X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Midday: Net drops 50% - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jul 24, 2001

    Midday: Net drops 50%

    Mid-Day Multimedia Ltd.(MML) has posted a drop of 50% in net profit for 1QFY02. While income from operations has remained flat, operating margins took a severe beating from 20.3% to 8.5%. Other Income showed a sharp rise as the company temporarily deployed its IPO proceeds in debt mutual funds. Excluding other income, profit before tax dropped by around 80%.

    (Rs m) 1QFY01 1QFY02 % Change FY01
    Sales 214 215 0.5% 950
    Other Income 2 11 377.3% 13
    Expenditure 171 197 15.4% 794
    Operating Profit (EBDIT) 44 18 -57.9% 156
    Operating Profit Margin (%) 20.3% 8.5% -58.1% 16.4%
    Interest 2 4 65.2% 10
    Depreciation 4 7 91.7% 29
    Profit before Tax 40 18 -54.5% 130
    Extraordinary Income 0 -
    Tax 10 3 -68.0% 44
    Profit after Tax/(Loss) 30 15 -50.2% 86
    Net profit margin (%) 0 7.0% 9.1%
    No. of Shares (eoy) (m) 27.0 34.0 34
    Diluted Earnings per share* 4.5 1.8 2.5
    P/E (at current price) 6 14 12.7
    (*- annualised)

    The drop in operating margins can be attributed to high newsprints cost coupled with higher fixed charges in outdoor and internet initiatives. Income from operations remained more or less flat due to sharp drop in advertising income reflecting gloomy economic scenario. Though newsprint prices have softened in the last quarter, the effective international newsprint prices for the company showed an increase of around 23% due to old stocking.

    The business model of the company is built around four business divisions viz, publishing, outdoor advertising, radio and interactive/IT enabled services. The publishing division of MML has four newspapers and a magazine. The prominent newspapers are Mid-Day in english (which comes out with three editions daily) and Gujarati Mid-Day. MML now plans to launch Mid-Day Marathi. Venturing into multi-lingual tabloids helps the company in leveraging the content creation costs.

    However, the publication business of the company is prone to fluctuations depending on two factors. viz, newsprint prices and the economic scenario in general which reflects in advertising revenues for the company. Newspaper advertising is expected to grow 7% in the current year as against 17% growth last year. A major chunk of advertising revenue growth last year was fuelled by dotcoms. Dotcom advertising revenues contributed around 16% of total advertising revenues for Midday last year.

    In the Outdoor advertising business the fixed rentals payable to BEST increased by around 13%, income from advertisments on the other hand didn't match up this increase in fixed cost. Midday currently has over 1 m sq. foot of outdoor space covering over 35,000 sites and has exclusive rights for advertisements on 2,038 bus shelters, 33,000 electric pole kiosks and certain railway stations for varying periods. The company's initiatives in internet domain also contributed to increase in fixed costs. Midday runs a city centric portal viz, Chalomumbai.com. A Geographic information service (GIS) project exclusively for Mumbai is also in the offing.

    At the current market price of Rs 25, the stock trades at 14 x its annualised earnings for 1QFY02. Midday is expected to benefit from softening newsprint prices in the coming quarters. However, the advertising spend is not likely to improve. The company is trying to find other industry domains to compensate for loss in advertising revenues from dotcoms. The RoCE of the company is likely to be impacted further, as the internet and radio business initiatives are unlikely to pay off immediately. The valuations of the company going forward would depend on the payback period of this new ventures and recovery in advertisement space.

     

     

    Equitymaster requests your view! Post a comment on "Midday: Net drops 50%". Click here!

      
     

    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    NEXT MEDIAWORKS SHARE PRICE


    Aug 17, 2017 (Close)

    TRACK NEXT MEDIAWORKS

    • Track your investment in NEXT MEDIAWORKS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON NEXT MEDIAWORKS

    NEXT MEDIAWORKS - NASPERS COMPARISON

    Compare Company With Charts

    COMPARE NEXT MEDIAWORKS WITH

    MARKET STATS