MUMBAI: Sharekhan is of the view that the Hindustan Media Ventures can command premium valuations and offers scope for reasonable upside to the investors.
“With an improved macro environment (especially in the Hindi speaking markets), higher disposable incomes, improved literacy and increased penetration of newspapers, we expect the readership of HMVL’s publications to improve strongly in the coming years. Thus, we expect the print media industry to grow at approximately 10% compounded annual growth rate (CAGR; the Hindi print media segment is expected to grow at about 15%CAGR) over the next two to three years.
This growth will be largely driven by an organic increase in advertisement revenues. We believe HMVL is one of the better players in the Indian regional print media and is likely to deliver a better growth in the coming years. However, the increasing competition from the large players like Jagran Prakashan and DB Corp could be a key risk to the profitability of the company.
At the lower and upper ends of the issue price band the stock is offered at 14.7x and 15.8x FY2012E earnings per share respectively, based on our very rough estimates.
Considering the favourable business dynamics for the regional print media companies and HMVL’s leadership position in the same, we beleive HMVL could command premium valuations and offers scope for reasonable upside to the investors,” the report said.
Hindustan Media Ventures, a subsidiary of HT Media, opened for subscription Monday. The price band of the issue is fixed at Rs 162-175 per share. The issue closes July 7.
Source:economictimes.indiatimes.com
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