Hindustan Media up 2%; Antique retains buy, target Rs 319

Moneycontrol Bureau

Antique Stock Broking reiterated its buy rating on Hindustan Media Ventures (HMVL) with a target price of Rs 319 apiece, citing confidence of the company of reporting double-digit growth in advertising revenue in current financial year. The stock gained nearly 2 percent intraday Tuesday.

The brokerage, which recently held an investor meeting with company's CEO Vivek Khanna to discuss the management's business outlook, said he remained confident of delivering another year of double-digit advertising growth in FY16, despite some base impact of the central elections in Q1FY15. This will be driven by continued bridging of the gap in ad yields relative to competition, based on readership gains, particularly in Uttar Pradesh, it added.

Antique expects margins to rise around 200 basis points annually, based on operating leverage. "Near-term margin expansion visibility is high, as it expects newsprint costs to remain soft for the major part of the year, while circulation growth will slow down," it reasoned.

HMVL is set to unveil its digital strategy in the near future, but held back details as it is still in the works, said the brokerage in its note.

However, it added that investors expressed their apprehensions on low dividend payout and potential sub-optimal cash usage of Rs 600 crore in the future.

At 10:50 hours IST, the scrip of Hindustan Media Ventures was quoting at Rs 218.80, up Rs 3.50, or 1.63 percent on the Bombay Stock Exchange.