3QFY2019 Result Update | Media
February 14, 2019
TV Today Network
BUY
CMP
`323
Performance Update
Target Price
`498
Y/E March (` cr)
3QFY19
3QFY18
% yoy
2QFY19
% qoq
Investment Period
12 Months
Net sales
199
188
6.3
163
22
EBITDA
62
60
2.1
45
38
Stock Info
EBITDA margin (%)
30.9
32.2
(127bp)
27.3
357bp
Sector
Media
Adjusted PAT
39
39
1.2
30
33
Market Cap (` cr)
1,949
Source: Company, Angel Research
Net Debt (` cr)
214
For 3QFY2019, TV Today Network Ltd (TTNL) posted results below our
expectations on both top-line as well as bottom-line fronts. Revenue grew by
Beta
1.1
6.3% yoy to `199cr due to subdued ad revenue growth. On the operating
52 Week High / Low
558/305
front, margins contracted by 127bps yoy, which resulted in flat PAT on yoy
Avg. Daily Volume
5,280
basis.
Lower ad spends drag the overall top-line growth: The company’s top-line
Face Value (`)
5
grew by 6.3% yoy to `199cr due to subdued ad revenue growth (up ~3.9%
BSE Sensex
36,034
yoy to `171cr). However, the company has reported decent growth in radio
Nifty
10,793
segment (`7cr vs. ~`6cr in 3QFY2018).
Reuters Code
TVTO.BO
Subdued top-line and poor operating performance impact PAT growth: On
the operating front, margins contracted by 127bps yoy, which resulted into
Bloomberg Code
TVTN.IN
flat PAT yoy at `39cr. Segment wise, advertisement business witnessed EBIT
margin contraction of 263bps yoy. However, radio business reported EBIT
level loss of `2cr yoy vs. `6cr (loss) in 3QFY2018.
Shareholding Pattern (%)
Outlook and Valuation: Going forward, we expect TTNL to report net revenue
Promoters
57.4
CAGR of ~11% over FY2018-20E to ~`880cr and net profit CAGR of ~12%
over the same period to `162cr on the back of leadership position in Hindi
MF / Banks / Indian Fls
14.3
news genre and upcoming elections. TTNL is a debt free company with decent
FII / NRIs / OCBs
13.8
cash on balance sheet. At the current market price of `323, the stock trades
at a PE of 13.2x and 12x its FY2019E and FY2020E EPS of `23.9 and `27.6
Indian Public / Others
14.5
respectively. We recommend BUY on TTNL with a Target Price of `498.
Key financials
Abs. (%)
3m
1yr
3yr
Y/E March (` cr)
FY2017
FY2018
FY2019E
FY2020E
Sensex
2.5
5.5
53.0
Net sales
652
721
786
880
% chg
12.2
10.5
9.0
12.0
TTNL
(13)
(27)
14.2
Net profit
100
119
146
162
3-year price chart
% chg
21.5
34.7
14.0
10.4
EBITDA margin (%)
24.9
26.9
29.0
29.0
600
EPS (`)
15.9
21.4
24.4
27.0
500
P/E (x)
20.3
15.1
13.2
12.0
400
P/BV (x)
3.4
2.9
2.4
2.5
300
RoE (%)
17.6
18.0
18.5
21.0
200
RoCE (%)
22.1
24.5
23.9
27.6
100
EV/Sales (x)
2.6
2.4
2.1
1.9
EV/EBITDA (x)
10.4
8.9
7.1
6.5
0
Source: Company, Angel Research, Note: CMP as of February 13, 2019
Source: Company, Angel Research
Amarjeet S Maurya
022-39357800 Ext: 6831
[email protected]
Please refer to important disclosures at the end of this report
1
TV Today Network | 3QFY2019 Result Update
Exhibit 1: 3QFY2019 Performance
Y/E March (` cr)
3QFY19
3QFY18
% yoy
2QFY19
% qoq
9MFY19
9MFY18
% chg
