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Thursday, April 3, 2014

HT MEDIA LIMITED : ENRICH YOUR PORTFOLIO !!!

Scrip Code: 532662 HTMEDIA
CMP:  Rs. 91.10; Buy at current levels & at every dips.

Short Term Target : Rs. 100; Medium to Long Term Target: Rs. 120; STOP LOSS – Rs. 83.80; Market Cap: Rs. 2,136.15 Cr; 52 Week High/Low: Rs. 119.00 / Rs. 69.65.

Total Shares: 23,27,48,308 shares; Promoters : 16,17,77,090 shares –69.51 %; Total Public holding : 7,09,71,218 shares –30.49 %; Book Value: Rs. 75.43; Face Value: Rs. 2.00; EPS: Rs. 9.07; Dividend: 20.00 %; P/E: 9.93 times; Ind. P/E: 21.64; EV/EBITDA: 5.22.
Total Debt: 382.62 Cr; Enterprise Value: Rs. 2,367.00 Cr.

HT MEDIA LTD: HT Media Limited was founded in 1924 and was incorporated on 3 December, 2002. HT Media ltd is based in New Delhi, India. HT Media Limited operates as an subsidiary of The Hindustan Times Limited. The company came out with an IPO on August 2005 offering 46,40,000 equity shares of Rs. 10 each for Rs. 530 per share raising Rs. 245.92 Cr. The shares of HT MEDIA got listed on 1 September 2005 at Rs. 750.00 per share. The company declared split in face value of its shares from Rs. 10 to Rs. 2 on 19 October 2006. The IPO proceeds were intended to be used for capital expenditure, sales and marketing, and radio services. HT Media Limited, together with its subsidiaries, primarily engages in the printing and publication of newspapers and periodicals in India. It operates in three segments: Printing and Publishing of Newspapers and Periodicals, Radio Broadcast & Entertainment, and into Digital and web

                            The company publishes well-known Hindustan Times -English daily; Hindustan-a Hindi daily; Mint-a business newspaper daily, except Sunday; Nandan-a monthly children’s magazine; and Kadambini-a monthly women’s magazine. It also engages in FM radio broadcast and various other related activities through its radio channels operating under the brand name of Fever104 in the cities of Delhi, Mumbai, Kolkata, and Bengaluru. In addition, the company also operates few websites namely Shine.com- a job portal; Desimartini.com- a movie review website; HTCampus.com- an education portal; Hindustantimes.com- a news website; and livemint.coma business news website. Further, it provides HT Educationa weekly educational supplement; My First Newspapera newspaper for school children and teachers; HTCampus- which provides the information on various courses, vari0us colleges & universities; and Studymate- a supplementary education programme that focuses on the CBSE curriculum and prepares students for examination. Additionally, the company offers HT Brunch- a sunday magazine supplement; HT City- a Delhi-based supplement; HT Estates- a realty supplement; HT Mini- a tabloid newspaper for the commuters; HT CafĂ©- a Mumbai-based supplement related to bollywood and entertainment; and HT Business- for business news and information. It also provides events and marketing solutions; digital content distribution and digital marketing on the mobile medium; and commercial printing solutions. 

                            HT MEDIA Ltd is locally compared with Jagran Prakashan Ltd, DB Corp Ltd, The Sandesh Ltd, Deccan Chronicle Holdings Ltd, Infomedia Press Ltd, and Hindustan Media Ventures Ltd, and Globally compared with News Corporation of USA, New York Times Company of USA, Gannett Company of USA, Tribune Company of USA, Daily News LP of USA, Berkshire Hathaway of USA, Lee Enterprise of USA, A.H.Belo Corporation of USA, BELL Media of Canada, Bloomsbury Publishing of London, D.C. Thomson & Co. Ltd of Scotland, Daily Mail and general Trust of UK, Dong-A IIbo of South Korea, Hankyoreh Shinmun of South Korea, Hurriyet of Turkey, Independent News & Media of Dublin, Ireland, EM News Distribution of Ireland, Fairfax Media of Australia, Guardian Media Group of UK, Central European Media Enterprise Ltd of Hamilton, Bermuda, Hong Kong Economic Times Hld of Hong Kong, Modern Times Group AB of Sweden.

Investment Rationale:
HT Media is one of the leading print media companies in India, which is home to three leading newspapers in the country which is in the English, Hindi and business segments namely Hindustan Times – the second most read English daily with a readership of 38 Lakhs, Hindustan – the third most read Hindi daily with a readership of 1.22 Cr and Mint - a business daily and India's first newspaper to be published in the Berliner format, Mint exclusively carries The Wall Street Journal "WSJ" branded editorial content by the virtue of content sharing partnership between HT Media & Newscorp. 

