PRIVATE

CLIENT
GROUPMANAGEMENT
[PCG-Research]
PRIVATE
BROKING
& WEALTH

EQUITIES
CMP : Rs. 284

TV TODAY NETWORK LTD

BUYING RANGE:
Rs 265-285

BUY

TARGET: Rs 335

BUSINESS BACKGROUND:

TV Today Network (TV Today) incorporated in

December, 1999, is a part of the India Today Group and
a leading news broadcaster in India. It operates as a
subsidiary of Living Media, the holding company of the
India Today group of publications.

BSE Code
NSE Code
Face Value (Rs)
Market Cap (Rs Cr)
52 week H/L (Rs)

Particulars
TV Today is one of the leading news broadcasters in
India with four channels viz. Aaj Tak, Headlines
Today, Delhi Aaj Tak and Tez distributed by MSM
Discovery. TV Today is the first Indian broadcaster to
uplink a 24 hour Hindi news channel from India. The
company has an undisputed leadership position in the
Hindi news segment through Aaj Tak.
INVESTMENT RATIONALE:

TV industry to grow at 15.5% CAGR (FY15-19E):

According to the FICCI KPMG report 2015, the Indian
television industry is expected to grow at 15.5% CAGR in
FY15-19E rising from Rs 47500 Cr at the end of 2014 to
Rs 97500 Cr by the end of 2019E.
The number of TV households in India is 16.8 Cr as on
2014, implying a TV penetration of 61% if the total
population of the country. This is expected to increase to
90% by 2019.
Further, television advertising in India is expected to
grow at a CAGR of 14% over 2014 to 2019, to reach Rs
Rs 29900 cr.
Broadcaster to benefit from digitization Phase 3&4:
After digitization in phase 3 and phase 4 cities, TV today
would be able to better monetize its reach as it enjoys a
far stronger position in the smaller cities and towns.
Total 105 Mn users out of 168 Mn will go digital in phase
3 and phase 4. Phase 3 that has a deadline of Dec15, has already reached 60% mark.

PRIVATE CLIENT GROUP [PCG-Research]

532515
TVTODAY
5
1693
310/165

FY14 FY15 FY16E FY17E

Income(Rs Cr.)

389

476

541

617

NP (Rs. Cr)
Equity (Rs. Cr)
EPS (Rs.)

61.3

81.0

93.3

118.0

29.7
10.3

29.8
13.6

29.8
15.6

29.8
19.9

Shareholding Pattern

Promoters
FII
DII
Others
Total

57.4
0.0
7.4
35.2
100.0

Public > 1%
FRANKLIN INDIA SMALLER
COMPANIES FUND
SBI SMALL AND MIDCAP
FUND
RAMESH DAMANI
ARVIND KHATTAR
DAMANI ESTATE AND
FINANCE PVT. LTD.
RADHAKISHAN S DAMANI

Shares

1726420

2.89

1068142

1.79

869686

1.46

731036

1.23

646000

1.08

613419

1.03

Source: Bloomberg, Ace Equity

Dec 14,2015

Investment Idea : TV Today Network Ltd

Focus on Core Business:

TV Today completed the sale of four radio stations on slump sale basis for a Rs 4 Cr to EIL. The
sale of the remaining three stations in Delhi, Mumbai and Kolkata is pending from the Ministry.
This sale of the radio business will boost EBITDA as it is running under losses (Rs.9.2 Cr loss in
FY15).
Excellent Financials:
The revenue of the company grew at 10% CAGR in last 5 years while PAT growth stood at 22%
CAGR in same period. Low capital intensity of business translates into higher dividend
payments, average payout ratio stood at 27% in last 5 years.
In Q2FY16 also it reported excellent numbers. Revenue stood at Rs 126 Cr registering an
increase of 13% YoY. While, Profit grew by 84% YoY and 35% QoQ at Rs 24 Cr. Operating
margin stood at 28.10%, improved by 506 bps YoY and 465 bps QoQ.
Recommendation and Valuation

India is going through a massive transformation from converting TV signals from Analog to
Digital. Last two phases, Phase III and IV of this process is likely to be over in next one year.
Broadcasters are the major beneficiary of this change as they do not have to spend any
resources while clarity emerge about the actual viewership data.
As economy recovers we expect advertising spend to shoot up leading to sustained earnings
growth for broadcasting companies. TV Today is one of the leading news broadcasters in India
with four channels viz. Aaj Tak, Headlines Today, Delhi Aaj Tak and Tez.
At CMP of Rs 284, the stock is trading at 14.3x of its FY17E earnings of Rs 20. We recommend
buying the stock between Rs 285-265 with a target of Rs 335 in a years time.

PRIVATE CLIENT GROUP [PCG-Research]

Dec 14,2015

Investment Idea : TV Today Network Ltd

Price History
310
290
270
250
230
210

Rating Definition:

190

Buy: Stock is expected to gain by 20% or more

in the next 1 Year.

170

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

150

Sell: Stock is expected to decline by 10% or

more in the next 1 Year.

Disclosure:
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PRIVATE CLIENT GROUP [PCG-Research]

Dec 14,2015