Net Sales
199
188
6.3
163
22.1
545
510
6.8
Staff Costs
55
50
10.3
52
6.4
160
143
11.6
(% of Sales)
27.8
26.8
99
31.9
(411)
29.4
28.1
128
Other Expenses
82
77
7.1
67
23.7
215
223
(3.5)
(% of Sales)
41.3
41.1
28
40.8
54
39.5
43.6
(418)
Total Expenditure
138
127
8.3
119
16.1
375
366
2.5
Operating Profit
62
60
2.1
45
38.1
170
144
17.7
OPM
30.9
32.2
27.3
31.2
28.3
Interest
0
0
(16.7)
0
25.0
0
0
(27.0)
Depreciation
8
8
(2.0)
8
(2.6)
23.5
23.6
(0.6)
Other Income
7
5
25.7
8
(21.1)
22.3
15.2
46.5
PBT (excl. Ext Items)
60
58
4.9
45
34.4
168
135
24.3
Ext (Income)/Expense
-
-
-
-
PBT (incl. Ext Items)
60
58
4.9
45
34.4
168
135
24.3
(% of Sales)
30.3
30.7
27.5
30.9
26.6
Provision for Taxation
21
19
15
58.7
44.6
31.5
(% of PBT)
35.1
32.8
34.4
34.9
32.9
Reported PAT
39
39
1.2
30
32.8
110
91
20.7
PATM
19.7
20.7
18.1
20.1
17.8
Minority Interest After NP
Extra-ordinary Items
(9)
Reported PAT
39
39
1.2
30
32.8
110
100
9.6
PATM
19.7
20.7
18.1
20.1
19.6
Source: Company, Angel Research
February 14, 2019
2
TV Today Network | 3QFY2019 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 i.e. Aaj Tak, has 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
national and international events. Further, TTNL’s English news genre i.e. India
Today has been continuously gaining viewership ranking. Moreover, the
company’s other channels like Dilli Aaj Tak and TEZ are also popular among the
viewers. The company’s more than 90% revenue comes from Aaj Tak and India
Today channels.
TV industry growth of ~16% CAGR over CY2014-19E to aid TTNL’s
performance
Going forward, we expect 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 ~11% over
FY2018-20E to ~`880cr and net profit CAGR of ~12% over the same period
to `162cr on the back of leadership position in Hindi news genre and
upcoming elections. TTNL is a debt free company with decent cash on balance
sheet. At the current market price of `323, the stock trades at a PE of 13.2x
and 12x its FY2019E and FY2020E EPS of `23.9 and `27.6 respectively. We
recommend BUY on TTNL with a 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
spends, 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.
February 14, 2019
3
TV Today Network | 3QFY2019 Result Update
Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
Total operating income
582
652
721
786
880
% chg
22.0
12.2
10.5
9.0
12.0
Total Expenditure
450
490
527
558
625
Employee Cost
153
181
202
204
229
Selling & Administrative Expenses
-
-
-
-
-
Others Expenses
297
309
325
354
396
EBITDA
131
163
194
228
255
% chg
(0.2)
23.7
19.2
17.6
12.0
(% of Net Sales)
22.6
24.9
26.9
29.0
29.0
Depreciation& Amortisation
31
29
31
39
43
EBIT
100
134
162
189
213
% chg
(1.1)
33.0
21.5
16.1
12.8
(% of Net Sales)
17.3
20.5
22.5
24.0
24.2
Interest & other Charges
6
8
4
-
-
Other Income
21
29
25
29
29
(% of PBT)
18.0
19.0
13.5
13.3
12.0
Share in profit of Associates
-
-
-
-
-
Recurring PBT
115
155
183
218
242
% chg
(6.7)
34.8
18.6
18.6
11.1
Prior Period & Extraordinary Expense/(Inc.)