                        Recently, TV18's business news channel CNBC-TV18 has entered into an strategic content alliance with MINT, as a part of the tie-up these two parties will share content with each other on daily basis & will work together on various editorial intiatives throughout the year, Starting from first of april, every issue of Mint will carry exclusive content from CNBC-TV18 while Mint's news & analysis will be available on CNBC-TV18 regularly also with content exchange between two digital assets- livemint.com & moneycontrol.com, this alliance will benefite both. Hindustan Times was started in 1924 and has a more than 85 year history as one of the country’s leading newspapers. The company also has four FM radio stations namely - “Fever 104” in Delhi, Mumbai, Bengaluru and Kolkata. The company has also made a foray into the internet space through its subsidiary Firefly e-Ventures Ltd, which operates the job portal www.Shine.com. This is in addition to the existing websites livemint.com and hindustantimes.com. According to report by a global media investment management, a number of developing markets across the globe will see significant growth in newspaper revenues. Although revenues overall have declined over the past few years the appetite for newspapers is growing, globally. It is being forecasted that by the end of the 2017, 59.4 Cr newspapers would be distributed daily in Asia Pacific markets only. A global media group says that the Print advertising will grow at 8.5 % in 2014 which would be up from 4.6 % last year, largely on the back of advertising by governments and political parties ahead of the general election falling May 2014. The report says that the growth in print is expected to come exclusively from newpapers, with the magazine advertising market estimated to shrink by 5 % this year after remaining stagnant for three years. The report states that in 2014, print will account for 38 % of its total advertising, last year print accounted to 39 % share in the advertising sector. Growth in regional-language print publication is also expected to increase. 

                   For HT Media, its Advertisement growth was better than the market estimates, with English ad posting a healthy 5.90 % YoY growth after few subdued quarters and Hindi ad posting a handsome YoY growth of 16.3 %. Even HT Media’s radio fared well this quarter reporting a growth of 22.5 % to reach Rs. 26.7 crore. Going ahead, it is believed that the company will benefit from the upcoming general elections and increased Ad spending by FMCG companies in a bid to expand their rural footprint. However, the advertisement scenario would remain subdued post the election fillip till the economy starts witnessing a turnaround. It is expected that the company can post an English Ad revenue growth of 5.9 % and 8.1 % and Hindi Ad revenue growth of 13.5 % and 13.3 % in FY14 and FY15, respectively. Newsprint prices have increased 14 % YoY but due to consistent efforts on the side of grammage and pagination, HT Media could mitigate the impact to a considerable extent. English print reported 5.9 % YoY growth after several subdued quarters and Hindi print also recorded 16.3 % YoY ad revenue growth. This growth can be attributed both to the low base effect and improving Ad scenario due to general elections in 2014. As the company already has inventory till August in place it is expect that its raw material costs will remain stable for the next few quarters. Company has a gross debt of Rs. 700 crore and a gross cash balance of Rs. 1500 crore, it has neither repaid its debt, nor has distributed cash in terms of dividend or buyback. There has, however, not been any clear roadmap on the cash usage by the company, which would continue to be an overhang on valuations.

Outlook and Valuation:
HT Media is the India’s second largest print media company in terms of readership-circulation and India’s largest listed print media company in terms of revenue. The company's two key offerings: - Hindustan Times and Hindustan features in the top five newspapers in their respective categories in terms of readership. The company is a market leader in Delhi for Hindustan Times, Bihar and Jharkhand for Hindustan and has emerged as a strong contender in the financial daily segment for Mint in business segment. HT Media’s recent underperformance can be attributed to its OPM pressure on account of losses in digital business, higher newsprint costs and cyclical nature of Ad revenue growth due to sluggish and slower GDP growth. The company has undertaken measures such as cutback in excess circulation and have increased pagination efficiency to improve its margin. The company has also divested its entire 51 % stake in HT Burda which was making losses. The Management has also indicated a shift in focus from volume driven to yield driven advertising growth. Going forward, it is believed that the yield driven advertising growth and the upcoming elections will help the company to improve its advertising revenue growth and profitability. 

