2QFY2019 Result Update | Media
November 6, 2018
TV Today Network
BUY
CMP
`380
Performance Update
Target Price
`498
Y/E March (` cr)
2QFY19
2QFY18
% yoy 1QFY19
% qoq
Investment Period
12 Months
Net sales
163
158
3.5
182
(10)
EBITDA
45
50
(10.5)
64
(30)
Stock Info
EBITDA margin (%)
27.3
31.6
(428bp)
35.0
(763bp)
Sector
Media
Adjusted PAT
30
31
(5.7)
41
(28)
Market Cap (` cr)
2,237
Source: Company, Angel Research
Net Debt (` cr)
(199)
For 2QFY2019, TV Today Network Ltd (TTNL) posted results below our
Beta
1.3
expectations on both top-line as well as bottom-line fronts. Revenue grew by
52 Week High / Low
558/342
3.5% yoy to `163cr due to subdued ad revenue growth. On the operating front,
Avg. Daily Volume
4,930
margins contracted by 428bp yoy, which resulted in PAT de-growth of ~6% yoy
Face Value (`)
5
to `30cr.
BSE Sensex
35,126
Lower ad spend drags the overall top-line growth: The company’s top-line grew
Nifty
10,573
by 3.5% yoy to `163cr due to subdued ad revenue growth (flat growth 0.2%
Reuters Code
TVTO.BO
yoy to `140cr). However, the company has reported strong growth in radio
Bloomberg Code
TVTN.IN
segment (`6cr vs. ~`4cr in 2QFY18).
Subdued top-line and poor operating performance drags the overall PAT
Shareholding Pattern (%)
growth: On the operating front, margins contracted by 428bps yoy, which
Promoters
57.4
resulted into strong PAT de-growth by ~6% yoy to `30cr. Segment wise,
MF / Banks / Indian Fls
13.6
advertisement business witnessed EBIT margin contraction of 54bps. Further,
FII / NRIs / OCBs
11.4
radio business reported EBIT level loss of `4cr vs. `3cr (loss) in 2QFY18.
Indian Public / Others
17.6
Outlook and Valuation: Going forward, we expect TTNL to report net revenue
CAGR of ~12% over FY2018-20E to ~`897cr and net profit CAGR of ~13%
Abs.(%)
3m
1yr
3yr
over the same period to `164cr on the back of leadership position in Hindi
news genre, upcoming election and strong festive season. TTNL is a debt free
Sensex
(7.3)
3.6
32.9
company with `199cr cash on balance sheet. At the current market price of
TTNL
(10.0)
0.9
59.0
`380, the stock trades at a PE of 15.3x and 13.9x its FY2019E and FY2020E
EPS of `24.9 and `27.4, respectively. We recommend BUY with target price of
3-year price chart
`498.
600
500
Key financials
400
Y/E March (` cr)
FY2017
FY2018
FY2019E
FY2020E
300
Net sales
652
721
815
897
200
% chg
12.2
10.5
13.1
10.0
100
Net profit
100
119
148
164
% chg
21.5
34.7
16.1
10.1
0
EBITDA margin (%)
24.9
26.9
28.5
28.9
EPS (`)
15.9
21.4
24.9
27.4
P/E (x)
23.9
17.7
15.3
13.9
Source: Company, Angel Research
P/BV (x)
4.0
3.4
2.9
2.9
RoE (%)
17.6
18.0
18.7
21.3
RoCE (%)
22.1
24.5
24.8
28.5
Amarjeet S Maurya
EV/Sales (x)
3.1
2.9
2.4
2.2
022-39357800 Ext: 6831
EV/EBITDA (x)
12.5
10.7
8.5
7.8
Source: Company, Angel Research, Note: CMP as of November 5, 2018
Please refer to important disclosures at the end of this report
1
TV Today Network | 2QFY2019 Result Update
Exhibit 1: 2QFY2019 Performance
Y/E March (` cr)
2QFY19
2QFY18
% yoy
1QFY19
% qoq
1HFY19
1HFY18
% chg
Net Sales
163
158
3.5
182
(10.2)
345
322
7.0
Raw Material Consumed
Staff Costs
52
48
9.5
52
(0.8)
105
93
12.4
(% of Sales)
31.9
30.1
176
28.9
302
30.3
28.8
144
Other Expenses
67
60
10.3
66
1.2
132
146
(9.0)
(% of Sales)
40.8
38.3
253
36.2
462
38.4
45.1
(677)
Total Expenditure
119
108
10.0
118
0.3
237
239
(0.7)
Operating Profit
45
50
(10.5)
64
(29.8)
108
84
28.9
OPM
27.3
31.6
35.0
31.3
26.0
Interest
0
0
(63.6)
0
(76.5)
0
0
(32.3)
Depreciation
8
8
(2.3)
8
1.4
16
16
0.2
Other Income
8
5
63.3
7
11.4
16
10
57.2
PBT (excl. Ext Items)
45
47
(3.8)
63
(28.7)
108
78
38.6
Ext (Income)/Expense
-
-
-
-
PBT (incl. Ext Items)
45
47
(3.8)
63
(28.7)
108
78
38.6
(% of Sales)
27.5
29.6
34.7
31.3
24.2
Provision for Taxation
15
15
22
38
26
45.5
(% of PBT)
34.4
33.0
35.0
34.7
33.1
Reported PAT
30
31
(5.7)
41
(28.0)
70
52
35.2
PATM
18.1
19.8
22.5
20.4
16.2
Minority Interest After NP
Extra-ordinary Items
(9)
Reported PAT
30
31
(5.7)
41
(28.0)
70
61
15.0
PATM
18.1
19.8
22.5
20.4
19.0
Source: Company, Angel Research
November 06, 2018
2
TV Today Network | 2QFY2019 Result Update
Key investment arguments
Strong viewership in Hindi and English news genre
TTNL has strong viewership ranking among the Hindi and English news channels.