-
-
-
-
-
PBT (reported)
115
155
183
218
242
Tax
53
54
64
72
80
(% of PBT)
46.1
35.0
35.1
33.0
33.0
PAT (reported)
62
100
119
146
162
Add: Share of earnings of associate
-
-
-
-
-
ADJ. PAT
62
100
119
146
162
% chg
(3.6)
21.5
34.7
14.0
10.4
(% of Net Sales)
10.6
15.4
16.5
18.5
18.4
Basic EPS (`)
13.1
15.9
21.4
24.4
27.0
Fully Diluted EPS (`)
13.1
15.9
21.4
24.4
27.0
% chg
(3.6)
21.5
34.7
14.0
10.4
February 14, 2019
4
TV Today Network | 3QFY2019 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
760
741
Shareholders Funds
472
570
662
790
771
Total Loans
46
35
-
-
-
Deferred Tax Liability
7
8
11
11
11
Total Liabilities
525
613
673
801
782
APPLICATION OF FUNDS
Gross Block
245
257
343
373
403
Less: Acc. Depreciation
30
59
85
124
167
Net Block
214
199
258
249
236
Capital Work-in-Progress
5
3
2
2
2
Investments
7
6
-
-
-
Current Assets
406
525
560
715
730
Sundry Debtors
151
163
185
209
241
Cash
170
263
199
307
262
Loans & Advances
57
61
70
79
92
Other Assets
27
36
104
118
132
Current liabilities
130
143
173
190
212
Net Current Assets
277
382
387
525
518
Deferred Tax Asset
22
23
25
25
25
Mis. Exp. not written off
-
-
-
-
-
Total Assets
525
613
673
801
782
February 14, 2019
5
TV Today Network | 3QFY2019 Result Update
Consolidated Balance Sheet
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
Profit before tax
115
153
183
218
242
Depreciation
31
29
31
39
43
Change in Working Capital
(147)
(98)
(1)
(30)
(38)
Interest / Dividend (Net)
(6)
(10)
(1)
-
-
Direct taxes paid
(57)
(59)
(63)
(72)
(80)
Others
29
(2)
7
-
-
Cash Flow from Operations
(36)
14
158
155
166
(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)
(17)
(180)
Others
120
86
(47)
(63)
(1)
Cash Flow from Financing
111
76
(59)
(81)
(181)
Inc./(Dec.) in Cash
75
93
(0)
44
(45)
Opening Cash balances
95
170
263
263
307
Closing Cash balances
170
263
263
307
262
Source: Company, Angel Research
February 14, 2019
6
TV Today Network | 3QFY2019 Result Update
Key Ratios
Y/E March
FY2016
FY2017
FY2018
FY2019E FY2020E
Valuation Ratio (x)
P/E (on FDEPS)
24.7
20.3
15.1
13.2
12.0
P/CEPS
20.8
14.9
12.8
10.4
9.4
P/BV
4.1
3.4
2.9
2.4
2.5
Dividend yield (%)
0.5
0.6
0.8
0.9
9.4
EV/Sales
3.1
2.6
2.4
2.1
1.9
EV/EBITDA
13.7
10.4
8.9
7.1
6.5
EV / Total Assets
2.7
2.2
2.0
1.6
1.7
Per Share Data (Rs)
EPS (Basic)
13.1
15.9
21.4
24.4
27.0
EPS (fully diluted)
13.1
15.9
21.4
24.4
27.0
Cash EPS
15.5
21.7
25.2
31.0
34.3
DPS
1.6
1.9
2.6
2.9
30.2
Book Value
79.1
95.6
110.9
132.4
129.2
Returns (%)
ROCE
19.4
22.1
24.5
23.9
27.6
Angel ROIC (Pre-tax)
29.5
39.8
35.1
39.1
41.8
ROE
13.1
17.6
18.0
18.5
21.0
Turnover ratios (x)
Asset Turnover (Gross Block)
2.4
2.5
2.1
2.1
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
February 14, 2019
7
TV Today Network | 3QFY2019 Result Update
Research Team Tel: 022 - 39357800
E-mail: re[email protected]
Website: www.angelbroking.com
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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)
February 14, 2019
8