Radio FDI hike very positive for media sector: Dipan Mehta

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Radio FDI hike very positive for media sector: Dipan Mehta

BSE, NSE Member, Dipan Mehta, said the hike in FDI cap in FM radio news channels to 26% versus 20%, is positive news. There is a much scope for launching niche channels catering to specific tastes of the community or that particular area and it will act as a trigger for business momentum. He likes JP Associates and Punj Lloyd, reports CNBC-TV18.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Buy Jaiprakash Associates, says Mehta TRAI recommendations to take effect in 3-4 months: ENIL ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Punj Lloyd |

BSE, NSE Member, Dipan Mehta , said the hike in FDI cap in FM radio news channels to 26% versus 20%, is positive news. There is a much scope for launching niche channels catering to specific tastes of the community or that particular area and it will act as a trigger for business momentum. He likes JP Associates and Punj Lloyd , reports CNBC-TV18.

Excerpts from CNBC-TV18's exclusive interview with Dipan Mehta:

Q: What do you make of this news, a lot of interest in the radio companies we have seen from the investor community, what would be your key take away?

A: It's a step in the right direction, and amongst all the proposals the TRAI has noted, the fact that a single radio company can have more than one channel per city or district is extremely positive. The interaction with radio companies, has revealed that there is a much scope for launching niche channels catering to specific tastes of the community or that particular area, but they aren't allowed to do so. If this is permitted, then it would open new growth avenues for existing radio companies, so it's extremely positive for radio companies and in any case they are growing at rates higher than average rates in the media sector, which could act as a further trigger for the business momentum, which in any case is under way. 

Q: How would you approach, a JP Associates and Punj Lloyd? Are there any concerns on these two stocks with the kind of beating that they have taken recently or do you think they still present a value buy opportunity?

A:  JP Associates looks extremely attractive at this point of time, and perhaps the correction has been over done because of technical considerations and sell offs by few large institutions as well as a melt down in futures market. Hydro power is the next growth engine for this country and we are all talking about renewable energy, and there are a handful of 4-5 companies in India that can execute hydro power and JP Associates is one of them. That business has amongst the highest operating profit margins within the infrastructure sector, so it's a buy at these levels.

Coming to Punj Lloyd, which is another interesting company, in the period from October 2007 to January 2008, it was infrastructure all the way and the three companies were the poster boys, therefore we saw the rally. But at these levels also, Punj Lloyd looks quite attractive and interesting and we have a positive outlook on the stock.

Q: Do you think that there is some long term execution risk that remains or would you buy into the stock?

A: It's more as to how they are able to encash on the real estate side and that's going to be a challenge, but by and large, these stocks have corrected so much that there is a case for a technical upswing.

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It is safe to assume that my clients & I may have an interest in the stocks/sectors discussed.