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Stock Report
HT Media Limited - Long-term rating downgraded to 'CRISIL AA-/Stable', CP Reaffirmed
Posted On : 2022-08-31 21:51:20( TIMEZONE : IST )
CRISIL Ratings has downgraded its rating on the long-term bank facility and the non-convertible debentures (NCDs) of HT Media Limited (HTML) to 'CRISIL AA-/Stable' from 'CRISIL AA/Negative'. The short-term rating on the commercial paper programme has been reaffirmed at 'CRISIL A1+'. CRISIL Ratings has also withdrawn its rating on the term loan of Rs 20 crore at the company's request. This is in line with CRISIL Ratings' policy on withdrawal of ratings.
The downgrade reflects weaker than expected operating profitability of HTML reflected in subdued operating profits of Rs 27 crore in FY22. Furthermore, company reported operating loss of Rs 29 crore in quarter ended June 2022 compared to operating profit of Rs 22 crore in the previous quarter primarily due to increase in newsprint costs. The operating revenue remained flat at Rs 420 crore in quarter ended June 2022 as against Rs 421 crore in the quarter ended March 2022.
Ad revenue, which contributes about three-fourth to the topline of large print media companies, including HTML, has a high correlation with economic growth. While ad volumes and yields have witnessed recovery since the impact of second wave of Covid-19 in previous fiscal, ad yields continue to be discounted compared to pre pandemic levels. CRISIL will monitor recovery in ad revenues and its impact on the operating performance going forward.
The ratings continue to reflect the strong market position of HTML's flagship English daily, Hindustan Times (HT), in the National Capital Region (NCR) and the established market position of its Hindi daily, Hindustan. The ratings also factor in HTML's healthy financial flexibility because of strong liquidity of ~ Rs 1880 crore as on March 31, 2022, despite sharp impact of the pandemic on the company's operations. These strengths are partially offset by continued weak operating profitability and susceptibility to volatility in newsprint prices and economic downturns.
