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Buy TV18 Broadcast, target Rs 75: Kotak Securities Limited

Buy TV18 Broadcast at a price target of Rs 75.

ETMarkets.com|
Last Updated: May 02, 2018, 10.34 AM IST
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Kotak Securities Limited has a buy call on TV18 Broadcast Ltd. with a target price of Rs 75. The current market price of TV18 Broadcast Ltd. is Rs 63.

The time period given by analyst is year when TV18 Broadcast Ltd. price can reach defined target. TV18 Broadcast Ltd., incorporated in 2005, is a midcap company with a market cap of Rs 10946.19 crore.

Investment rationale by Kotak SecuritiesWe continue to expect sharp improvement in the company’s profitability going into FY19, on improving revenue traction and operating leverage. We note that FY18 forms a low base for the company’s revenues, especially in news and regional operations. The company has enhanced its standing in Hindi news/ regional news. Further, we expect that the entire news genre shall see significant benefits from electoral advertising. We note that from Karnataka election onward (1QFY19), TV18 Broadcast shall benefit from election spends in FY19/1QFY20. Entertainment operations of the company are solid ground, as recent initiatives have added to bouquet strength.
We have cut our estimates for FY19/FY20 on higher cost assumptions/ higher interest expenses. The resulting FY20 EPS estimate is 7% lower than prior estimates. We value TV18 Broadcast at 30X FY20E, or Rs 75 (Rs 80 earlier). Key risks to our investment view/ earnings estimates include competitive and regulatory risks.

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