Hindustan Media Ventures Ltd is in competition with DB Corp, Deccan Chronicle Holdings and Jagran Prakashan. However it has been priced higher than its’ peers though it lags behind in performance. DB Corp has a Return on Net Worth of 23.30%, an EPS of Rs. 3.70 and a PE of 24.5. As against that, Hindustan Media Ventures has a Return on Net Worth of 19.12%, an EPS of Rs. 2.47. At the lower price band of Rs. 162, the PE works out to 26.44 while at trhe higher price band of Rs. 175, the PE is 28.08. The other two competittors Deccan Chronicle Holdings and Jagran Prakashan are also relatively cheaper that Hindustan Media Ventures.
Hindustan Media Ventures is one of the leading print media companies in India in terms of readership (Source: IRS, R2 2009 and Q1 2010). Hindustan Media Ventures publishes and prints ‘Hindustan‘, the third largest daily newspaper in India in terms of readership with a readership of 9.9 million readers (Source: IRS, Q1 2010). ‘Hindustan‘ began publication in 1936, owing its origins to and serving as a medium for the freedom movement, and has been one of India’s eminent Hindi newspaper dailies for over 70 years. ‘Hindustan‘ has the largest readership in key Hindi-speaking markets of Bihar and Jharkhand, with a strong and growing presence in Delhi NCR and the states of Uttar Pradesh and Uttarakhand. ‘Hindustan‘ was one of the fastest growing Hindi daily newspapers in India with a growth in readership of 15.9% in the period between July 2006 and December 2009 (Source: IRS, R2 2007 to Q1 2010).
Hindustan Media Ventures also publishes two Hindi magazines, ‘Nanda‘, a children’s magazine, and ‘Kadambin‘, a general interest magazine. In addition to their Hindi print publications, Hindustan Media Ventures also operate the website, www.livehindustan.com, which focuses on providing news in Hindi with regional content. Further, Hindustan Media Ventures have also recently forayed into event management and customized event solutions.
Hindustan Media Ventures‘ promoter is HT Media, an integrated multimedia company, which publishes, among others, leading dailies in India such as ‘Hindustan Times‘ and ‘Mint‘. HT Media currently owns 98.85% of Hindustan Media Ventures‘s equity share capital. Hindustan Media Ventures acquired ‘Hindustan‘ (including ‘Ravivasriya Hindustan‘), ‘Nandan‘ and ‘Kadambini‘ publications, certain printing facilities and personnel from HT Media, effective as of December 1, 2009.
Hindustan Media Ventures sells the advertisement space for its publications through advertising agencies as well as directly to the clients. Further, Hindustan Media Ventures leverages on the HT group’s relationships with various advertising agencies to facilitate sale of advertising space in their publications. As of May 31, 2010, the HT group had transacted with 845 accredited agencies and 6,496 non-accredited agencies.
Financials of Hindustan Media Ventures
Hindustan Media Ventures Peer Comparison
Risk Factors of Hindustan Media Ventures
The Indian newspaper and magazine industry, particularly the Hindi newspaper and magazine industry, is intensely competitive. In each of our markets, Hindustan Media Ventures face competition primarily from other newspapers and magazines for circulation, readership and advertising. In addition, we face competition from other alternative forms of media including, but not limited to, television broadcasters, magazines, pamphlets, flyers, radio broadcasters and internet websites. These other forms of media compete with newspapers for advertisers and also for the time and attention of our readers. In addition, Hindustan Media Ventures may face competition in the future from international media companies, if and when, the Government of India liberalizes its foreign investment regulations and restrictions applicable to the media sector and such international media companies start regional publications in India.
In Hindustan Media Ventures‘ business, competition for circulation and readership results in competitors reducing the cover-prices of their newspapers and competition for advertising from newspapers has often resulted in Hindustan Media Ventures‘ competitors reducing advertising rates or offering price incentives to advertising customers. In the event of such price competition, Hindustan Media Ventures may have to (1) reduce the cover price of our newspapers, (2) reduce its advertising rates or (3) offer other price incentives. For instance, due to increased competition in the region, Hindustan Media Ventures reduced the cover price of ‘Hindustan’ in Ranchi from the existing Rs. 4 to Rs. 2 in June 2010. Any such reduction in prices or rates or the introduction of new price incentives could have a material adverse effect on Hindustan Media Ventures‘ results of operations.
Newsprint forms the major raw material for Hindustan Media Ventures‘ business, and represents a significant portion of its expenses. Hindustan Media Ventures has no long term supply contracts with suppliers for the supply of newsprint. Hindustan Media Ventures‘ newsprint requirements are sourced from suppliers based on purchase contracts, as per its requirements. Further, the price of newsprint both worldwide and in India has historically been cyclical and volatile. Any significant increase in the price of newsprint could adversely affect Hindustan Media Ventures‘ business and results of operations. Inadequate supply of newsprint caused either by default of the supplier or by a sudden change in the prices or for any other reason could hamper Hindustan Media Ventures‘ operations or thereby adversely affect its business, cash flows and results of operations.
Circulation of newspapers and magazines among readers is an important source of revenue for Hindustan Media Ventures since it derives significant revenues from subscriptions and sales. In addition, circulation and readership significantly influence ad-spend by advertisers and the advertising rates in its newspapers. Circulation and readership is dependant on the quality and reach of Hindustan Media Ventures‘ publications and the loyalty of its existing readers. Circulation in the Indian market is also largely affected by price and, therefore, the circulation of our newspapers may be adversely affected if Hindustan Media Ventures fail to meet any price competition. A decline in the circulation or readership of its newspapers and magazines for any reason could adversely affect Hindustan Media Ventures‘ business, financial condition, cash flows and results of operations.
There does not seem to be a compelling reason for investment in Hindustan Media Ventures. If one does want exposure to the print media sector, DB Corp appears a better bet given its’ superior performance. Deccan Chroncile Holdings is also a good bet with a OPM of 50.71%, NPM of 29.25% and a PE of just 11.46 compared to 29.18 for DB Corp and 21.36 for Jagran Prakashan and 26.44 – 28.08 for Hindustan Media Ventures.