3QFY2019 Result Update | Media
January 31, 2019
Music Broadcast
BUY
CMP
`293
Performance Update
Target Price
`475
Y/E March (` cr)
3QFY19
3QFY18
% yoy
2QFY19
% qoq
Investment Period
12 month
Net sales
87
76
14.2
80
8.6
EBITDA
29
23
22.6
27
7.7
EBITDA margin (%)
32.9
30.6
225bp
33.1
(28bp)
Stock Info
Adjusted PAT
16
12
37.9
13
22.4
Sector
Media
Source: Company, Angel Research
Market Cap (Rs cr)
1,600
Net Debt
(182)
For 3QFY2019, Music Broadcast (MBL) posted in-line with expectation results both
Beta
0.9
on top-line and bottom-line fronts. Revenues grew by ~14% yoy to `87cr on the
52 Week High / Low
408/267
back of price hike. The company’s operating margins improved by robust 225bps
Avg. Daily Volume
2,655
yoy. On the bottom-line front, MBL reported lower growth of ~38% yoy to `16cr
Face Value (Rs)
10
on the back of higher taxes during the quarter.
BSE Sensex
36,253
Nifty
10,829
Top-line grew ~14% yoy: MBL’s top-line grew by ~14% yoy to `87cr on the back
Reuters Code
MUSI.NS
of 11% ad rate hikes in legacy stations and improvement in utilization levels of 11
Bloomberg Code
RADIOCIT@IN
new stations. Going forward, we expect strong growth on top-line and bottom-
line fronts owing to elections.
Shareholding Pattern (%)
Promoters
73.7
Strong operating performance aids profitability: On the operating front, the
MF / Banks / Indian Fls
8.3
FII / NRIs / OCBs
2.4
company reported better margins, up 225bps yoy at 32.9% due improvement in
Indian Public / Others
15.6
utilization. On the bottom-line front, MBL reported growth of ~38% yoy to `16cr
on the back of higher revenue growth and better margin improvement during the
Abs. (%)
3m 1yr
3yr
Sensex
5.0
(1.2)
43.4
quarter.
MBL
(14.0)
(25.4)
NA
Outlook and Valuation: We expect MBL to report net revenue CAGR of ~11% to
~`370cr over FY2018-20E mainly due to increase in advertising rates and
improvement in utilization of new radio stations. Further, on the bottom-line front,
Historical share price chart
we expect CAGR of ~18% to`72cr over the same period on the back of better
500
margins. Moreover, considering sustainable growth opportunities over the next 5-
450
400
7 years, most of the capex already through and strong parentage, we have a
350
positive outlook on the company. Thus, we maintain our Buy recommendation on
300
250
MBL with Target Price of `475.
200
150
100
Key Financials
50
Y/E March (` cr)
FY2017
FY2018
FY2019E
FY2020E
0
Net sales
271
298
331
370
% chg
20.4
9.9
10.9
12.0
Adj. Net profit
36
52
62
72
Source: Company, Angel Research
% chg
30.3
45.4
20.6
15.7
EBITDA margin (%)
33.6
32.6
34.1
34.8
EPS (`)
6.2
9.1
10.9
12.6
Research Analyst
P/E (x)
47.0
32.3
26.8
23.2
Amarjeet S Maurya
P/BV (x)
3.0
2.8
2.6
2.4
RoE (%)
6.5
8.6
9.6
10.2
022-40003600 Ext: 6831
RoCE (%)
10.1
10.9
12.6
13.8
EV/EBITDA (x)
15.3
14.4
12.4
10.9
Source: Company, Angel Research Note
Please refer to important disclosures at the end of this report
1
Music Broadcast Ltd| 3QFY2019 Result Update
Exhibit 1: 3QFY2019 Performance
Y/E March (` cr)
3QFY19
3QFY18
% yoy
2QFY19
% qoq
9MFY19
9MFY18
% chg
Net Sales
87
76
14.2
80
8.6
243
222
9.2
Staff Costs
17
18
(5.0)
18
(6.6)
53
52
1.5
(% of Sales)
19.2
23.1
22.3
21.7
