Technology

For 2QFY2019, Music Broadcast (MBL) posted muted results both on top-line and bottom-line fronts. Revenues grew by ~5% yoy to `80cr on the back of equal contribution of volume and price hike. The company’s operating margins improved by robust 120bps yoy. On the bottom-line front, MBL reported lower growth of ~5% yoy to`13cr on the back of higher taxes during the quarter.

Outlook and Valuation: We expect MBL to report net revenue CAGR of ~12% to ~`374cr 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.

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