Hindustan Media Ventures: Performance Highlights

3QFY2015 Result Update | Media
January 21, 2015
Hindustan Media Ventures
BUY
Performance Highlights
CMP
Target Price
Quarterly Data (Consolidated)

(` cr)
Investment Period
3QFY15
3QFY14
% yoy
2QFY15
% qoq
Revenue
207
189
9.7
200
3.7
EBITDA
40
37
8.6
39
2.5
19.4
19.5
(18bp)
19.6
(23bp)
37
29
27.1
31
16.3
OPM (%)
Reported PAT
`242
`292
Source: Company, Angel Research
12 months
Stock Info
Sector
Media
Market Cap (` cr)
1,770
Net Debt (` cr)
374
Beta
0.7
Hindustan Media Ventures (HMVL) reported healthy results for 3QFY2015, both
on the top-line and bottom-line front. The top-line growth was healthy mainly due
to decent growth in advertising and circulation revenue. On the operating front,
the companys performance was modest; however, higher other income boosted
profitability.
52 Week High / Low
Healthy growth in ad and circulation revenue: HMVL registered a double-digit

growth in advertising revenue, ie of 11% yoy to ~`152cr, on back of increase in
advertising yields and volumes. Further, the company reported an ~11% yoy
growth in circulation revenue to `51cr on back of higher circulation as well as
realization per copy.
Reuters Code
Despite flat operating margin, PAT grew ~27%: Despite a modest operating
performance, HMVL posted a growth of ~27% yoy to `37cr on the earnings front
for the quarter, owing to higher other income and lower taxes.
Outlook and valuation: Going forward, we believe that the company would
perform well, both on the top-line and bottom-line fronts on back of strong
recovery in the Indian economy. Further, we expect strong growth in both
advertising and circulation revenue due to the companys strong presence in the
states of Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. The Management has
also indicated that the company is focusing on operational efficiencies to ensure
revenue growth, thus leading to profit growth. Moreover, the company has a
strong balance sheet which would make HT Media more capable for future
expansion plans. Hence, we recommend a Buy rating on the stock with a target
price of `292.
258 / 120
Avg. Daily Volume
17,654
Face Value (`)
10
BSE Sensex
28,889
Nifty
8,730
HINS.BO
Bloomberg Code
HMVL@IN
Shareholding Pattern (%)

Promoters
75.0
MF / Banks / Indian Fls
13.1
FII / NRIs / OCBs
4.0
Indian Public / Others
7.9
Abs. (%)
Sensex
HMVL
3m
1yr
3yr
8.9
12.3
35.7
45.6
48.0
92.0
Key financials (Consolidated)

Y/E March (` cr)
FY2014
FY2015E
FY2016E
FY2017E
Net Sales
730
820
920
1,031
% chg
14.7
12.3
12.3
12.0
153
Net Profit (Adj.)
111
131
141
% chg
31.6
17.4
8.0
8.7
EBITDA margin (%)
20.7
20.0
20.0
20.0
EPS (`)
15.2
17.8
19.2
20.9
P/E (x)
11.6
16.0
13.6
12.6
P/BV (x)
2.9
2.4
2.1
1.8
RoE (%)
18.3
17.9
16.4
15.3
RoCE (%)
20.6
18.4
17.4
16.8
EV/Sales (x)
1.9
1.7
1.5
1.3
EV/EBITDA (x)
9.3
8.4
7.4
6.5
Please refer to important disclosures at the end of this report
Amarjeet S Maurya
022-39357800 Ext: 6831
amarjeet.maurya@angelbroking.com
Hindustan Media Ventures | 3QFY2015 Result Update
Exhibit 1: Quarterly performance