                   HT Media reported its Q3FY14 numbers, which were better on both the top-line and the bottom-line front. The company reported revenues of Rs. 581.3 crore due to better-than-expected Ad-growth of 8.8 % in the print segment. In addition, the impressive 17.7 % growth in circulation revenues on the back of increased realisation per copy further aided the company’s revenues. HT Media demonstrated EBITDA margin expansion by 0.31 % YoY to 16.3 % owing to high operating leverage in the quarter. The PAT was at Rs. 67.0 crore and was aided by higher other income of about Rs. 35.7 crore. Also, HT Media may remain under pressure on account of lower Ad growth in the English segment on account of a challenging economic environment. Circulation revenues grew 17.7 % YoY to Rs. 66.5 crore. The management indicated the growth in circulation revenue was largely brought about by improvement in realisation per copy. The management guided that the company would be taking further rate hikes in the upcoming quarters improving its EBITDA margins. PAT margins expanded 1.73 % YoY buoyed by higher other income of Rs. 35.7 crore this quarter. In this quarter company’s HT Mumbai achieves breakeven, Mint is expected to breakeven in 4QFY2014: During 3QFY2014, HT Mumbai market achieved operational breakeven aided by 25 % yoy growth in revenues to Rs. 47 cr. However, Mint reported a loss of Rs. 2.5 Cr during the quarter. The digital business continues to make losses. According to Management commentary, the digital business is expected to make a loss of Rs. 38 Cr in FY2014. The company have recently, on 20 February 2014 have completed its buyback of 22,72,727 equity shares of face value of Rs.2 each via open market transactions and had set Rs. 110 as it maximum buying price, however , the company was successful in buying all of 22,72,727 equity shares of Rs.2 each at an average price of Rs. 82.76 per share totalling to Rs. 18.80 Crs of cash outflow making an positive impact of 0.96 % on comapny's EPS. The At the current market price of Rs. 91.10, the stock is trading at a PE of 10.71 x FY14E and 9.90 x FY15E respectively. The company can post Earnings per share (EPS) of Rs. 8.50 in FY14E and Rs. 9.20 in FY15E. One can buy HT MEDIA LIMITED with a target price of Rs. 110.00 for Medium to Long term investment and for the SHORT TERM PLAYERS it should be Rs. 100.00

KEY FINANCIALSFY12FY13FY14EFY15E
SALES ( Crs)1,972.002,016.102,155.402,335.10
NET PROFIT (₹ Cr)165.50167.70200.00216.60
EPS ()7.507.108.509.20
PE (x)10.2010.1010.5010.80
P/BV (x)1.201.100.900.90
EV/EBITDA (x)6.606.805.704.00
ROE (%)11.4010.5011.2010.90
ROCE (%)10.109.007.709.60

I would buy HT MEDIA LTD for Medium to Long term for target of Rs. 110 and for the shorter term the target would br Rs. 100.00. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of ₹ 83.80 on every purchase(Why Strict stop loss of 8 % ?) - Click Here

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

VIEW THE POWER POINT PRESENTATION ON

Sunday, March 23, 2014

INFO EDGE INDIA LTD : CONNECTING THE DOTS !!!

Scrip Code: 532777 NAUKRI
CMP:  Rs. 599.05; Accumate at every dips.

Short Term Target: Rs. 630; Medium to Long Term Target: Rs. 660; STOP LOSS – Rs. 551.12; Market Cap: Rs. 6,540.48 Cr; 52 Week High/Low: Rs. 708.05 / Rs. 276.35.

Total Shares: 10,91,81,024 shares; Promoters : 5,57,94,304 shares –51.10 %; Total Public holding : 5,33,86,720 shares –48.89 %; Book Value: Rs. 60.95; Face Value: Rs. 10.00; EPS: Rs. 9.27; Dividend: 10.00 %; P/E: 64.62 times; Ind. P/E: 19.79; EV/EBITDA: 31.25.
Total Debt: 0.48 Cr; Enterprise Value: Rs. 6,527.92 Cr.

