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HT Media Ltd.
Initiation -Overweight
HTML.BO, HTML IN
Core market reviving. Initiate with Overweight
• Initiate with Overweight, PT of Rs235: Our PT implies an upside of
52% from current level. HTML offers exposure to a fast growing
diversified Indian media pool, encompassing English and Hindi print
media, radio, event management and digital media. Print advertising in
India is estimated to grow at 12% CAGR over the next 4 years, while
radio and digital medium like internet are expected to grow at 17% and
27% CAGR, respectively, over the same period.
• Valuations ignoring Delhi revival, focusing excessively on Hindi:
After a 3-year lull, HTML is seeing revival for English advertising in
Delhi, its largest and most profitable market. (~53% ad-revenue and
~85% EBITDA contribution in FY10). We estimate ad-revenues for HT
in Delhi to increase by 16% in FY11E after being flat over last 3 years.
In our view, current valuations at 14.4x FY12E P/E are ignoring the
impending pickup in Delhi profitability, which will more than mitigate
any potential pressures faced in the Hindi markets due to new entrants.
• Breakeven of HT Mumbai and Mint to drive re-rating: HT Mumbai
and business daily, ‘Mint’, are now established number 2 papers by
readership (source: IRS). We believe that HTML will be able to
aggressively monetize these papers over the next 3 years and achieve
breakeven in FY12E. Protracted losses in HT English and Mint have
been a drag on margins and have created a valuation overhang—we
believe that a turnaround will drive a re-rating for the stock. We forecast
EPS CAGR of 32% over FY10-FY13E.
• Price target, valuation, key risks: Our Sep-11 PT is based on 20x Sep-
12E P/E, at a 75% premium to global peers, given relatively stronger
earnings growth and better growth potential offered by Indian market.
Key risks to our thesis are economic slowdown, rise in newsprint prices,
delays in turnaround of HT Mumbai and Mint and rising competition.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
HT Media Ltd.
Initiation -Overweight
HTML.BO, HTML IN
Core market reviving. Initiate with Overweight
• Initiate with Overweight, PT of Rs235: Our PT implies an upside of
52% from current level. HTML offers exposure to a fast growing
diversified Indian media pool, encompassing English and Hindi print
media, radio, event management and digital media. Print advertising in
India is estimated to grow at 12% CAGR over the next 4 years, while
radio and digital medium like internet are expected to grow at 17% and
27% CAGR, respectively, over the same period.
• Valuations ignoring Delhi revival, focusing excessively on Hindi:
After a 3-year lull, HTML is seeing revival for English advertising in
Delhi, its largest and most profitable market. (~53% ad-revenue and
~85% EBITDA contribution in FY10). We estimate ad-revenues for HT
in Delhi to increase by 16% in FY11E after being flat over last 3 years.
In our view, current valuations at 14.4x FY12E P/E are ignoring the
impending pickup in Delhi profitability, which will more than mitigate
any potential pressures faced in the Hindi markets due to new entrants.
• Breakeven of HT Mumbai and Mint to drive re-rating: HT Mumbai
and business daily, ‘Mint’, are now established number 2 papers by
readership (source: IRS). We believe that HTML will be able to
aggressively monetize these papers over the next 3 years and achieve
breakeven in FY12E. Protracted losses in HT English and Mint have
been a drag on margins and have created a valuation overhang—we
believe that a turnaround will drive a re-rating for the stock. We forecast
EPS CAGR of 32% over FY10-FY13E.
• Price target, valuation, key risks: Our Sep-11 PT is based on 20x Sep-
12E P/E, at a 75% premium to global peers, given relatively stronger
earnings growth and better growth potential offered by Indian market.
Key risks to our thesis are economic slowdown, rise in newsprint prices,
delays in turnaround of HT Mumbai and Mint and rising competition.
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