Y/E March (` cr)
Net Sales
Consumption of RM
(% of Sales)
Staff Costs
(% of Sales)
Operating Expense
3QFY15
3QFY14
% yoy
2QFY15
% qoq
9MFY2015
9MFY2014
% chg
207
189
9.7
200
3.7
616
546
12.9
87
81
7.6
85
2.4
258
220
17.5
41.9
42.7
41.9
40.3
25
22
80
65
12.0
11.6
13.0
11.9
42.5
14.1
26
(3.5)
12.9
55
49
(% of Sales)
26.7
26.2
Total Expenditure
167
152
9.9
160
Operating Profit
40
37
8.6
39
19.4
19.5
Interest
54.2
(11.4)
Depreciation
10.4
(5.9)
19
16
14.3
Other Income
16
10
56.7
12
33.6
41
20
104.1
PBT
48
40
18.9
42
13.7
136
118
15.9
23.0
21.2
22.1
21.5
OPM (%)
(% of Sales)
Provision for Taxation
11
11
23.1
28.0
37
29
17.7
15.3
Reported PAT
37
29
Equity shares (cr)
7.3
7.3
FDEPS (`)
5.0
3.9
(% of PBT)
11.8
50
10.6
23.8
156
143
25.3
26.3
4.0
494
428
15.5
2.5
122
118
3.7
19.8
21.6
25.0
19.6
21.0
(2.1)
10
5.9
24.8
Minority Interest
Recurring PAT
PATM
27.1
31
16.3
15.8
Exceptional items
January 21, 2015
27.1
31
34
34
25.2
28.6
102
84
16.5
15.4
8.6
2.3
21.3
16.3
102
84
21.3
16.3
13.9
11.5
21.3
7.3
27.1
4.3
Top-line driven by healthy growth in Ad and circulation

revenue
For 3QFY2015, HMVL reported a healthy growth of ~10% yoy in its top-line to
`207cr (excluding other income), owing to growth in advertising and circulation
revenue. Overall, the company registered a ~11% yoy growth in advertising
revenue to `152cr, primarily due to increase in advertising yields and volumes.
Further, the company reported a ~11% yoy growth in circulation revenue to `51cr
on back of higher circulation and realization per copy. Going forward, the
Management expects growth in the advertising segment to likely improve with
improving market sentiments, a stable government at the center, increasing
prosperity and rise in consumption in rural areas. Moreover, the company expects
an improvement in circulation revenue owing to its strong presence in the states of
Uttar Pradesh and Uttarakhand, and continuing dominance in Bihar and
Jharkhand.
250
20
200
15
10
150
5
100
50
Net Sales
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
(5)
3QFY13
(%)
(` cr)
Exhibit 2: Top-line growth trend
(10)
QoQ growth (%)
Operating margin remains flat due to higher employee costs

and other expenses
The company reported an operating profit of ~`40cr in 3QFY2015 (up
~9% yoy). The operating margin contracted by a significant 18bp yoy on account of
higher employee costs as a percentage of sales (up 47bp yoy due to impact of new
hiring, increments and a charge for regulatory compliance) and other expenses as a
percentage of sales (up 51bp yoy). Going forward, the Management expects margins
to be better due to lower news print costs and effective cost management strategy.
January 21, 2015
25
50
45
40
35
30
25
20
15
10
5
0
20
(%)
15
10
5
Operating Profit
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
(` cr)
Exhibit 3: Operating profit and margin trend
Margin (%)
Despite the flat operating margin, PAT grew ~27%

In 3QFY2015, despite a modest operating performance, HMVL posted a growth of
~27% yoy to `37cr on the earnings front owing to higher other income which
came in at ~`16cr in 3QFY2015 as against `10cr in 3QFY2014, and due to
lower taxes (tax rate was down 494bp yoy).
Exhibit 4: Net Profit and growth trend

40
40
35
30
30
20
10
20
15
(%)
(` cr)
25
(10)
10
Net Profit
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
(30)
1QFY14
4QFY13
(20)
3QFY13
QOQ growth (%)
January 21, 2015
Investment rationale
Robust advertising revenue growth expected to continue
The combination of increase in advertising volume as well as yield has resulted in
a strong double-digit advertising revenue growth for the company in the last few
quarters. The company reported a double-digit advertising revenue growth in Bihar
and Jharkhand and strong growth in advertising revenue in Uttar Pradesh, which
has resulted in a robust top-line growth for FY2014.
According to the Management, a double-digit advertising revenue growth is likely
to continue, considering good gains in readership share, especially in Uttar
Pradesh and on expectations of an improvement in the Indian economy.
Consistent double digit growth in circulation revenue

