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For 3QFY2016, Hindustan Media Ventures Ltd (HMVL) reported earnings above our estimates. The top-line growth was healthy with strong growth in advertising and circulation revenue. Advertising revenue growth for the quarter was strong due to festive season and state elections in Bihar. On the operating front too, the company’s performance was strong, which in turn led to a higher PAT growth. Strong growth in ad and circulation revenue: HMVL registered a growth of ~19% yoy in advertising revenue to ~Rs181cr. This was on back of the festive season that fuelled advertising spends across most sectors, state elections in Bihar, as well as internal initiatives. Further, the company reported a ~6% yoy growth in circulation revenue to Rs54cr on back of higher circulation volume as well as realization per copy. Higher PAT on back of strong operating performance: The company reported a strong PAT growth of ~28% yoy on the back of a strong operating performance. The operating performance was strong on account of lower cost of news print which is a key raw material for HMVL. 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 company’s firm presence in the states of Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. Further, HT Media is hiving off its online content business to the company (HMVL). We are awaiting further clarifications on the deal from the Management in order to assess its financial implications. Until then, we retain our Neutral rating on the stock.Download Full Report
|Investment Period||12 Months|
|MCAP BSE (Rs in Cr)||2,227.75|
|MCAP NSE (Rs in Cr)||2,235.09|
|Div Yield (%)||0.40|
Shareholding Pattern (%)
|Public & Others||5.0|