Dear All,
Forwarding you the Result Update on HT Media for 1QFY2012 with an Accumulate recommendation and a Target Price of `177 (12 months).
Strong top-line growth led by ad revenue growth yoy: For 1QFY2012, HT Media reported a good performance on the revenue as well as the profitability front. The company’s top line grew by 22.7% yoy to `494cr. Recurring earnings grew by robust 34.4% yoy on account of high other income and a significant decrease in tax rate. Key highlights for the quarter include – 1) overall growth of ~17% yoy in advertising revenue, driven by ~18% yoy growth in English and ~15% yoy growth in Hindi; however, sequentially, advertising revenue growth in English was flat (up by only ~1.5%), while advertising revenue in Hindi grew by ~18% qoq, 2) a ~3.5% yoy/qoq increase in circulation revenue, 3) a ~75% yoy jump and a ~17% qoq decline in radio revenue and 4) 174bp yoy OPM contraction due to 253bp yoy gross margin contraction.
Outlook and valuation: HTML posted impressive ad revenue, on the back of improved ad-revenue yields. We estimate such growth in ad revenue to sustain, with the English publications (HT and Mint) and HMVL posting CAGRs of 11.4% and 17.9% over FY2011–13, respectively. Aggressive cost rationalisation in the radio business (continues to be EBITDA positive and posted EBIT profit of ~`2.6cr), trickle-down effect of higher revenue traction and cooling of newsprint prices from their peak (factoring in a CAGR of ~15% during FY2011–13E) will help HTML post margins of ~18% during FY2012–13. At the CMP of `160, HTML is trading at 17.0x FY2013E consolidated EPS of `9.8. Owing to a significant improvement in the profitability of its growing businesses and incremental revenue traction on the back of improvement in advertising revenue and pricing across all geographies, we maintain our Accumulate rating on the stock with a target price of `177, based on 18x FY2013E earnings.
Kindly click on the following link to view the Report.
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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