MOSL: MUSIC BROADCAST (Buy)-Adspends trending well-more benefits to come from op. leverage/new station contribution
Music Broadcast: Adspends trending well; more benefits to come from op. leverage/new station contribution
(RADIOCIT IN, Mkt Cap USD0.2b, CMP INR284, TP INR380, 34% Upside, Buy)
- Healthy ad yields, volumes drive growth: Revenue grew by a healthy 14% YoY (+9% QoQ) to INR870m (in-line), driven by (i) contribution from the festive season, (ii) an 11% (v/s average of 8%) yield improvement at legacy stations and (iii) higher utilization at phase III stations (53% v/s average of 49%). EBITDA grew 23% YoY (+8% QoQ) to INR286m, missing our estimate by 6%, mainly on account of higher-than-expected increase in opex (+21% YoY) due to one-off. EBITDA margin expanded 225bp YoY (-30bp QoQ) to 32.9%, potentially due to higher contribution from new stations. PAT grew 38% YoY to INR164m (10% miss), mainly led by EBITDA growth and ~66% plunge in finance cost. For 9MFY19, revenue/EBITDA/PAT grew 9%/17%/22% YoY.
- Concall highlights: (1) Radio industry players have written a letter to the government requesting an ad rate hike; they expect a positive response. (2) Company expects increasing volumes to drive better revenue growth in 2HFY19 than in 1H. Radio industry is likely to grow by 12-14% in FY20. Accordingly, MBL should maintain strong revenue growth of 2HFY19 into the next year. (3) Acquisition of Friends FM 91.9 is still pending MIB approval.
Music Broadcast Limited, formerly known as Music Broadcast Pvt Ltd, owns and operates Radio City 91.1FM, which is a frequency modulation (FM) radio brand, and PlanetRadioCity.com, which is a music portal. Apart from Radio City Fun Ka Antenna, PlanetRadiocity.com has around 20 other Web radio streams, which include Radio City Indipop, Radio City Freedom, Radio City Smaran, Radio City Hindi, Radio City Tamil, Radio City Malayalam, Radio City International, Radio City Love, Radio City Classics, Radio City Dance, Radio City Fusion, Radio City Kannada, Radio City Rock, Radio City Electronica, Radio City Ghazal, Radio City Ishq, Radio City Metal, Radio City Faith, Radio City Wellness and Radio City Sufi. The PlanetRadioCity.com Website also features, news, videos, access to Radio City radio jockeys (RJs), Shows, Radio City properties and scoops on celebrities at Radio City. The Company has operations in around 20 cities in India.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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