Music Broadcast Limited (MBL) owns and operates FM radio stations under the brand names Radio City and Radio Mantra. MBL has 39 radio stations and operates in 37 Indian cities. The company has a strong listenership base in cities like Mumbai, Delhi and Bangalore. Moreover it also has presence in the Internet Radio Space with – 40 web radio stations in 8 languages. In terms of valuations, the pre-issue P/E works out to 25.2x its annualised 1HFY2017 earnings (at the upper end of the issue price band), which is lower compared to its peers (ENIL is trading at 79.5x its annualised 1HFY17 earnings). Also, MBL’s EV/sales multiple 6.2x, works out to be at discount to ENIL’s 8.2x. On EV/EBITDA front too, Radio City’s issue appears to be attractive 18.7x v/s. ENIL’s 37.4x. Moreover, MBL has a better margin and ROE profile than its comparable peers. Hence, considering the above positives coupled with attractive valuations, we recommend a SUBSCRIBE on the issue.

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