Media to post cumulative topline growth of 10%: Angel

Angel Broking has come out with its earnings estimates on media sector for December quarter FY13. The research firm expects media universe to post a cumulative top-line growth of 10% yoy. The revenue growth of print media companies for the quarter would primarily be aided by uptick in advertisement revenues due to festive season.

Healthy top-line growth

For 3QFY2013, we expect our Media universe to post a cumulative top-line growth of 10% yoy. The revenue growth of print media companies for the quarter would primarily be aided by uptick in advertisement revenues due to festive season. Sun TV Network (Sun TV)'s agreement with Arasu Cable as well as uptick in advertisement revenues from FMCG companies is expected to bolster the former's top-line performance. PVR is also expected to post a healthy revenue growth on the back of robust seat additions and many successful releases during the quarter.

During 3QFY2013, the average newsprint prices have remained flat at $620. In INR terms, the newsprint prices have posted a slight decline of 1.9% qoq to ~ Rs 33,656 due to 1.9% qoq appreciation of INR v/s USD. However, newsprint prices are up by 6.6% yoy in INR terms, on account of yoy depreciation in INR v/s USD.

Outlook and valuation:

Print media stocks had underperformed the Sensex in the last few quarters due to margin pressure. However they have posted impressive gains in 3QFY2013, outperforming the Sensex on expectations of uptick in advertising revenues (on account of the festive season) and on increased optimism of economic recovery. However, we believe, the print media stocks are still trading at cheaper valuations, considering the structural positives of print business (high brand loyalty and significant entry barriers). Hence, we maintain Buy on DBCorp and Jagran Prakashan and Accumulate on HTMedia.

	Net Sales (Rs cr)		Net Profit  (Rs cr)
	3QFY13E	% chg	3QFY13E	% chg
Jagran Prakashan	344	8	52	26
DB Corp	438	11	60	8
HT Media	535	3	49	3
PVR	186	37	15	63
Sun TV	477	12	185	10

 

 

 

 

 

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