MOSL: MUSIC BROADCAST (Buy)-Leading industry consolidation as growth moderates
Music Broadcast: Leading industry consolidation as growth moderates
(RADIOCIT IN, Mkt Cap USD0.2b, CMP INR59, TP INR70, 19% Upside, Buy)
- Operating leverage drives margins: Despite modest 8% YoY revenue growth at INR819m (5% miss) led by higher utilization/yield improvement, RADIOCIT reported healthy earnings growth, driven by 300bp margin expansion to 39.0% (on the back of inherent operating leverage). EBITDA grew 17% YoY to INR320m (4% beat). PAT at INR184m, grew 13% YoY (7% miss) mainly led by EBITDA growth and partly offset by higher taxes. For FY19, revenue/EBITDA/PAT grew 9%/17%/19% YoY.
- Concall highlights: (1) Opportunity from the MBL-RBNL deal is not in 'cross-selling' to advertisers, but in increasing utilization for RBNL acquisition (currently at 50-60%). (2) Cost synergies to be in the range of 2-3% of revenue. (3) Dividend policy will not change due to the acquisition.
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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