Buy Hindustan Media; target of Rs 180: PINC Research

541 Investors following Hindustan Media. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Hindustan Media; target of Rs 180: PINC Research

PINC Research is bullish on Hindustan Media Ventures (HMVL) and has recommended buy rating on the stock with a target of Rs 180 in its July 15, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy TCS; target of Rs 1320: ICICIdirect.com Accumulate Bajaj Auto; target of Rs 1530: P Lilladher Buy Bharat Electronics; target of Rs 2100: Sharekhan ALSO READ See previous views by PINC Research See what other Experts & Brokerages are saying about Hindustan Media See messages about Hindustan Media Hindustan Media BSE | NSE 31/05/12 Are Mutual Funds betting on Hindustan Media?

PINC Research is bullish on Hindustan Media Ventures (HMVL) and has recommended buy rating on the stock with a target of Rs 180 in its July 15, 2011 research report.

"Hindustan Media Ventures (HMVL)'s top-line grew 12% YoY to reach Rs1.5bn wherein the Ad revenue grew 15% YoY (18% QoQ growth) to Rs 1108mn. Circulation revenue registered a growth of 2.5%YoY (witnessing robust QoQ growth of 8%) to Rs 331mn mainly led by better realisation per copy. However, OPM declined sharply from 25% in Q1FY11 to 18.1% in Q1FY12, on account of higher marketing spend in UP and Uttarakhand and increased employee costs by 23% YoY. Raw Material as a percentage of sales increased 100bps from 39.5% to 40.5% in Q1FY12. Lower than expected ad growth - set back from the education Sector."

"The company reported Ad revenue (74% of total revenue) growth of 15% YoY of Rs 1,108mn mainly due to lower ad spend by the education sector (Q1 being highest ad spend season for education) which contributes 12-14% to the company's overall ad revenue. Better realisation per copy posted strong Circulation growth of 8% sequentially and 2.5% YoY to Rs 331mn mainly due to better realization per copy across markets. The company reported lower EBIDTA of Rs 270mn on account of surge in raw material expense which increased by 15% YoY from Rs 579mn to Rs  604mn (however sequentially it grew marginally) due to increased circulation copies in UP. Increased marketing spend in UP led sales promotion expenses to rise by 36% YoY in Q1FY12. Employee costs escalated 23% due to increment in wages and increased no. of employees. Other expenditure grew sharply by 31% to Rs 358mn led by increased printing facilities and exceptional Rs 35mn provision for diminution in value of investments in Ad for Equity model in Q1FY12. Resultant EBIDT margin contracted to 18.1% from 24.6% in Q1FY11. Profits grew a mere 2% YoY to Rs 186mn (excluding the 'provision for Ad for Equity', PAT grew 21%)."

"We believe HMVL being the fastest-growing Hindi news daily, is well entrenched to deliver revenue CAGR of 14% and PAT CAGR of 24% over FY11-FY13E. We expect UP (largest print market) expansion to yield better monetisation in coming quarters. At the CMP, the stock trades at 12x FY13E EPS. We reiterate our 'BUY' recommendation with a target price of Rs 180 (16x FY13E EPS)," says PINC Research report.

What stocks does Morgan Stanley hold?

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment