TV Today Network (TTNL) reported a good set of numbers for 1QFY2017 with its
consolidated top-line growing by ~8% yoy for the quarter. On the operating
front, the company reported margin expansion on account of lower selling &
administrative expenses, which lead to the net profit growing by ~24% yoy for the
Top-line grew ~8% yoy: The consolidated top-line grew by ~8% yoy to ~Rs137cr
suggesting increased ad spends having borne results. However, the sell off of 4
radio stations (Jodhpur, Amritsar, Patiala and Shimla) proportionately impacted
top-line growth.
PAT grew ~24% yoy: The company reported margin expansion by 330bp yoy to
26.9% aided by lower selling & administrative expenses (down 734bp yoy as a
percentage of sales). The EBITDA grew by ~23% yoy to Rs37cr and the net profit
resultantly grew by 24% to Rs22cr.
Outlook and Valuation: We expect TTNL to report a net revenue CAGR of ~16%
to ~Rs743cr and net profit to post a ~16% CAGR to Rs128cr over FY2016-18E.
The company has sustained its leadership position in the Hindi news genre for14
consecutive years while in the English news genre it currently holds the No.2
position. Further, its exit from the radio business should boost profitability. The
company is debt free with `201cr of cash on its balance sheet. Hence, we
maintain our Buy recommendation on the stock with a target price of Rs363.

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