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1QFY12 Results
We upgrade HT Media earnings by 4% led by a positive surprise in
1QFY12 results and encouraging trends from the latest readership
survey. HT Media English newspapers registered higher ad growth of
18%YoY with improving positioning in Mumbai and a 15%YoY growth in
Hindi editions. We project an average 14% advertising and 19% earnings
growth for FY12-13CL despite the challenge of high newsprint prices. The
stock trades at a reasonable 15x FY13CL earnings and we maintain OPF.
Improving positioning boosting ad-growth
HT Media’s 1QFY12 revenue at Rs5bn, up 23%YoY, was ahead of our expectations,
led by a positive surprise in English print ad growth of 18%YoY and Hindi ad
growth at 15%YoY driven mainly by improved realisation. Circulation revenues
increased 4%YoY. However the robust growth in revenues was partially offset by
higher raw material cost at Rs1.7bn, up 32%YoY due to higher circulation and
newsprint prices. Raw materials account for 35% of revenues. Consolidated Ebitda
margins were down 45bps QoQ at 18.2%. Other income increased 25%QoQ to
Rs146m and boosted profit to Rs515m up 24%YoY, which too was ahead of
estimates. HT Media’s internet revenues increased 39%YoY to Rs85.6m and radio
by 75%YoY to Rs215m - Ebitda was Rs34m with a four-city presence.
Rising readership in Hindustan Times, Hindustan & Mint
In core print business, HT has continued to consolidate in its publication’s
positioning as reflected in the latest readership survey - IRS Q1 2011. As per
management ‘Hindustan’ will further continue to strengthen its position as the
second largest Hindi newspaper. Amongst the Hindi dailies while the leader Dainik
Jagran witnessed a decline of 2.5% Hindustan registered encouraging growth of
19%YoY and amongst English dailies which witnessed a growth of 3.6% on YoY
basis HT Media’s Hindustan Times registered higher a 6.5%YoY growth. Besides
HT’s business paper Mint continues to consolidate its number two position in
business daily segment with readership of 0.22m and 27% readership share in
Mumbai, Delhi, Bengaluru and Kolkata.
Earnings upgrade; maintain O-PF
Given the positive surprise in advertising revenues and HT Media’s improved
market positioning for publications, we upgrade HT’s consolidated earnings by 4%
for FY12-13CL. Although newsprint prices at Rs32,200/tonne are still high and a
key challenge. Also we remain negative on HT’s radio business and the company
may bid for more stations in upcoming phase III of licensing. Further, HT Media
has made a foray into the education segment by establishing a joint venture with
MT Educare Pvt Ltd a leading chain of coaching centres under the brand ‘Mahesh
Tutorials’. HT Media is net cash at Rs4bn and following our upgrade, we now
project an average 19% earnings growth over FY12-13CL. With the stock trading
at 15x FY13CL earnings, we maintain Outperform.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY12 Results
We upgrade HT Media earnings by 4% led by a positive surprise in
1QFY12 results and encouraging trends from the latest readership
survey. HT Media English newspapers registered higher ad growth of
18%YoY with improving positioning in Mumbai and a 15%YoY growth in
Hindi editions. We project an average 14% advertising and 19% earnings
growth for FY12-13CL despite the challenge of high newsprint prices. The
stock trades at a reasonable 15x FY13CL earnings and we maintain OPF.
Improving positioning boosting ad-growth
HT Media’s 1QFY12 revenue at Rs5bn, up 23%YoY, was ahead of our expectations,
led by a positive surprise in English print ad growth of 18%YoY and Hindi ad
growth at 15%YoY driven mainly by improved realisation. Circulation revenues
increased 4%YoY. However the robust growth in revenues was partially offset by
higher raw material cost at Rs1.7bn, up 32%YoY due to higher circulation and
newsprint prices. Raw materials account for 35% of revenues. Consolidated Ebitda
margins were down 45bps QoQ at 18.2%. Other income increased 25%QoQ to
Rs146m and boosted profit to Rs515m up 24%YoY, which too was ahead of
estimates. HT Media’s internet revenues increased 39%YoY to Rs85.6m and radio
by 75%YoY to Rs215m - Ebitda was Rs34m with a four-city presence.
Rising readership in Hindustan Times, Hindustan & Mint
In core print business, HT has continued to consolidate in its publication’s
positioning as reflected in the latest readership survey - IRS Q1 2011. As per
management ‘Hindustan’ will further continue to strengthen its position as the
second largest Hindi newspaper. Amongst the Hindi dailies while the leader Dainik
Jagran witnessed a decline of 2.5% Hindustan registered encouraging growth of
19%YoY and amongst English dailies which witnessed a growth of 3.6% on YoY
basis HT Media’s Hindustan Times registered higher a 6.5%YoY growth. Besides
HT’s business paper Mint continues to consolidate its number two position in
business daily segment with readership of 0.22m and 27% readership share in
Mumbai, Delhi, Bengaluru and Kolkata.
Earnings upgrade; maintain O-PF
Given the positive surprise in advertising revenues and HT Media’s improved
market positioning for publications, we upgrade HT’s consolidated earnings by 4%
for FY12-13CL. Although newsprint prices at Rs32,200/tonne are still high and a
key challenge. Also we remain negative on HT’s radio business and the company
may bid for more stations in upcoming phase III of licensing. Further, HT Media
has made a foray into the education segment by establishing a joint venture with
MT Educare Pvt Ltd a leading chain of coaching centres under the brand ‘Mahesh
Tutorials’. HT Media is net cash at Rs4bn and following our upgrade, we now
project an average 19% earnings growth over FY12-13CL. With the stock trading
at 15x FY13CL earnings, we maintain Outperform.
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