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HT Media: Non print contributes to growth
Jul 19, 2011

HT Media announced the first quarter results of financial year 2011-2012.The company has reported a 22.7% YoY and 24.5% YoY increase in top line and net profits respectively. Here is our analysis of the results

Performance summary
  • Top line increased by 22.7% YoY on back of robust revenue growth from the radio, entertainment and advertising segments.
  • Operating margins declined by 1.7% YoY during the quarter to 18.2%.
  • Net profits grew by 24.5% YoY during the quarter helped by 194% rise in other income and growth in revenues.


Financial performance snapshot
(Rs m) 1QFY11 1QFY12 Change
Net sales 4,051 4,970 22.7%
Expenditure 3,243 4,066 25.4%
Operating profit (EBDITA) 808 903 11.8%
EBDITA margin (%) 19.9% 18.2%  
Other income 50 146 194.3%
Interest 64 53 -17.5%
Depreciation & amortisation 194 214 10.0%
Profit before tax 599 782 30.6%
Profit before tax margin (%) 14.8% 15.7%  
Exceptional items - -  
Tax 198 243 22.9%
Profit after tax before moinority 401 540 34.4%
Share of minority (12) 25  
Profit after tax  414 515 24.5%
Net profit margin (%) 10.2% 10.4%  
No. of shares (m)   235  
Diluted earnings per share (Rs)*   8.5  
P/E (x)   19.4  
(*trailing twelve month earnings)

What has driven performance in 1QFY12?
  • Topline rose by 22.7% with radio and entertainment registering a whopping growth of 75% again this quarter.

  • Advertising saw good growth even despite sectors like education, real estate, financial services not being able to contribute much. Revenues from advertising grew by 17% over the same quarter last year.

  • The company's decision to focus on other businesses has been yielding results for last few months. This quarter also, the revenue from radio and internet business grew by 75%. Shine.com, the job portal under the internet business is particularly doing very well.

  • Expenditure rose by 25.4% over the same quarter last year resulting in an increase in operating profits by 11.8%. Operating margins however have fallen by 1.7%.

    Cost breakup
    (% of sales) 1QFY11 1QFY12 Change
    Raw materials consumed 1,303 1,724 32.3%
    % sales 32.2% 34.7%  
    Staff cost 749 880 17.5%
    % sales 18.5% 17.7%  
    Advertising cost 285 331 15.8%
    % sales 7.0% 6.7%  
    Other expenses 905 1,132 25.0%
    % sales 22.4% 22.8%  
    Total expenditure 3,243 4,066  

  • Expenses under all expense heads grew quite substantially during the quarter. Maximum rise was seen in prices of inputs which grew by 32.3%.

  • Other expenses too increased by 25% and now form 22.8% of total sales for the company.

  • The readership for the English daily ‘Hindustan times' grew 2% q-o-q and it maintained its top position in Delhi with a significant lead over competitors in the premium segments. Mint, the English business daily, is now at no 2. in this segment. It enjoys a readership of 24% in Delhi, Mumbai, Bengaluru and Kolkata.

  • Net profits grew by 12% YoY despite the decline in operating profits on account of higher other income and lower tax expenses.

What to expect?
At the current price of Rs 164, the stock of HT Media is trading at a multiple of 19.4 times its trailing 12-months earnings. The advertising revenues are expected to take a hit from the current slowdown in sectors like real estate, financial services and education. The company however is focusing on exploring newer avenues for revenue generation. The radio and internet business are already doing well and it has recently gotten into a joint venture with Mahesh Tutorials as its foray into education. Print industry (the company's main business) continues to be one of the biggest beneficiaries of the country's growth and hence the company is likely to benefit out of this in the medium to long term.

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Feb 19, 2018 03:37 PM

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