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华尔街日报Network18 Media & Investments (NSE:NETWORK18) Is Making Moderate Use Of Debt
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. As with many other companies Network18 Media & Investments Limited (NSE:NETWORK18) makes use of debt. But is this debt a concern to shareholders?
When Is Debt Dangerous?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. If things get really bad, the lenders can take control of the business. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first step when considering a company's debt levels is to consider its cash and debt together.
What Is Network18 Media & Investments's Net Debt?
As you can see below, Network18 Media & Investments had ₹30.3b of debt at September 2025, down from ₹84.7b a year prior. However, it also had ₹1.19b in cash, and so its net debt is ₹29.1b.
How Strong Is Network18 Media & Investments' Balance Sheet?
The latest balance sheet data shows that Network18 Media & Investments had liabilities of ₹36.4b due within a year, and liabilities of ₹2.54b falling due after that. Offsetting this, it had ₹1.19b in cash and ₹6.98b in receivables that were due within 12 months. So it has liabilities totalling ₹30.8b more than its cash and near-term receivables, combined.
While this might seem like a lot, it is not so bad since Network18 Media & Investments has a market capitalization of ₹65.0b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Network18 Media & Investments will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
Check out our latest analysis for Network18 Media & Investments
In the last year Network18 Media & Investments had a loss before interest and tax, and actually shrunk its revenue by 68%, to ₹29b. To be frank that doesn't bode well.
Caveat Emptor
Not only did Network18 Media & Investments's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). To be specific the EBIT loss came in at ₹1.6b. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled ₹5.9b in negative free cash flow over the last twelve months. So suffice it to say we consider the stock very risky. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. These risks can be hard to spot. Every company has them, and we've spotted 2 warning signs for Network18 Media & Investments you should know about.
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
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