Strategy
Disney movie offering have been weak in India as the Disney brand is considered as the kids movies producers. With the UTV strong pipeline for movie like Heroine:, Joker 3D and, Ek Main Aur Ekk Tu, Disney is likely to benefit from strong UTV movie brand. Indiagames Division will help Disney to sell its content on one of the largest mobile market. Strong Management Team - 'Ronnie' Screwvala is one of the most successful media entrepreneur and will continue to lead UTV India,

Disney past deals

Disney is following the inorganic growth strategy for the sales growth. Disney is trying to get into emerging market and new social media sectors like games. Past deals-- UTH Russia Limited On November 18, 2011, the Company acquired a 49% ownership interest in the Seven TV network from UTH Russia Limited (UTH) for $300 million. The Seven TV network will be converted to an ad-supported, free-to-air Disney Channel in Russia. Playdom

On August 27, 2010, the Company acquired Playdom, Inc. (Playdom), a company that develops online social games. Marvel On December 31, 2009, the Company completed a cash and stock acquisition for the outstanding capital stock of Marvel Entertainment, Inc. (Marvel), a character-based entertainment company. This acquisition is consistent with the Companysstrategic value creation through utilization of intellectual properties across Disneys multiple platforms and territories.

Key Risks
1. Disney does not delist UTV India. 2. Slow down in Advertising revenues due to slow economic growth