23.3
Other Expenses
42
35
18.3
36
16.9
109
101
8.2
(% of Sales)
47.9
46.3
44.5
44.9
45.3
Total Expenditure
58
53
10.5
54
9.0
162
153
5.9
Operating Profit
29
23
22.6
27
7.7
81
70
16.5
OPM
32.9
30.6
33.1
33.4
31.4
Interest
1
4
(65.1)
1
(0.7)
4.1
11.6
(64.5)
Depreciation
7
7
3.5
7
0.9
20
20
3.1
Other Income
4
4
3.0
4
23.9
10.5
14.0
(25.0)
PBT (excl. Ext Items)
25
17
44.9
22
12.9
67
53
28.3
Ext (Income)/Expense
-
-
-
-
-
PBT (incl. Ext Items)
25
17
44.9
22
12.9
67
53
28.3
(% of Sales)
28.6
22.6
27.6
27.7
23.6
Provision for Taxation
9
5
60.7
9
(1.7)
24
17
41.5
(% of PBT)
34.3
30.9
39.4
35.8
32.5
Reported PAT
16
12
37.9
13
22.4
43
35
22.0
PATM
18.8
15.6
16.7
17.8
15.9
Minority Interest After NP
Reported PAT
16
12
37.9
13
22.4
43
35
22.0
Equity shares (cr)
6
6
6
6
6
FDEPS (Rs)
2.9
2.1
37.9
2.3
22.4
7.6
6.2
22.0
Source: Company, Angel Research
January 31, 2019
2
Music Broadcast Ltd| 3QFY2019 Result Update
Outlook and Valuation: We expect MBL to report net revenue CAGR of ~11% to
~`370cr over FY2018-20E mainly due to increase in advertising rates and
improvement in utilization of new radio stations. Further, on the bottom-line front,
we expect CAGR of ~18% to`72cr over the same period on the back of better
margins. Moreover, considering sustainable growth opportunities over the next 5-7
years, most of the capex already through and strong parentage, we have a positive
outlook on the company. Thus, we maintain our Buy recommendation on MBL with
Target Price of `475.
Downside risks to our estimates
Slowdown in Indian economy would impact overall ad spends: A slowdown in the
economy could affect spending from the clients, which in turn would affect the
company’s overall earnings.
Increase in content price: Inability to effectively source music content from third
party music production entities/associations can increase the input costs for the
company, and hence, may result in the dip in margins.
Reduction in listenership numbers: Rising acceptance of data and continuous
reduction in the cost of data could lead to shift of listenership to digital
platform/mobile applications (Hungama, Saavn, Gaana) and options to download
could risk the listenership in Metros and key towns initially.
Company Background
Music Broadcast Limited (MBL) owns and operates FM radio stations under the
brand names Radio City and Radio Mantra. The company has 39 radio stations
and operates its radio stations in 37 Indian cities. Radio City is present in 12 out of
the top 15 cities in India by population. Radio City has been ranked Number One
in Mumbai, Bengaluru and Delhi in terms of number of listeners and has a total
number of 49.60mn listeners across all 23 cities (according to AZ Research). Music
Broadcast Limited operates as a subsidiary of Jagran Prakashan Limited. It also
operates 40 Web radio stations that offer Internet radio with live RJ hosted shows
through Planet Radio City in 8 languages. In addition, Music Broadcast Limited
operates 'Planet Radio City' mobile app that plays various stations such as 'Radio
City Freedom', 'Radio City Electronica', 'Radio City Metal', and 'Radio City Smaran'
in various languages on mobile and other smart devices.
