Buy TV Today Network; target of Rs 300: ICICI Direct

ICICI Direct's research report on TV Today Network

TV Today reported a muted set of numbers on the profitability front for Q3FY20 owing to higher production cost & other expenses. Operating revenue came in at Rs 222.4 crore, up 7.9% YoY with TV broadcasting revenue at Rs 179.8 crore (5.4% YoY growth) driven by Maharashtra and Haryana state election tailwinds. Radio revenue declined 33.7% YoY and came in at Rs 4.7 crore due to a challenging macroeconomic scenario. Digital revenue registered robust growth of 42.7% YoY and came in at Rs 29.5 crore. EBITDA was at Rs 60.8 crore, flattish YoY as higher revenues were offset by increased production and other expenses. EBITDA margin came in at 27.3%, 194 bps lower YoY. Consequently, PAT was at Rs 37.5 crore, decline of 1.4% YoY, due to muted EBITDA.

Outlook

We maintain our BUY rating with revised target price of Rs 300/share, valuing it at 10x FY21 earnings.