The company’s Hindi news genre - Aaj Tak, continued to maintain its leadership
position for several consecutive years, ranks No. 1 in its viewership ranking. Aaj Tak
continues to dominate by being the channel of choice during key events like national
and international events, etc. Further, TTNL’s English news genre - India Today has
been continuously gaining viewership ranking. Moreover, the company’s other
channels like Dilli Aaj Tak & TEZ are also popular among the viewers. The
company’s more than 90% revenue comes from Aaj Tak and India Today channel.
TV industry growth of ~16% CAGR over CY2014-19E to aid TTNL’s
performance
Going forward, we expect the TV ad growth to report 16% CAGR over CY2014-19E
on the back of an increase in ad spends by corporate sector, government and
emergence of e-commerce as a significant new category coupled with an
improvement in subscription revenue (due to digitization of phase 3 & 4).
Outlook and Valuation
Going forward, we expect TTNL to report net revenue CAGR of ~12% over FY2018-
20E to ~`897cr and net profit CAGR of ~13% over the same period to `164cr on
the back of leadership position in Hindi news genre, upcoming election and strong
festive season. TTNL is a debt free company with `199cr cash on balance sheet. At
the current market price of `380, the stock trades at a PE of 15.3x and 13.9x its
FY2019E and FY2020E EPS of `24.9 and `27.4, respectively. We recommend BUY
with target price of `498.
Risks
1) Losing leadership position in viewership ranking could affect the company’s
advertisement revenue, and hence poses a downside risk to our estimates.
2)
Overall slowdown in the Indian economy could impact the advertisement
spend, which could be negative for TTNL.
3) Delay in digitalization could impact the company’s subscription revenue
growth.
Company Background
TV Today Network (TTNL) is one of the leading Indian Hindi and English news
television networks. The company's operating segments include television (TV)
broadcasting and radio broadcasting. The company operates four news channels,
which include Aaj Tak, India Today (earlier know as Headlines Today), TEZ and Dilli
Aaj Tak. The company is also engaged in publishing, and its publications include
India Today, Business Today, etc. Moreover, TTNL is associated with well know
anchors like Rajdeep Sardesai and Karan Thapar. Living Media India Limited is the
holding company of TTNL.
November 06, 2018
3
TV Today Network | 2QFY2019 Result Update
Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2019E
Total operating income
582
652
721
815
897
% chg
22.0
12.2
10.5
13.1
10.0
Total Expenditure
450
490
527
583
638
Employee Cost
153
181
202
212
233
Selling & Administrative Expenses
-
-
-
-
-
Others Expenses
297
309
325
371
404
EBITDA
131
163
194
232
259
% chg
(0.2)
23.7
19.2
19.9
11.5
(% of Net Sales)
22.6
24.9
26.9
28.5
28.9
Depreciation& Amortisation
31
29
31
36
39
EBIT
100
134
162
197
220
% chg
(1.1)
33.0
21.5
21.0
12.1
(% of Net Sales)
17.3
20.5
22.5
24.1
24.6
Interest & other Charges
6
8
4
-
-
Other Income
21
29
25
25
25
(% of PBT)
18.0
19.0
13.5
11.3
10.2
Share in profit of Associates
-
-
-
-
-
Recurring PBT
115
155
183
222
245
% chg
(6.7)
34.8
18.6
20.8
10.8
Prior Period & Extraordinary Expense/(Inc.)