January 31, 2019
3
Music Broadcast Ltd| 3QFY2019 Result Update
Profit & Loss Statement
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E
FY2020E
Total operating income
225
271
298
331
370
% chg
12.3
20.4
9.9
10.9
12.0
Total Expenditure
147
180
201
218
242
License fees
17
19
21
23
26
Personnel
51
65
69
75
84
Others Expenses
79
96
111
119
131
EBITDA
78
91
97
113
129
% chg
25.4
16.8
6.4
16.2
14.3
(% of Net Sales)
34.7
33.6
32.6
34.1
34.8
Depreciation& Amortisation
17
20
26
27
28
EBIT
61
72
71
86
100
% chg
31.8
16.5
(1.1)
21.3
17.1
(% of Net Sales)
27.2
26.4
23.7
26.0
27.1
Interest & other Charges
21
19
15
5
5
Other Income
15
4
19
12
12
(% of PBT)
27
8
26
13
11
Extraordinary Items
0
1
-
-
-
Share in profit of Associates
Recurring PBT
56
57
75
93
108
% chg
17.9
2.7
31.9
23.7
15.7
Tax
14
20
24
31
36
PAT (reported)
27
36
52
62
72
% chg
(42.0)
30.3
45.4
20.6
15.7
(% of Net Sales)
12.1
13.1
17.3
18.8
19.5
Basic & Fully Diluted EPS (Rs)
4.8
6.2
9.1
10.9
12.6
% chg
(42.0)
30.3
45.4
20.6
15.7
January 31, 2019
4
Music Broadcast Ltd| 3QFY2019 Result Update
Balance Sheet
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
SOURCES OF FUNDS
Equity Share Capital
42
57
57
57
57
Reserves& Surplus
168
491
543
593
650
Shareholders Funds
210
548
600
650
707
236
168
54
34
24
Total Loans
446
717
653
683
731
Total Liabilities
APPLICATION OF FUNDS
Net Block
230
312
297
328
305
Capital Work-in-Progress
66
0
0
0
0
15
27
156
156
156
Investments
Current Assets
113
385
208
213
287
Inventories
0
0
0
0
0
Sundry Debtors
22
33
22
27
30
Cash
16
280
76
77
135
0
0
0
0
0
Loans & Advances
Other Assets
21
23
22
26
30
Current liabilities
44
45
45
51
54
Net Current Assets
69
340
163
162
233
Other Non-Current Asset
66
38
37
37
37
Total Assets
446
717
653
683
731
January 31, 2019
5
Music Broadcast Ltd| 3QFY2019 Result Update
Consolidated Cashflow Statement
Y/E March (` cr)
FY2016 FY2017 FY2018 FY2019E FY2020E
Profit before tax
56
57
75
93
108
Depreciation
17
20
26
27
28
Change in Working Capital
11
21
(26)
3
(13)
Interest / Dividend (Net)
19
19
15
5
5
Direct taxes paid
(11)
(20)
(24)
(31)
(36)
Others
(26)
-
-
-
-
Cash Flow from Operations
66
97
67
97
92
(Inc.)/ Dec. in Fixed Assets
(286)
(35)
(20)
(50)
(5)
(Inc.)/ Dec. in Investments
217
(12)
(129)
-
-
Cash Flow from Investing
(69)
(47)
(149)
(50)
(5)
Issue of Equity
-
303
(2)
-
-
Inc./(Dec.) in loans
83
(123)
-
(20)
(10)
Others
(111)
38
(128)
(17)
(19)
Cash Flow from Financing
(28)
218
(130)
(37)
(29)
Inc./(Dec.) in Cash
(31)
268
(212)
10
58
Opening Cash balances
43
13
280
68
77
Closing Cash balances
13
280
68
77
135
January 31, 2019
6
Music Broadcast Ltd| 3QFY2019 Result Update
Key Ratio
Y/E March
FY2016
FY2017
FY2018
FY2019E FY2020E
Valuation Ratio (x)
P/E (on FDEPS)
61.3
47.0
32.3
26.8
23.2
P/CEPS
38.0
30.3
21.4
18.7
16.6
P/BV
8.0
3.0
2.8
2.6
2.4
Dividend yield (%)
0.0
0.0
0.0
0.7
0.9
EV/Sales
6.2
5.2
4.7
4.2
3.8
EV/EBITDA
17.9
15.3
14.4
12.4
10.9
EV / Total Assets
3.1
2.0
2.1
2.0
1.9
Per Share Data (Rs)
EPS (Basic)
4.8
6.2
9.1
10.9
12.6
EPS (fully diluted)
4.8
6.2
9.1
10.9
12.6
Cash EPS
7.7
9.7
13.7
15.6
17.6
DPS
0.0
0.0
0.0
2.2
2.5
Book Value
36.8
96.1
105.1
113.9
124.0
Returns (%)
ROCE
16.0
10.1
10.9
12.6
13.8
Angel ROIC (Pre-tax)
17.5
17.5
16.8
19.1
22.9
ROE
13.0
6.5
8.6
9.6
10.2
Turnover ratios (x)
Inventory / Sales (days)
-
-
-
-
-
Receivables (days)
123
110
135
120
120
Payables (days)
36
44
27
30
30
Working capital cycle (ex-cash) (days)
87
66
108
90
90
January 31, 2019
7
Music Broadcast Ltd| 3QFY2019 Result Update
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for
accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed
public offering of securities of the company covered by Analyst during the past twelve months.
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.
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. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any
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 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 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 Limited endeavors 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.
Neither Angel Broking 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.
Disclosure of Interest Statement
Music Broadcast
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
Ratings (Returns):
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Reduce (-5% to -15%)
Sell (< -15%)
January 31, 2019
8
