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HT Media -Impressive growth…
HT Media reported its Q3FY11 results above our expectations. The
topline stood at | 465.1 crore against our expectation of | 442.4 crore,
primarily on the back of higher-than-expected growth in English ad
revenues (24.7% YoY) led by the festive season. Also, the Hindi business
grew a robust 35% YoY. EBITDA margin contracted 136 bps YoY due to
inclusion of Bruda’s financials in this quarter. Nonetheless, on a QoQ
basis, the margin expanded 125 bps led by robust advertisement
growth in both the print and radio segment. The company reported a
PAT of | 47.8 crore against our expectation of | 33.6 crore primarily due
to robust revenue growth.
ƒ Highlights for the quarter
HT Media reported better-than-expected ad revenue growth with the
English segment growing 24.7% YoY to | 275.4 crore from | 220.8
crore and Hindi ad revenue growing 35.0% YoY to | 94.5 crore from
| 70.0 crore. Also, the radio segment reported impressive growth of
79.0% YoY to | 18.2 crore.
Circulation revenue, however, declined 2.0% YoY to | 47.1 crore
from | 48.1 crore even on the back of ~24.5% increase in number of
copies circulated due to lower realisation owing to intense
competition in Mumbai, Bihar and Jharkhand.
The company commissioned its new printing press in Gorakhpur,
UP. Hindustan would have a print run of 1.1 lakh copies from this
location.
Valuation
At the CMP of | 143, HT Media is trading at 20.1x FY11E EPS of | 7.1 and
14.4x FY12E EPS of | 9.9. We have assigned a 10% discount to market
leader Jagran Prakashan, which we value at 19x FY12 EPS. We have
valued the stock at 17.1x FY12 EPS to arrive at a target price of | 170. This
implies an upside of 19%. We maintain our view on the stock as BUY.
Result Analysis
ƒ Newsprint cost well managed
The company managed its newsprint prices very efficiently in a
scenario of increasing circulation on the back of intense competition
(distribution of free copies). Average newsprint prices stood at |
30,900 per tonne as compared to ~| 30,000 per tonne in Q2FY11.
Average newsprint prices for the Hindi business stood at | 29,000
per tonne. We expect the average newsprint cost for the company
to be at ~| 30,800 for FY11E and | 32,000 for FY12E
ƒ Circulation revenues decline YoY
The company has consolidated its position in its key markets. Also,
higher number of supplement copies is being given coupled with a
reduction in cover price for Hindustan in Bihar and Jharkhand to
attract new readers. Circulation revenues declined 2.0% YoY to |
47.1 crore from | 48.1 crore even on the back of ~24.5% increase in
number of copies circulated due to lower realisation owing to
intense competition.
ƒ Margins impressive
The company reported an EBITDA margin of 19.0%, improving 125
bps QoQ and declining 136 bps YoY. However, this is not
comparable on a YoY basis as Q3FY10 numbers do not include
financials of the Bruda JV. Overall margins were impressive led by
robust growth in print ad revenue in advertisement revenue.
PAT margins stood at 10.1% as compared to 8.6% in Q2FY11 and
9.7% in Q3FY10. Margins improved primarily due to robust revenue
growth.
ƒ Other vertical growth on track
The radio segment reported net revenues of | 18.2 crore, which
grew 79.0% YoY and 28.9% QoQ. The radio segment posted a
positive EBITDA of | 3.9 crore as compared to | 1.6 crore in Q2FY11
and EBITDA loss of | 0.1 crore in Q3FY10. The company maintained
its No. 2 position in Delhi and No. 3 position in Bangalore.
Revenue from the internet segment grew to | 2.1 crore as against |
1.1 crore in Q3FY10. The Bruda JV contributed ~ | 15 crore as
against ~ | 29 crore in the last quarter.
