For 1QFY2019, Music Broadcast (MBL) posted mixed bag results. Top-line reported modest growth, however on the bottom-line front, the company registered healthy growth. Revenues grew by ~8% yoy. The company’s operating margins improved by robust 290bps yoy. On the bottom-line front, MBL reported growth of ~25% yoy to `14cr on the back of strong operating performance.

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 ~19% to `73cr over the same period on the back of better margins. 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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