KR Choksey recommended buy rating on TV 18 Broadcast with a target price of Rs 57 in its research report dated July 18, 2017.
KR Choksey's research report on TV 18 Broadcast
TV18 reported its Q1 FY18 results, which were largely below our estimates but showed improvement on a yoy basis. Revenue stood at INR 2,190 Mn, down 21.5% qoq and up 4% yoy.EBITDA (under Ind AS consolidated) stood at INR (138) Mn in Q1 FY18, an improvement over INR (190 Mn) in Q1FY17 .PAT was recorded at INR (119) Mn in Q1FY18, versus INR (141) Mn in Q1 FY17 and mainly driven by improvement of performance of JVs.Outlook
We expect advertising revenues to pick up drastically through H2FY18E on the back of increased domestic income and consumption and therefore higher capacity and willingness for ad-spending. We expect Marketing & Distribution expenses to also reduce dramatically for new channels which usually have a turnaround time of 1-2 years and therefore expect a bounce-back in margins. We maintain a BUY rating on the stock and assign a multiple of 30x to it’s FY18E EPS of INR 1.9 to arrive at a target price of INR 57.
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