Buy Hindustan Media; target of Rs 190: Angel Broking

Angel Broking is bullish on Hindustan Media Ventures and has recommended buy rating on the stock with a target of Rs 190 in its June 18, 2014 research report.

June 19, 2014 / 13:16 IST

26 Aug, 2025 12:21

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Angel Broking`s research report on Hindustan Media Ventures

“Hindustan Media Ventures (HMVL) has witnessed a strong double-digit advertising revenue growth in the last four quarters. This is on account of both, increase in advertising volume as well as yield. According to the Management, double-digit advertising revenue growth is likely to continue considering the expectations of an improvement in the Indian economy in 2HFY2015. The Company continues to consistently report double-digit growth in circulation revenue, aided by increase in circulation volume and higher realization per copy. At the end of FY2014, realization per copy stood at Rs2.1, an increase of 12.4 percent yoy. However, with the recent entry of DB Corp in the Bihar region with a Patna edition, and the resultant cover price war, HMVL’s realization per copy might remain subdued. But the Management believes that increase in circulation volumes in Bihar and Uttar Pradesh (UP) will enable the company to post healthy circulation revenues, going forward.”

“Although the company earns healthy margins in its mature markets, its emerging editions in UP have been a drag on its overall margins. However, UP editions have already achieved breakeven in FY2014 and the Company expects substantial improvement in margins in the UP editions over the next three years. The Management indicates increase in margins in UP editions from the current breakeven levels to 23-25 percent in the next three years, which we have presently not built into our estimates on a conservative basis. HMVL has Rs270cr in cash and current investments, which the company plans to utilize for organic or inorganic expansion.”

“Currently, HMVL is trading at valuations of 8.2x FY2016E EPS, which is at a sharp discount to its other Hindi print media peers (more than 35 percent discount to Jagran and DBCorp). Considering the expected economic revival as well as strong balance sheet, possibility of margin improvement in UP, and reasonable valuations, we recommend Buy on the stock and assign a multiple of 10x to arrive at a target price of Rs190,” says Angel Broking research report.

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