TV Today Network Q2FY15 Result Update By ICICI-Direct

Enjoys the No-1 position since decades, Maintian BUY

Digitisation would lead to declining carriage cost & uptick in subscription revenue as the distribution industry shifts to cost per subscriber (CPS) model. Carriage cost forming about 30-35% of revenue is expected to decline at an annual rate of 10% over the next two years. Though the employee expenses has led to some trimming of EBITDA, we expect the company to post a 30.7% EBITDA CAGR (FY14-16E) to Rs. 186.6 crore. With a revival in EBITDA margins, valuation multiples are expected to inch up to historical levels. We to value it at 15x FY16E EPS of Rs. 18.4 to arrive at a revised target price of Rs. 276, maintaining Buy.

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