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HT Media - 3QFY11 Results
We upgrade HT Media from Underperform to Outperform after a
continued upturn in the ad environment, positive surprise in 3QFY11
results, encouraging trends from the latest readership survey and stable
newsprint prices. The publisher’s English newspapers registered ad
growth of 16% QoQ/25% YoY while the Hindi editions saw a 3%
QoQ/35% YoY rise. We project an average 18% earnings growth for
FY12-13 despite the challenge of higher newsprint prices and the stock
now trades at 16x forward earnings.
Upturn in ad-environment, stable newsprint prices
HT Media’s 3QFY11 revenue of Rs4.7bn, up 27% YoY, was ahead of our
expectations, led by a positive surprise in English print ad growth of 16%
QoQ and 25% YoY and Hindi ad growth at 3% QoQ and 35% YoY driven by
both volume and improved realisation. In early FY11, HT had raised ad rates
across its Hindustan Times (English) and Hindustan (Hindi) editions by 15-
35% and will again increase rates by 10-15%. However, quarterly circulation
revenue dropped 6% YoY for Hindustan Times and were flat for Hindustan to
account for 10% share of print revenue. Consolidated Ebitda margin
expanded 125bps QoQ to 19% mainly due to stable raw material costs at
35% of revenue while profit was up 23% QoQ and 34% YoY, which was also
ahead of estimates. HT internet revenue increased two times to Rs21m and
radio by 80% YoY to Rs182m - Ebitda was Rs39m with a four-city presence.
Consolidating in Mumbai, 78% holding in HMVL
In the latest readership survey by IRS for 3Q10, even as Hindustan continues
to grow Hindustan Times is also consolidating operations in Mumbai and
ramping up Mint, the business newspaper. HT maintains Hindustan Times’
No.1 position in Delhi with a significant lead in premium segments and is No.2
in Mumbai. Also HT’s key competitor DNA in Mumbai still has no firm plans for
an edition launch in Delhi. Meanwhile, HT with a 78% holding in Hindustan
Media Ventures also offers exposure to the fast-growing Hindi business.
Hindustan is the third-largest and fastest-growing national Hindi daily.
However, Hindustan is facing increasing competition mainly in Jharkhand and
Bihar following the launch of Dainik Bhaskar by DB Corp
Earnings upgrade; raise to O-PF.
With a continued upturn in the ad environment and the company
consolidating market positioning, including in Mumbai for Hindustan Times
and Mint as well as strength of Hindustan, we upgrade HT’s consolidated
earnings by 4-6% for FY12-13CL. Although newsprint prices at
Rs30,900/tonne are still high and we remain negative on HT’s radio business,
the company may bid for more stations in upcoming phase III of licensing. HT
is net cash at Rs3bn and, after our upgrade, we now project an average 18%
earnings growth over FY12-13. With the stock trading at 16x forward
earnings, we upgrade from Underperform to Outperform.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
HT Media - 3QFY11 Results
We upgrade HT Media from Underperform to Outperform after a
continued upturn in the ad environment, positive surprise in 3QFY11
results, encouraging trends from the latest readership survey and stable
newsprint prices. The publisher’s English newspapers registered ad
growth of 16% QoQ/25% YoY while the Hindi editions saw a 3%
QoQ/35% YoY rise. We project an average 18% earnings growth for
FY12-13 despite the challenge of higher newsprint prices and the stock
now trades at 16x forward earnings.
Upturn in ad-environment, stable newsprint prices
HT Media’s 3QFY11 revenue of Rs4.7bn, up 27% YoY, was ahead of our
expectations, led by a positive surprise in English print ad growth of 16%
QoQ and 25% YoY and Hindi ad growth at 3% QoQ and 35% YoY driven by
both volume and improved realisation. In early FY11, HT had raised ad rates
across its Hindustan Times (English) and Hindustan (Hindi) editions by 15-
35% and will again increase rates by 10-15%. However, quarterly circulation
revenue dropped 6% YoY for Hindustan Times and were flat for Hindustan to
account for 10% share of print revenue. Consolidated Ebitda margin
expanded 125bps QoQ to 19% mainly due to stable raw material costs at
35% of revenue while profit was up 23% QoQ and 34% YoY, which was also
ahead of estimates. HT internet revenue increased two times to Rs21m and
radio by 80% YoY to Rs182m - Ebitda was Rs39m with a four-city presence.
Consolidating in Mumbai, 78% holding in HMVL
In the latest readership survey by IRS for 3Q10, even as Hindustan continues
to grow Hindustan Times is also consolidating operations in Mumbai and
ramping up Mint, the business newspaper. HT maintains Hindustan Times’
No.1 position in Delhi with a significant lead in premium segments and is No.2
in Mumbai. Also HT’s key competitor DNA in Mumbai still has no firm plans for
an edition launch in Delhi. Meanwhile, HT with a 78% holding in Hindustan
Media Ventures also offers exposure to the fast-growing Hindi business.
Hindustan is the third-largest and fastest-growing national Hindi daily.
However, Hindustan is facing increasing competition mainly in Jharkhand and
Bihar following the launch of Dainik Bhaskar by DB Corp
Earnings upgrade; raise to O-PF.
With a continued upturn in the ad environment and the company
consolidating market positioning, including in Mumbai for Hindustan Times
and Mint as well as strength of Hindustan, we upgrade HT’s consolidated
earnings by 4-6% for FY12-13CL. Although newsprint prices at
Rs30,900/tonne are still high and we remain negative on HT’s radio business,
the company may bid for more stations in upcoming phase III of licensing. HT
is net cash at Rs3bn and, after our upgrade, we now project an average 18%
earnings growth over FY12-13. With the stock trading at 16x forward
earnings, we upgrade from Underperform to Outperform.
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