ITW Consulting’s operating profit for the fiscal year ended March 31, 2021 decreased 10.2% to Rs 314.5 crore from Rs 350.3 crore in the previous fiscal year. The company reported a net profit of Rs 2.8 crore for the year under review, compared to a net loss of Rs 2.2 crore in the previous year. It is relevant to note that the financial statements for year 21 are unaudited.
Founded in 2011, ITW Consulting is a global sports, media and entertainment marketing agency in the field of sports sponsorship, brand promotion and sports promotion in all its forms, including sports rights management. , management of sports celebrities and sponsorship management. The company currently has 5 subsidiaries, 3 sub-subsidiaries and 2 associated companies and the offices are located in India, United Kingdom, United Arab Emirates, Sri Lanka and Bangladesh.
ITW Mediaworx is one of the main subsidiaries of the group and is involved in media buying and planning activities, such as on-air advertisements on TV and OTT platforms. The group is also present in sports marketing consulting through its subsidiary ITW Catalyst. The company’s other subsidiaries are involved in various activities such as travel and hospitality management, music promotion, public relations and brand advertising.
In addition, the company had recently embarked on consulting various brands for booking ad slots on various OTT platforms such as Hotstar and SonyLIV.
ICRA recently upgraded ITW Consulting’s credit ratings to [ICRA]BBB (Stable) /[ICRA]A3 +. The rating upgrade takes into account the expected improvement in the company’s operating profit and operating margins as well as debt hedging measures during FY22.
While the increase in operating profit is mainly supported by the rights to the land of Rs. 152.3 crore acquired by the company in FY21 and the higher expected revenues from OTT platforms and the activities of Sports Council, improving operating margins should be supported by healthy margins generated by the sale of the rights to the Sri Lanka vs India and England series. series. Out of Rs. 152.3 crore of rights purchased by the company, Rs. 117.25 crore of rights have yet to be used.
“We are pleased with ITW’s ICRA rating amid some of the most difficult times the global sports industry has ever faced. companies beyond sports sponsorship. In addition, we are the only Indian sports and media consulting company of the future ranked by ICRA to date. It is certainly an important step in paving the way for greater acceptance of sports marketing activities, ”said ITW Consulting Managing Director Bhairav Shanth.
The ratings are also supported by ITW’s established track record in the field cricket advertising industry, the extensive experience of the promoters and ITW’s long-term relationships with various cricket boards and media entities, which helped him get repeat orders. The ratings also take into account ITW’s reputable customer profile, which includes established brands / businesses such as Pernod Ricard India, Oppo Mobiles India and Dreamplug Technologies, providing repeat orders for branded advertisements.
According to the ICRA, the ratings are limited by the sensitivity of ITW’s revenue to campaign type, event, frequency, and game teams. The ratings also note ITW’s high industry concentration, which is focused mainly on one sport, cricket. In addition, associated risks such as cancellation / postponement of matches by cricket grounds can impact the bottom line of the business.
Also, odds are limited by high total liabilities / total net worth 3.7 times in FY 2021 due to the high purchase of field rights in FY 2021 from various clubs cricket and third parties. The ratings also take into account the group’s low operating margin of 1.8% in FY2021 due to the cancellation of cricket matches in FY2021 as part of the Covid-pandemic. 19 and the low margins of its on-air advertising business. Despite an expected increase in turnover during fiscal year 2022, the Group’s operating margin should remain at moderate levels of 3.5 to 4%.
ITW’s liquidity is adequate, supported by an unencumbered cash balance of Rs. 29.5 crore as of March 31, 2021. In addition, the company has no term loans outstanding as of March 31, 2021. The company has an overdraft facility of Rs. 5 crore and bank guarantee limits of Rs. 15.0 crore for vesting, which has been little used so far. In addition, its business model allows ITW to receive advances from its customers, which supports its liquidity to some extent.
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