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HT Media Ltd.
Overweight
HTML.BO, HTML IN
Q4FY11: Ad growth delights; Maintain OW
HTML reported Q4/FY11 revenues 4% ahead of consensus driven by strong
advertising revenues. EBITDA margins were 90bps below expectations on
account of higher newsprint costs. We cut estimates moderately to account for
higher newsprint costs going forward. Remain OW with revised TP of Rs250
• Yield improvements to drive Advertising growth: FY11 Advertising
revenues grew 22% YoY driven by strong volumes and yields. Management
indicated that ad spends across sectors have been strong for both English
and Hindi segments. Ad revenues for HT Mumbai grew 38% YoY, a trend
we expect to sustain as readership scales up. HTML noted that ad rates
raised in 3Q have been well received by the advertisers. Management
guided to similar ad revenue growth in FY12, with strong yield
improvements offsetting modest volume declines across certain sectors.
• Readership growing; but newsprint costs rising: HTML English
readership grew 2% QoQ in Q410 (IRS) with Delhi and Mumbai registering
strong growth. New editions in the NCR region should further improve
readership in the region. Mint, with readership share at 24% in key metros,
should also gain from new launches in Chennai, Ahmedabad and
Hyderabad. Management indicated that the high newsprint costs have
resulted not only from high paper prices, but also from higher print orders
given ahead of circulation ramp up of new editions.
• FY11 results highlights: FY11 revenues were up 25% YoY driven by
strong growth in ad revenues (+22%). EBITDA margins moderated 20bps to
17.9% due to higher raw material costs (+32% YoY). Net profit increased
31% YoY.
• Revise earnings and TP: We pare earnings estimates slightly (1%/4% for
FY12/FY13) to account for higher newsprint costs. We roll forward our TP
to Mar-12 (previously Sep-11), now at Rs250 based on 20x FY13E P/E,
inline with domestic media peers. Key risks include rising competitive
intensity, inability to scale up circulation in new markets, significant
increase in newsprint costs and slowdown in economic growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HT Media Ltd.
Overweight
HTML.BO, HTML IN
Q4FY11: Ad growth delights; Maintain OW
HTML reported Q4/FY11 revenues 4% ahead of consensus driven by strong
advertising revenues. EBITDA margins were 90bps below expectations on
account of higher newsprint costs. We cut estimates moderately to account for
higher newsprint costs going forward. Remain OW with revised TP of Rs250
• Yield improvements to drive Advertising growth: FY11 Advertising
revenues grew 22% YoY driven by strong volumes and yields. Management
indicated that ad spends across sectors have been strong for both English
and Hindi segments. Ad revenues for HT Mumbai grew 38% YoY, a trend
we expect to sustain as readership scales up. HTML noted that ad rates
raised in 3Q have been well received by the advertisers. Management
guided to similar ad revenue growth in FY12, with strong yield
improvements offsetting modest volume declines across certain sectors.
• Readership growing; but newsprint costs rising: HTML English
readership grew 2% QoQ in Q410 (IRS) with Delhi and Mumbai registering
strong growth. New editions in the NCR region should further improve
readership in the region. Mint, with readership share at 24% in key metros,
should also gain from new launches in Chennai, Ahmedabad and
Hyderabad. Management indicated that the high newsprint costs have
resulted not only from high paper prices, but also from higher print orders
given ahead of circulation ramp up of new editions.
• FY11 results highlights: FY11 revenues were up 25% YoY driven by
strong growth in ad revenues (+22%). EBITDA margins moderated 20bps to
17.9% due to higher raw material costs (+32% YoY). Net profit increased
31% YoY.
• Revise earnings and TP: We pare earnings estimates slightly (1%/4% for
FY12/FY13) to account for higher newsprint costs. We roll forward our TP
to Mar-12 (previously Sep-11), now at Rs250 based on 20x FY13E P/E,
inline with domestic media peers. Key risks include rising competitive
intensity, inability to scale up circulation in new markets, significant
increase in newsprint costs and slowdown in economic growth.
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