Buy HT Media; target Rs 112: ICICIdirect.com
ICICIdirect.com is bullish on HT Media and has recommended buy rating on the stock with a price target of Rs 112 in its research report dated July 22, 2013.
July 24, 2013 / 12:47 PM IST
ICICIdirect.com's report on HT Media
"HT Media reported its Q1FY14 numbers, which were in line with our estimates on the topline front but surprised positively on margins. The topline came in at Rs 540.9 crore (I-Direct estimate: Rs 534.6 crore), growing 10.4 percent YoY, driven by print ad growth of 9.9 percent and a circulation revenue growth of 15.8 percent. EBITDA margins expanded 76 bps YoY to 14.4 percent owing to lower newsprint costs in Q1FY14 despite the revenue growth. Consequently, the EBITDA came in at Rs 78.0 crore against our estimate of Rs 69.5 crore. PAT also beat our estimate and came in at Rs 47.5 crore. Though international newsprint prices have been falling, the rupee depreciation has limited gains for the company. The Hindi ad revenue has kept up its growth trajectory while the English ad revenue posted a better ad growth than Q4FY13. We expect ad growth to remain on the higher side, subsequently, owing to a low base and improving ad scenario."
"Currently, the stock is trading at 11.6x one year forward PE, which is at a significant discount to its three year average of 17.4x on year forward multiple. We believe, with an improving ad scenario, the stock will move towards its historical averages. We have valued the stock at 11x FY15E EPS to arrive at a target price of Rs 112. We rate the stock as BUY," says ICICIdirect.com research report.
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