Result Update: TV18 Broadcast Ltd - BUY - TP Rs.50 - Kotak

While TV18 Broadcast's 2QFY18 results have come in below estimates (PAT Rs 73 mn vs est. Rs 134 mn), we believe: i/ a large part of underperformance relative to estimates is on account of GST-related disturbances (therefore likely non-recurring), and the advertising environment is likely to pick up significantly in the coming quarters, ii/ the company has undertaken significant cost initiatives in recent quarters which further lend visibility to earnings, iii/ we expect that earnings have bottomed out in the light of weak base (2HFY17 on demonetization, and 1HFY18 on GST rollout) for the coming four quarters, iv/ the company stands to benefit significantly from a strong election season starting 3QFY19, adding to medium-term earnings visibility. While earnings risks remain (2H contributes disproportionately to earnings), the fear of earnings having a severe negative impact on the stock is significantly reduced post 2QFY18. As fears relating to quarterly earnings recede, we raise our target multiple on the stock to 23X FY19E PER. We set a fresh (June, 2018) price target of Rs 50. Maintain BUY.

Shares of TV18 BROADCAST LTD. was last trading in BSE at Rs.40.55 as compared to the previous close of Rs. 41.05. The total number of shares traded during the day was 616752 in over 1141 trades.

The stock hit an intraday high of Rs. 41.6 and intraday low of 40.35. The net turnover during the day was Rs. 25255138.

Source : Equity Bulls

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