Valuation
At the CMP of | 143, HT Media is trading at 20.1x FY11E EPS of | 7.1 and
14.4x FY12E EPS of | 9.9. We have assigned a 10% discount to market
leader Jagran Prakashan, which we have valued at 19x FY12 EPS. We
have valued the stock at 17.1x FY12 EPS to arrive at a target price of |
170. This implies an upside of 19%. We maintain our view on the stock as
BUY.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
HT Media -Impressive growth…
HT Media reported its Q3FY11 results above our expectations. The
topline stood at | 465.1 crore against our expectation of | 442.4 crore,
primarily on the back of higher-than-expected growth in English ad
revenues (24.7% YoY) led by the festive season. Also, the Hindi business
grew a robust 35% YoY. EBITDA margin contracted 136 bps YoY due to
inclusion of Bruda’s financials in this quarter. Nonetheless, on a QoQ
basis, the margin expanded 125 bps led by robust advertisement
growth in both the print and radio segment. The company reported a
PAT of | 47.8 crore against our expectation of | 33.6 crore primarily due
to robust revenue growth.
ƒ Highlights for the quarter
HT Media reported better-than-expected ad revenue growth with the
English segment growing 24.7% YoY to | 275.4 crore from | 220.8
crore and Hindi ad revenue growing 35.0% YoY to | 94.5 crore from
| 70.0 crore. Also, the radio segment reported impressive growth of
79.0% YoY to | 18.2 crore.
Circulation revenue, however, declined 2.0% YoY to | 47.1 crore
from | 48.1 crore even on the back of ~24.5% increase in number of
copies circulated due to lower realisation owing to intense
competition in Mumbai, Bihar and Jharkhand.
The company commissioned its new printing press in Gorakhpur,
UP. Hindustan would have a print run of 1.1 lakh copies from this
location.
Valuation
At the CMP of | 143, HT Media is trading at 20.1x FY11E EPS of | 7.1 and
14.4x FY12E EPS of | 9.9. We have assigned a 10% discount to market
leader Jagran Prakashan, which we value at 19x FY12 EPS. We have
valued the stock at 17.1x FY12 EPS to arrive at a target price of | 170. This
implies an upside of 19%. We maintain our view on the stock as BUY.
Result Analysis
ƒ Newsprint cost well managed
The company managed its newsprint prices very efficiently in a
scenario of increasing circulation on the back of intense competition
(distribution of free copies). Average newsprint prices stood at |
30,900 per tonne as compared to ~| 30,000 per tonne in Q2FY11.
Average newsprint prices for the Hindi business stood at | 29,000
per tonne. We expect the average newsprint cost for the company
to be at ~| 30,800 for FY11E and | 32,000 for FY12E
ƒ Circulation revenues decline YoY
The company has consolidated its position in its key markets. Also,
higher number of supplement copies is being given coupled with a
reduction in cover price for Hindustan in Bihar and Jharkhand to
attract new readers. Circulation revenues declined 2.0% YoY to |
47.1 crore from | 48.1 crore even on the back of ~24.5% increase in
number of copies circulated due to lower realisation owing to
intense competition.
ƒ Margins impressive
The company reported an EBITDA margin of 19.0%, improving 125
bps QoQ and declining 136 bps YoY. However, this is not
comparable on a YoY basis as Q3FY10 numbers do not include
financials of the Bruda JV. Overall margins were impressive led by
robust growth in print ad revenue in advertisement revenue.
PAT margins stood at 10.1% as compared to 8.6% in Q2FY11 and
9.7% in Q3FY10. Margins improved primarily due to robust revenue
growth.
ƒ Other vertical growth on track
The radio segment reported net revenues of | 18.2 crore, which
grew 79.0% YoY and 28.9% QoQ. The radio segment posted a
positive EBITDA of | 3.9 crore as compared to | 1.6 crore in Q2FY11
and EBITDA loss of | 0.1 crore in Q3FY10. The company maintained
its No. 2 position in Delhi and No. 3 position in Bangalore.
Revenue from the internet segment grew to | 2.1 crore as against |
1.1 crore in Q3FY10. The Bruda JV contributed ~ | 15 crore as
against ~ | 29 crore in the last quarter.
Valuation
At the CMP of | 143, HT Media is trading at 20.1x FY11E EPS of | 7.1 and
14.4x FY12E EPS of | 9.9. We have assigned a 10% discount to market
leader Jagran Prakashan, which we have valued at 19x FY12 EPS. We
have valued the stock at 17.1x FY12 EPS to arrive at a target price of |
170. This implies an upside of 19%. We maintain our view on the stock as
BUY.
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