HT Media - Q3FY12 Result Review - PINC Research

Q3FY12 Result Review - HT Media - Impressive performance on English ad; Maintain 'BUY'; TP Rs166

Impressive performance on English ad

HT Media registered a top-line of Rs5.3bn (13.2%YoY) better than our expectation (PINCe Rs5.1bn) wherein Ad revenue witnessed growth of 10%YoY to Rs 4bn (with English ad revenue growing 11%YoY as against Hindi ad revenue at 8%YoY). Circulation revenue registered de-growth of -0.8%QoQ (7%YoY) with English circulation de-growth of 5%QoQ (remained flat YoY) to Rs503mn in Q3FY12. Raw material costs increased 13%YoY mainly due to higher newsprint consumption and rupee depreciation. OPM declined from 19% in Q3FY11 to 14.7% in Q3FY12 primarily due to Rs100mn forex loss and Rs75mn one-off item (provision for diminution in value of investment).

- English ad growth outperforms Hindi ad growth
- Disappointing performance by other businesses
- Surged Raw material cost, forex loss dent margins

VALUATIONS AND RECOMMENDATION

We believe, HT Media is uniquely placed to capture growth opportunities across the media platforms - Hindi print, English print, Radio and Internet portals. At CMP, the stock is trading at 14xFY13E EPS. We reiterate our BUY recommendation on the stock with a revised target price of Rs166 at 18xFY13E EPS.

Source : Equity Bulls

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