The company continues to consistently report double-digit growth in circulation
revenue aided by increase in circulation volume and higher realization per copy.
At the end of FY2014, realization per copy stood at `2.1, an increase of 12.4%
yoy. However, with the recent entry of DB Corp in the Bihar region with a Patna
edition and the resultant cover price war, realization per copy for HMVL might
remain subdued. But the Management believes that increase in circulation volumes
in Bihar and Uttar Pradesh will enable the company to post healthy circulation
revenues.
Outlook and valuation

Going forward, we believe that the company would perform well, both on the topline and bottom-line fronts on back of strong recovery in the Indian economy.
Further, we expect strong growth in both advertising and circulation revenue due to
the companys strong presence in the states of Uttar Pradesh, Uttarakhand, Bihar
and Jharkhand. The Management has also indicated that the company is focusing
on operational efficiencies to ensure revenue growth which would further lead to
profit growth. Moreover, the company has a strong balance sheet which would
make HT Media more capable for future expansion plans. Hence, we recommend
a Buy rating on the stock with a target price of `292.
January 21, 2015
Exhibit 5: One-year forward P/E band

500
8x
12x
16x
20x
24x
450
Share Price (`)
400
350
300
250
200
150
100
50
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Company Background
Hindustan Media Ventures Ltd is one of the leading print media companies in
India in terms of readership. The company publishes and prints 'Hindustan', the
third largest daily newspaper in India in terms of readership with a readership of
9.9mn readers. 'Hindustan' has the largest readership in key Hindi-speaking
markets of Bihar and Jharkhand, with a strong and growing presence in Delhi
NCR and the states of Uttar Pradesh and Uttarakhand. 'Hindustan' is one of the
fastest growing Hindi daily newspapers in India.
January 21, 2015
Profit and Loss Statement

Y/E March (` cr)
FY12
FY13
FY14
FY15E
FY16E
FY17E
Total operating income
597
636
730
820
920
1,031
% chg
15.6
6.6
14.7
12.3
12.3
12.0
Total Expenditure
501
524
578
656
736
825
Cost of Materials
257
265
300
334
377
424
Personnel
Others
80
87
116
129
145
179
191
206
230
256
EBITDA
95
113
151
164
184
206
% chg
9.1
18.1
34.4
8.4
12.3
11.7
16.0
17.7
20.7
20.0
20.0
20.0
Depreciation& Amortisation
19
22
22
26
31
35
EBIT
76
91
130
138
153
171
(% of Net Sales)
% chg
(% of Net Sales)
Interest & other Charges
Other Income
(% of PBT)
Share in profit of Associates
Recurring PBT
% chg
Prior Period & Extra. Exp./(Inc.)
PBT (reported)
Tax
7.0
19.7
42.7
6.2
11.1
11.6
12.7
14.3
17.8
16.8
16.6
16.6
12
13
14
19
28
31
53
53
53
20.8
25.0
19.8
29.6
27.4
25.3
92
114
155
179
193
210
20.4
24.3
35.5
15.7
8.0
8.7
92
114
155
179
193
210
26
30
43
48
52
57
28.8
25.9
28.0
27.0
27.0
27.0
65
85
111
131
141
153
Add: Share of earnings of asso.
Less: Minority interest (MI)
PAT after MI (reported)
65
85
111
131
141
153
ADJ. PAT
65
85
111
131
141
153
% chg
21.9
29.3
31.6
17.4
8.0
8.7
(% of Net Sales)
11.0
13.3
15.2
15.9
15.3
14.9
8.9
11.5
15.2
17.8
19.2
20.9
8.9
11.5
15.2
17.8
19.2
20.9
21.9
29.3
31.6
17.4
8.0
8.7
(% of PBT)
PAT (reported)
Basic EPS (`)

