For 1QFY2020, Music Broadcast Limited (MBL) posted below expectation results
both on top-line and bottom-line fronts. MBL’s top-line registered a decline of ~8%
yoy to `70cr on the back of volume de-growth of 14%. Moreover, the company’s
operating margins contracted by 238bps yoy. On the bottom-line front, MBL
reported de-growth of ~38% yoy to `8cr on the back of lower sales and poor
operating performance.
Outlook and Valuation: During the quarter, the company’s volume growth has
remained subdued mainly due to overall slowdown in economy, which affected
overall ad spends. However, management expects that the company would be able
to recover the volume growth in upcoming festive season. Further, 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 `56

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