ICICI Direct's research report on TV Today Network
TV Today reported a weak set of numbers as the dual impact of new tariff order (NTO) and pre-emptive volume cut to improve ad volume led to a steep decline in TV broadcasting revenues of 11% YoY to Rs 141.5 crore. We note that this was a steeper decline than Zee Media and TV18 (business, national news) that reported 3.9% YoY and 1% YoY revenue decline for the quarter, respectively, due to NTO impact. The overall topline at Rs 165.7 crore was down 8.6% YoY. The performance of the radio business was also weak as it reported ~32% YoY revenue decline (albeit on a small base) to Rs 4.7 crore. Digital revenues grew 24% YoY to Rs 19.5 crore. Given the weak topline show, the margins declined by 1000 bps YoY to 18.8%.
Outlook
TV Today has maintained its leadership in the Hindi news segment across cycles and enjoys a strong balance sheet with net cash of~ Rs 287 crore. The TV news broadcasting growth, going ahead, is expected to be strong on political advertisement related benefits and also on a favourable base. The stock has corrected ~30% in the last six months and offers favourable risk reward. We roll over our valuations to FY21 valuing it at 12x FY21E P/E vs. 13x FY20E earlier to arrive at a target price Rs 340/share (vs. Rs 350 earlier). We upgrade the stock from HOLD to BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!