Fully Diluted EPS (`)
% chg
January 21, 2015
73
171
Balance sheet
Y/E March (` cr)
FY12
FY13
FY14
FY15E
FY16E
FY17E
SOURCES OF FUNDS
Equity Share Capital
73
73
73
73
73
73
Reserves& Surplus
361
435
536
656
786
927
Shareholders Funds
434
508
609
729
859
1,000
Minority Interest
Total Loans
Deferred Tax Liability
Total Liabilities
26
20
20
20
20
12
13
13
13
13
13
472
525
643
762
892
1,033
229
242
254
299
349
399
43
64
85
111
142
177
186
178
169
188
207
223
APPLICATION OF FUNDS
Gross Block
Less: Acc. Depreciation
Net Block
Capital Work-in-Progress
11
11
11
11
Investments
213
278
369
369
369
369
Current Assets
175
172
225
328
440
568
Inventories
32
32
33
40
50
62
Sundry Debtors
78
79
93
110
129
147
Cash
44
28
26
55
76
102
Loans & Advances
22
27
65
98
138
175
Other Assets
25
46
82
116
110
138
140
141
144
Net Current Assets
59
61
87
188
299
424
Deferred Tax Asset
Mis. Exp. not written off
472
525
643
762
892
1,033
Current liabilities
Total Assets
January 21, 2015
Cashflow
Y/E March (` cr)
FY12
FY13
FY14
FY15E
FY16E
FY17E
Profit before tax
92
114
155
179
193
210
Depreciation
19
22
22
26
31
35
Change in Working Capital
(13)
(12)
(72)
(89)
(100)
Interest / Dividend (Net)
(14)
(23)
12
13
14
Direct taxes paid
(24)
(28)
(43)
(48)
(52)
(57)
13
(20)
Others
Cash Flow from Operations
72
81
113
96
96
101
(Inc.)/ Dec. in Fixed Assets
(35)
(27)
(45)
(50)
(50)
(Inc.)/ Dec. in Investments
(24)
(65)
(91)
Cash Flow from Investing
(59)
(58)
(117)
(45)
(50)
(50)
Issue of Equity
Inc./(Dec.) in loans
(23)
17
(0)
Dividend Paid (Incl. Tax)
(7)
(9)
(9)
(10)
(11)
(12)
Interest / Dividend (Net)
(4)
(6)
(7)
(12)
(13)
(14)
Cash Flow from Financing
(5)
(38)
(23)
(24)
(26)
(15)
(2)
29
22
25
Opening Cash balances
36
44
28
26
55
76
Closing Cash balances
44
28
26
55
76
102
Inc./(Dec.) in Cash
January 21, 2015
Key ratios
Y/E March
FY12
FY13
FY14
FY15E
FY16E
FY17E
P/E (on FDEPS)
27.2
21.0
16.0
13.6
12.6
11.6
P/CEPS
Valuation Ratio (x)

21.0
16.7
13.4
11.3
10.3
9.5
P/BV
4.1
3.5
2.9
2.4
2.1
1.8
Dividend yield (%)
0.5
0.5
0.5
0.6
0.6
0.7
EV/Sales
2.6
2.3
1.9
1.7
1.5
1.3
16.2
13.1
9.3
8.4
7.4
6.5
2.6
2.3
1.8
1.5
1.3
1.1
EPS (Basic)
8.9
11.5
15.2
17.8
19.2
20.9
EPS (fully diluted)
8.9
11.5
15.2
17.8
19.2
20.9
11.6
14.5
18.1
21.3
23.4
25.6
EV/EBITDA
EV / Total Assets
Per Share Data (`)
Cash EPS
DPS
1.2
1.2
1.2
1.4
1.5
1.7
59.1
69.3
83.0
99.4
117.0
136.2
RoCE
16.5
17.8
20.6
18.4
17.4
16.8
Angel RoIC (Pre-tax)
37.2
44.3
55.2
42.3
35.3
31.1
RoE
15.1
16.6
18.3
17.9
16.4
15.3
Asset Turnover
3.2
3.6
4.3
4.4
4.4
4.6
Inventory / Sales (days)
19
19
16
18
20
22
Receivables (days)
48
45
47
49
51
52
Payables (days)
40
35
38
35
33
30
Net WC (days)
27
29
25
32
38
44
Book Value
Returns (%)
Turnover ratios (x)
January 21, 2015
10
Research Team Tel: 022 - 39357800
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking
or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or
in the past.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the
latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may
have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement

1. Analyst ownership of the stock
HMVL
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):
January 21, 2015
Buy (> 15%)

Reduce (-5% to 15%)
Accumulate (5% to 15%)

Sell (< -15%)
Neutral (-5 to 5%)
11

Hindustan Media Ventures: Performance Highlights

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Hindustan Media Ventures: Performance Highlights

Загружено:

Авторское право:

Доступные форматы

3QFY2015 Result Update | Media

January 21, 2015