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Buy HT Media; target of Rs 120: KRChoksey

KRChoksey is bullish on HT Media and has recommended buy rating on the stock with a target of Rs 120 in its May 16, 2013 research report.

May 24, 2013 / 11:37 AM IST
 
 
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KRChoksey`s research report on HT Media


"HT Media Ltd’s Q4FY13 result was in line with our expectation on net sales and EBITDA front however higher interest and tax expenses dragged net profitability. The company reported net sales of Rs 500.5crs,a marginal growth of 1.4 percent YoY led by increase in circulation revenue. Ad revenue showed muted growth of 1 percent over YoY. EBITDA stood at Rs 71.8crs, a robust growth of 48.8 percent YoY on account of lower raw material cost. Consequently EBITDA margins increased by 450bps to 14.3 percent. Net profit for the quarter was Rs 40.1crs which increased by 82.2 percent YoY. Net profit margin increased by 350bps YoY to 8.0 percent. Ad revenue remained under pressure due to soft economic environment and 1 percent YoY increase in ad revenue was primarily led by higher volume than yield improvement. The management expects things to improve with revival in ad spends going forward. Radio and digital segments witnessed healthy revenue growth in the quarter. We believe growth in advertising revenue coupled with circulation revenue growth will drive revenue growth in FY14E and FY15E. Newsprint prices have softened easing pressure on operating cost. With cost rationalization, HT Media will continue uptrend in margin improvement."


"HT Media’s advertising revenue increased by 1 percent YoY over Q4FY12 to Rs 377.8crs. Growth in ad revenue was purely led by volume growth reflecting muted ad spend for print media. Circulation revenue grew by 19 percent YoY to Rs 57.4crs. We expect sluggish growth in advertising revenue for print media in FY14 however healthy growth in circulation revenue and robust growth in radio revenues will drive the revenue growth in FY14E. HT Media’s advertising revenue increased by 1 percent YoY over Q4FY12 to Rs 377.8crs. Growth in ad revenue was purely led by volume growth reflecting muted ad spend for print media. Circulation revenue grew by 19 percent YoY to Rs 57.4crs. We expect sluggish growth in advertising revenue for print media in FY14 however healthy growth in circulation revenue and robust growth in radio revenues will drive the revenue growth in FY14E.”


“HT Media’s Q4FY13 result indicates continued sluggish ad spend for print media. It’s dominance in Hindi and English print segment coupled with presence across other verticals will help to outperform in soft advertising environment. The company has strong balancesheet to cater expansion plans. The stock is trading at 15.4x and 13.5x PE to FY13E and FY14E earnings. We recommend buy on the stock with a price target of Rs 120,” says KRChoksey research report.

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first published: May 24, 2013 11:37 am

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