TV Today Network Research Report By Angel Broking

3QFY2018 Result Update

For 3QFY2018, TV Today Network Ltd (TTNL) posted results in-line with our expectations on both top-line as well as bottom-line fronts. Revenue grew by ~23% yoy to Rs 174cr driven by higher growth in ad revenue segment. On the operating front, margins improved by 320bp yoy, which resulted in strong PAT growth of ~36% yoy to Rs 36cr.

Top-line driven by strong ad revenue growth: The company’s top-line grew by ~23% yoy to Rs 174cr on the back of strong growth in ad revenue segment (higher ~21% yoy to Rs167cr). Further, the company has also reported strong growth in radio segment (Rs 7cr vs. ~Rs 3cr in 3QFY17).

Profitability propelled by strong operating performance: On the operating front, margins improved by 320bps yoy, which resulted into strong PAT growth by ~36% yoy to Rs 36cr. Segment wise, advertisement business witnessed strong EBIT margin improvement of 374bps. However, radio business reported EBIT level loss of Rs 6cr vs. Rs 6cr (loss) in 3QFY17.

Outlook and Valuation: Going forward, we expect TTNL to report net revenue CAGR of ~17% over FY2017-19E to ~Rs 779cr and net profit CAGR of ~22% over the same period to Rs 139cr on the back of (a) No.1 leadership position in Hindi news genre (for the 14th consecutive year) and (b) No.2 leadership position in English news genre. TTNL is a debt free company with Rs 235cr cash on balance sheet. At the current market price of Rs 477, the stock trades at a PE of 23.4x and 20.4x its FY2018E and FY2019E EPS of Rs 20.3 and Rs 23.3, respectively. We recommend BUY with target price of Rs 560.