Buy NDTV; target of Rs 375: Sharekhan

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Buy NDTV; target of Rs 375: Sharekhan

Broking house, Sharekhan has recommended buy rating on New Delhi Television, NDTV with a target of Rs 375.

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NDTV BSE | NSE 30/05/12 Are Mutual Funds betting on NDTV?

Broking house, Sharekhan has recommended buy rating on New Delhi Television , NDTV with a target of Rs 375.

Sharekhan report on NDTV:

With funding tie-ups in place for its much-awaited entry into the general entertainment space New Delhi Television (NDTV) is all set for the big bang launch of its general entertainment channel (GEC) by the end of the year. NDTV Imagine, the subsidiary that would house the entertainment venture, has roped in Sameer Nair, the ex-CEO Star India who is believed to be the best programming brain in Indian general entertainment business, to make NDTV Imagine a success. Mr Nair's entry follows Karan Johar's new association with NDTV's GEC as a creative consultant and an ambassador for the NDTV brand. Mr Johar is on the board of NDTV Imagine with his production house Dharma Productions having a stake in the company.

Entertainment bonanza on the anvil

What came as a pleasant surprise for investors in the recent press meet organised by the company was the announcement of two more entertainment channels to be launched by NDTV Imagine. While the second offering of the company is slated to be a movie channel due for launch by March 2008 (this immediately follows the GEC), the genre of the third offering is still not known.

Putting the team in place

The general entertainment space though an attractive one, fetching the maximum eyeballs, is also a highly competitive one, what with quality and diversity of content together with top-notch marketing being the key to success of a GEC. Realising this the management has roped in Mr Nair who was largely responsible for rejuvenating Star India in yesteryear. Mr Nair's baby, the game show "Kaun Banega Crorepati", helped Star Plus to regain the top slot among the GECs. Mr Nair's programming skills have been instrumental in making and retaining Star Plus as the number one GEC in India and that too by a big margin.

With Mr Nair building a team of professionals to repeat the success of his stint with Star Plus for NDTV and Mr Johar bringing in creative programming, we believe NDTV Imagine has got the right people for the right job. Mr Nair has already indicated that he is open to working with the production houses he dealt with at Star India including Balaji Telefilms, whose soaps brought a lot of success to Star Plus. NDTV's GEC  

Valuation and view

At the current market price of Rs330 the stock trades at 48.1x its FY2008E earnings. We are raising our price target on the stock to Rs 375.