Motilal Oswal neutral on HT Media; target Rs 113

Motilal Oswal has maintained a neutral rating on HT Media with a target price of Rs 113, in its February 13, 2013 research report.

"HT Media's 3QFY13 PAT grew 11% YoY and 61% QoQ to INR536m (est INR534m). EBITDA/PBT was 2/6% above estimate, largely due to 4-5% QoQ decline in RM and employee costs. Ad revenue grew ~2% YoY and 14% QoQ to INR4.15b (3% YoY decline in English; 15% increase in Hindi), while circulation revenue increased 12% YoY to INR565m (6% in English; 15% in Hindi). Revenues increased 4% YoY and 7% QoQ to INR5.47b (1% below est). Ad revenue for English and Hindi segments was broadly in line. EBITDA increased 13% YoY to INR875m (2% above est) on continued cost control. Operating costs grew by only 2% YoY and 1% QoQ. RM costs remained flat YoY and declined 4% QoQ to INR1.87b (34% of revenue). Digital business EBIT loss stood at INR89m in 3QFY13 v/s INR100m in 2QFY13. Net cash increased to INR6b from INR5.45b in 2QFY13.

Valuation and view: While ad growth has rebounded post two preceding quarters of negative ad growth, English segment remains weak (posted fourth straight quarter of negative ad growth). We upgrade EPS estimates by 3-6%. We expect EPS to decline by ~4% in FY13E, followed by 12% EPS CAGR over FY13E-15E, led by 10% ad revenue CAGR. The stock trades at a P/E of 13.2x FY14E and 12.2x FY15E. Maintain Neutral with a target price of INR113," says Motilal Oswal research eport.

Institutional holding more than 40% in Indian cos

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