INFO EDGE INDIA LTD: Info Edge (India) Limited was incorporated in 1995 and is based in Noida, India. Info Edge (India) Limited is an India-based company engaged in the business of providing online classifieds and certain related services. The Company operates its business principally through four different divisions: Naukri.com, Jeevansathi.com and 99acres.com. It provides recruitment classifieds and services through its Naukri.com and Quadrangle business divisions. The company came out with an IPO on November 2006 offering 53,23,851 equity shares of Rs. 10 each for Rs. 320 per share raising Rs. 170.36 Cr, the shares of INFO EDGE got listed on 22 November 2006 at Rs. 623.80 per share. The company has given bonus shares in the ratio of 1:1 in the year 2010 and second bonus shares in the ratio of 1:1 in the year 2012. Info Edge (India) Limited provides recruitment classifieds and related services to job seekers and employers and recruitment consultants through its website: www.naukri.com, as well as through its office network. Through the Quadrangle division, the Company provides executive search services to its various corporate customers in the information technology and information technology-enabled services. Naukri.com is an online job posting website that offers services for recruiters, job seekers, and employers. Jeevansathi.com provides matrimonial classifieds and related services for prospective brides, grooms, and relatives. The Company also offers a real estate classifieds service through its Website: 99acres.com and an education portal Shiksha.com. Info Edge also owns Allcheckdeals.com, an online real estate brokerage firm which is run as a subsidiary company. Company also owns naukrigulf.com in Middle East. It also operates brijj.com, a professional networking site; firstnaukri.com, a fresher hiring site; quadrangle.com, an offline executive search business site; Meritnation.com that offers kindergarten to class 12 assignment and tuitions; and zomato.com, an online food guide portal. The company’s subsidiary as on 31 March 2014 includes: Naukri Internet Services Private Limited and Jeevansathi Internet Services Private Ltd both of which is own internet domain names and related trademarks used in it business, Allcheckdeals.com India Private Ltd, Applect Learning Systems Pvt Ltd which owns and operates meritnation.com, Zomato media Pvt Ltd , MakeSense Technologies Pvt Ltd and Info Edge (India) Mauritius Ltd. Info Edge India Ltd is locally compared with eClerx Services ltd, HOMESHOP 18, Justdial Ltd and Globally compared with Yahoo! Inc of USA, eBay Inc of USA, Googlr Inc of USA, Facebook Inc of USA, Linkedin Corp of USA, Pandora Media Inc of USA, Shutterstock Inc of USA, Sciquest Inc of USA, Zillow Inc od USA, Monster Worlwide Inc of USA, America OnLine from USA, Bazaarvoice Inc of USA, Xo Group Inc of USA, Twitter Inc of USA, Verisign Inc of USA, Yelp Inc of USA, Carsales.com Ltd of Australila, Moneysupermarket.com from UK, XING AG of Germany, United Internet AG of Germany, Opera Software ASA of Norway, Vistaprint N.V. of Netherlands, Baidu Inc of China, Beijing 58 Information and Technology Co Ltd of China, 21Vianet group Inc of China, iProperty Group Ltd of Malaysia, Nifty Corporation of Japan, Wix.com of Israel, Ateam inc of Japan, CROOZ Inc of Japan, F@N Communication Inc of Japan, Infomart Corp of Japan, Excite Japan Co Ltd of Japan, Asahi Net Inc of Japan, Nexyz Corporation of Japan, Drecom Co ltd of Japan, Zappallas Inc of Japan.

