Broking house, Edelweiss Research has maintained sell rating on New Delhi Television , NDTV.
Edelweiss Research report on NDTV:
"NDTV reported 15.8% Y-o-Y growth in revenues, in line with our expectations. The expected slowdown in Y-o-Y growth in this quarter as compared to the previous two quarters is because of decline in viewership share in both the English and Hindi news genre due to intense competition. EBITDA margins declined by 360 bps largely due to a 59.8% increase in marketing and distribution expenses owing to higher payout to the cable operators. The company reported a net profit of Rs 48 million as compared to Rs 25 million in Q3FY06 and a net loss of Rs 36 million in Q2FY07, slightly below our expectations."
"At CMP of INR 311, the stock trades at a PE of 249.1x FY07E and 73.0x FY08E. These numbers yet do not include expenses that will be incurred on the entertainment channel because NDTV's stake in the venture and the timelines for the launch of channel are not yet known. We believe that a significant portion of the current market capitalization is unexplained by the current news business. While the possibility of an investor picking up stake in NDTV Ventures at attractive valuations/an overseas listing of NDTV Ventures or high profile hires can keep the stock buzzing in the short term, we feel that given the execution risks and lack of visibility, the present valuations do not provide enough margin of safety. We maintain our 'SELL' rating on the stock."
