HT Media - 4QFY2012 Result Update - Angel Broking

Moderate top-line growth: For 4QFY2012, HT Media reported a modest performance on the revenue front. The company's top line grew by 5.8% yoy to Rs.494cr. However, pressure on OPM due to increased newsprint costs and other expenses pulled down the company's earnings by ~58% yoy to Rs.22.6cr Key highlights for the quarter: During the quarter, the company witnessed modest top-line growth of 5.8% yoy due to moderate circulation revenue growth and sluggish ad revenue growth of 3%. OPM contracted by 831bp yoy due to higher newsprint costs yoy and a ~500bp yoy increase in other expenses. In terms of other segments, radio reported operating loss ~Rs.1.4cr in spite of a sharp hike in advertising rate. The digital business also reported operating loss of ~Rs.8cr mainly on account of Shine, HTML's job portal. Consequently, the bottom-line registered a ~58% yoy decline to Rs.22.6cr.

Outlook and valuation: At the CMP, HTML is trading at 10.7x FY2014E consolidated EPS of Rs.10.6. We maintain our Buy recommendation on the stock with a revised target price of Rs.148, based on 14x FY2014E EPS (at ~15% discount to our target multiple for Hindi print media players). Downside risks to our estimates include 1) any further rise in newsprint prices, 2) competition becoming fierce and 3) higher-than-expected losses/increase in the breakeven period of the new launches.

Source : Equity Bulls

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