-
-
-
-
-
PBT (reported)
115
155
183
222
245
Tax
53
54
64
73
81
(% of PBT)
46.1
35.0
35.1
33.0
33.0
PAT (reported)
62
100
119
148
164
Add: Share of earnings of associate
-
-
-
-
-
ADJ. PAT
62
100
119
148
164
% chg
(3.6)
21.5
34.7
16.1
10.1
(% of Net Sales)
10.6
15.4
16.5
18.2
18.3
Basic EPS (`)
13.1
15.9
21.4
24.9
27.4
Fully Diluted EPS (`)
13.1
15.9
21.4
24.9
27.4
% chg
(3.6)
21.5
34.7
16.1
10.1
November 06, 2018
4
TV Today Network | 2QFY2019 Result Update
Consolidated Balance Sheet
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
SOURCES OF FUNDS
Equity Share Capital
30
30
30
30
30
Reserves& Surplus
442
540
632
763
743
Shareholders Funds
472
570
662
792
773
Total Loans
46
35
-
-
-
Deferred Tax Liability
7
8
11
11
11
Total Liabilities
525
613
673
803
784
APPLICATION OF FUNDS
Gross Block
245
257
343
373
403
Less: Acc. Depreciation
30
59
85
121
159
Net Block
214
199
258
252
244
Capital Work-in-Progress
5
3
2
2
2
Investments
7
6
-
-
-
Current Assets
406
525
560
720
729
Sundry Debtors
151
163
185
217
246
Cash
170
263
199
298
252
Loans & Advances
57
61
70
82
94
Other Assets
27
36
104
122
135
Current liabilities
130
143
173
196
216
Net Current Assets
277
382
387
524
513
Deferred Tax Asset
22
23
25
25
25
Mis. Exp. not written off
-
-
-
-
-
Total Assets
525
613
673
803
784
November 06, 2018
5
TV Today Network | 2QFY2019 Result Update
Consolidated Balance Sheet
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
Profit before tax
115
153
183
222
245
Depreciation
31
29
31
36
39
Change in Working Capital
(147)
(98)
(1)
(38)
(35)
Interest / Dividend (Net)
(6)
(10)
(1)
-
-
Direct taxes paid
(57)
(59)
(63)
(73)
(81)
Others
29
(2)
7
-
-
Cash Flow from Operations
(36)
14
158
146
168
(Inc.)/ Dec. in Fixed Assets
39
4
(93)
(30)
(30)
(Inc.)/ Dec. in Investments
38
1
6
-
-
Cash Flow from Investing
0
3
(99)
(30)
(30)
Issue of Equity
0
-
-
-
-
Inc./(Dec.) in loans
-
0
-
-
-
Dividend Paid (Incl. Tax)
(9)
(10)
(12)
(18)
(183)
Others
120
86
(47)
(63)
(1)
Cash Flow from Financing
111
76
(59)
(81)
(184)
Inc./(Dec.) in Cash
75
93
(0)
35
(46)
Opening Cash balances
95
170
263
263
298
Closing Cash balances
170
263
263
298
252
Source: Company, Angel Research
November 06, 2018
6
TV Today Network | 2QFY2019 Result Update
Key Ratios
Y/E March
FY2016 FY2017 FY2018 FY2019E FY2020E
Valuation Ratio (x)
P/E (on FDEPS)
29.0
23.9
17.7
15.3
13.9
P/CEPS
24.5
17.5
15.1
12.3
11.2
P/BV
4.8
4.0
3.4
2.9
2.9
Dividend yield (%)
0.4
0.5
0.7
0.8
8.1
EV/Sales
3.7
3.1
2.9
2.4
2.2
EV/EBITDA
16.2
12.5
10.7
8.5
7.8
EV / Total Assets
3.3
2.7
2.4
2.0
2.0
Per Share Data (Rs)
EPS (Basic)
13.1
15.9
21.4
24.9
27.4
EPS (fully diluted)
13.1
15.9
21.4
24.9
27.4
Cash EPS
15.5
21.7
25.2
30.9
34.1
DPS
1.6
1.9
2.6
3.0
30.7
Book Value
79.1
95.6
110.9
132.8
129.5
Returns (%)
ROCE
19.4
22.1
24.5
24.8
28.5
Angel ROIC (Pre-tax)
29.5
39.8
35.1
39.7
42.3
ROE
13.1
17.6
18.0
18.7
21.3
Turnover ratios (x)
Asset Turnover (Gross Block)
2.4
2.5
2.1
2.2
2.2
Inventory / Sales (days)
1
1
1
1
1
Receivables (days)
95
91
94
97
100
Payables (days)
46
49
44
44
44
Working capital cycle (ex-cash) (days)
50
44
50
54
57
Source: Company, Angel Research
November 06, 2018
7
TV Today Network | 2QFY2019 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
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Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
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Disclosure of Interest Statement
TV Today Network
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 (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15)
November 06, 2018
8
