TV18 Broadcast - Moving in the right direction... - Edelweiss

TV18 Broadcast has reported a strong set of numbers for Q3 FY13, with revenues growing by 49% YoY (not strictly comparable due to inclusion of India Cast revenues; like-to-like revenue growth at 25%), and EBITDA soaring to INR 51 crs from INR -20 crs. The best part of the company's Q3 FY13 results is the turnaround in net distribution income (NDI), which is subscription less carriage. NDI moved into the black for the first time ever.

Further, NDI - the core to our bullish hypothesis - is slated to reach higher levels of INR 300+ crs in FY16E from INR -100 crs in FY12. On the negative side, we have seen a deterioration in profitability of ETV's entertainment business this quarter, with EBITDA shrinking from a INR +63 crs to INR -16 crs (annualized). Management commentary suggests that FY14E will be a re-investment phase for the ETV business, implying muted profitability. Our long-term call on the TV18 stock remains intact as we see the company benefiting greatly from higher subscription revenues in a digitized environment given its high quality channel portfolio.

We maintain a 'Buy' from a two-year perspective.

Source : Equity Bulls

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