Buy this leading stock in the media and entertainment industry for a target price of Rs 350, gains of up to 26%

Outlook and stock returns

On NSE, the current market price (CMP) of TV Today Network is Rs 279.65 each. The stock is trading at Rs 44.1 above the 52-week low and Rs 180.45 below the stock’s 52-week high, respectively.

The stock’s 52-week low is Rs 235.55 each recorded on May 25, 2022, and the 52-week high is Rs 460.10 each recorded on December 14, 2021.

Over the week, the company’s shares have fallen around 0.23% and gained 4.39% over the past month, respectively. Over the past year, stocks have fallen about 2.73%. Over the past 3 years, stocks have fallen 9.12%, while over the past 5 years, stocks have gained 12.9%.

The stock’s ROE is 15.67%. TTM EPS is 30.04. The TTM PE ratio is 9.31. The P/B ratio is 1.45%. The dividend yield is 1.07% and the face value is Rs 5.

If an investor buys the shares of the company at the current market price, he can expect a potential gain of 26%, considering the target price estimated by the brokerage firm.

Q1FY23 results

Q1FY23 results

According to ICICI Direct Research, TV Today’s performance was weak.

Topline came in at Rs 218.2 crore, up 7% with revenue from TV and other media (pushed broadcast and digital segment) at Rs 214.6 crore (up 7% YoY annual). While TV broadcasting revenue would have been reduced year-over-year due to lower ad inventory, growth would have been driven by the digital segment (~30%+ growth by our calculations).

Reported EBITDA came in at Rs 47.3 crore, down 9.6% YoY with EBITDA margins at 21.7% (down 399 bps YoY), impacted by the increase in labor costs (up 27% year-on-year) driven by the anticipated cost burden for the expansion of the digital segment.

PAT reported at Rs 35.1 crore was down 6.1% year-on-year with lower margins weighing on bottom line.

Buy for a target price of Rs 350 each

Buy for a target price of Rs 350 each

TV Today’s stock price has underperformed with a stock price return of only ~16% over the past five years. “We are maintaining BUY as we believe that with stable double-digit growth, a healthy yield ratio and current valuations, this provides a margin of safety. Any announcement of cash uses such as the acquisition of dividends/ of digital assets (which the company is considering) will also be a key trigger. We value TV Today at Rs 350 i.e. 10x FY24E P/E,” the brokerage said.

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