Investment Rationale:
InfoEdge (India) Ltd operates a wide range of online websites. It enjoys leadership position in recruitment website -Naukri.com, in property-99acres.com and is among the top three players in matrimony- Jeevansathi.com. Recently, InfoEdge made an investment and raised its stake in bangalore based Canvera Digital Technologies to 32 % for Rs. 13.5 Cr. InfoEdge's total investment in Canvera now stands at Rs. 57 Cr. Canvera Digital Technologies offers mass customized printed products and ecommerce solutions to professional photographers, it offers products such as coffee table books, posters,calenders. Apart from this, InfoEdge has made significant strategic investments into emerging internet companies like meritnation.com, policybazaar.com, mydala.com, Canvera.com and zomato.com. With its headquarters in Noida (NCR), the company employs over 2,460 people and operates through a network of 57 offices located in 32 cities throughout India. These offices primarily engage in sales, marketing and payment collection activities for company’s businesses. To cater to the Gulf market they have 2 offices in Dubai and 1 each in Bahrain, Riyadh and Abu Dhabi. Info Edge India Ltd, is a clear leader in key online classifieds segments and now is one of the primary beneficiaries of structural shift in ad spends towards online platforms which is clearly driven by increasing smartphone penetration and which is on the cusp of a J curve. India is among the world's youngest nations with a median age of 26 years. 65 % of Indian population is estimated to be below 35 years of age and India will have 7 Cr new entrants to its work force over the next 5 years. India currently has about 21.4 Cr internet users, the third largest in the world and is likely to have 33 Cr to 37 Cr internet users in 2015 which would then be the second largest in terms of incremental growth. Due to declining costs of Internet access and mobile devices, nearly 55 % of aggregate user base in 2015 is expected to have an access to the internet from a mobile or tablet device in India. Economic contribution from Internet in India can be potentially doubled from current 1.6 % of GDP to 2.8 % to 3.3 % by 2015. Internet-related economy is expected to grow bigger than education and as big as healthcare sector in terms of current GDP share. Internet’s effect on the Indian economy goes well beyond iGDP. The Current levels of internet-related expenditure are estimated to create about 60 lakhs direct and indirect jobs. As the direct impact of the internet on India’s GDP has the potential to treble by 2015, an additional 1.6 Cr jobs could be created. Info Edge’s Naukri has garnered higher market share in this slowdown, also its innovative products helps naukri to combat threat against Linkedin.com, naukri continues to invest in its brand, sales team, customer service, tech and product innovation and support. Info Edge’s 99acre.com is benefiting from the increase in the real estate advertising and has increased its market share. 99acres.com have improved its site by improving user experience- pricing trends, photos and videos, android Apps and the site is now have spread its sales coverage across cities, this has helped 99acres.com to bring in more traffic, 99acre.com soon plans to launch a verified listings. Info Edge’s Jeevansathi.com has leveraged its IP built over last 5 years through investing in brand building. Management will continue to invest its analytics and algorithms. Info Edge’s other brands like Shiksha, FirstNaukri, naukrigulf continues to perform well. Management is committed to invest in potential big businesses of future like zomato, meritnation, policybazaar and is vouching for potential start-ups and M&A’s.
     
Outlook and Valuation:
Info Edge (India) ltd is India’s one of the largest leading online company with its strong brands and sustainable growing businesses. It has a very excellent and experienced management team. The company have invested in several internet start-ups ventures. The company has shown a rapid growth with share of revenues coming from its verticals other than recruitment has grown from 5 % in FY06 to 22.5 % in FY13. Historically, Info Edge has shown revenue CAGR of 28 % over the past years FY06 to FY13. Info Edge reported revenue of Rs. 483 Cr in FY13 along with the cash and liquid assets of Rs. 434 Cr. Company operates on a negative working capital. Info Edge has invested Rs. 57 Cr in Zomato in Q3 and Rs. 10 Cr in Meritnation and Rs. 4.5 Cr in Canverra, which will help accelerate company average growth. Overall, though Q3 was soft, Q4 is a seasonally better quarter led by license renewals while a recovery in IT-BPO hiring could aid FY15E growth. The Naukri Job Speak Index for December 2013 was flat QoQ at 1296 but grew 12.7 % YoY. Overall resumes on Naukri.com increased by a 10 lakhs to 3.60 Cr vs. 3.50 Cr in Q2. Recruitment EBITDA margins declined 1.43 % QoQ to 49.3 % while losses in other businesses widened to Rs. 3.2 Cr vs. Rs. 2.2 Cr in Q2. For Info Edge the macro is challenging and continues to influence the revenue predictability while higher advertising and marketing costs, increased competitive pressure in selected portfolio companies and rising investments in the investee companies could pressure EBITDA margins. Info Edge is expected to report revenue CAGR of 17 % and PAT CAGR of 23 % during FY13-FY15 E. At the current market price of Rs. 599.05, the stock is trading at a PE of 43.00 x FY14E and 32.12 x FY15E respectively. The company can post Earnings per share (EPS) of Rs. 13.00 in FY14E and Rs. 17.40 in FY15E. One can buy INFO EDGE INDIA LIMITED with a target price of Rs. 660.00 for Medium to Long term investment and for the Short Term Players it should be Rs. 630.00

KEY FINANCIALSFY12FY13FY14EFY15E
SALES ( Crs)391.90472.30523.00632.90
NET PROFIT (₹ Cr)103.3091.60141.50190.50
EPS ()9.508.4013.0017.40
PE (x)59.7067.7043.8032.50
P/BV (x)10.908.907.506.20
EV/EBITDA (x)50.0048.4032.3024.60
ROE (%)18.3013.2017.2019.00
ROCE (%)19.4015.7019.4020.20

I would buy INFO EDGE INDIA LTD for Medium to Long term for target of Rs. 660.00 and for the shorter term the target would br Rs. 630.00. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of ₹ 551.12 on every purchase(Why Strict stop loss of 8 % ?) - Click Here

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

VIEW THE POWER POINT PRESENTATION ON

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