DCHL Networth
-
Upload
rajan10kumar805053 -
Category
Documents
-
view
217 -
download
0
Transcript of DCHL Networth
-
7/30/2019 DCHL Networth
1/8
Deccan Chronicle Holdings Ltd.Reset to print growth
BUY
CMP Rs 191
1 Year Target Price Rs 275
Expected Appreciation 44%
-
7/30/2019 DCHL Networth
2/8
Deccan Chronicle Holdings Ltd.
Investment PositiveInvestment Positive
Fastest growing print media company: expected to register a revenueCAGR growth of 37.1% over FY07-09
Highest EBITDA & PAT margins of 46.7% & 29.2% respectively as onFY07 backed by strong ad rates and lower operating cost & lowernewsprint cost.
Securitization of receivables & Cash rich company: Rs 7.2 bn cash &cash equivalents as on H1FY08.
Lower capex in coming years to boost profitability further
Value unlocking in subsidiaries: Odyssey India & Sieger Solutions Ltd.
At the CMP of Rs.191, DCHL trades at a P/E of 14.5x & 11.2x of its FY08and FY09 earnings. We initiate BUY recommendation with a 12 months
price target of Rs.275 (16x FY09E EPS).
-
7/30/2019 DCHL Networth
3/8
Deccan Chronicle Holdings Ltd.
IndustryIndustry
Indian entertainment & media sector is expected to report a CAGR
growth of 18% and reach Rs 1 tn in 2011 from current size of Rs 437bn in 2006.
Changing demographics & lifestyles , increasing literacy level and
potential for higher ad spends as a percentage of GDP are expected
to be the key growth drivers for Indian print sector. Indian print media is expected to grow at 13% CAGR during 2006-2011
& to reach a size of Rs 232 bn from its current size of Rs 128 bn.
-
7/30/2019 DCHL Networth
4/8
Deccan Chronicle Holdings Ltd.
Company BackgroundCompany Background
Leading English daily newspaper in Andhra Pradesh & Tamilnadu,
having a circulation of around 9,50,000 copies per day as on H107. DCHL entered Chennai region in 2005 in order to increase its spectrum &
was successful in breaking the monopoly of The Hindu in a short spanof one year.
Entered into retail with 100% acquisition of Odyssey India Ltd. in
sep2005, which is growing at a healthy pace and is expected to reach atotal space of 5.02 mn with 173 stores by the end of FY09
DCHL formed a 100% subsidiary Sieger Solutions Ltd. in 2006 with anobjective to become the sales agent for DCHL & to make a foray intonew media businesses like internet & online portals.
DCHL also holds 90% stake in Asian Age Holdings Ltd.
-
7/30/2019 DCHL Networth
5/8
Deccan Chronicle Holdings Ltd.
FinancialsFinancials
Revenues and net profit are expected to report CAGR growth of 37.1%& 61.3% respectively over FY07-09
EBITDA margins are expected to expand to 62.6% & 63.9% in FY08 &FY09 respectively backed by higher realization, lower newsprint cost &cost efficiencies.
PAT margin is expected to increase to 38.5% & 40.4% in FY08 andFY09 from the current level of 29.2% during FY07.
ROCE and ROE are expected to improve to 39% and 31% respectivelyin FY09 driven by lower capex in coming years and marginsexpansion.
-
7/30/2019 DCHL Networth
6/8
Deccan Chronicle Holdings Ltd.
Financials (Contd)Financials (Contd)
FY06 3,308.8 99.8 31.5 678.6 16.0% 11.3 12.4 3.0 64.5
FY07 5,527.8 67.1 46.7 1,613.6 22.7% 18.8 5.5 6.6 29.2
FY08E 8,454.6 52.9 62.6 3,252.2 34.8% 8.8 4.0 13.2 14.5
FY09E 10,388.9 22.9 63.9 4,197.7 39.0% 5.7 3.1 17.1 11.2
Year Net Sales
Sales%
Growth
EBITDA
margin % EPS (Rs) P/EPAT ROCE (%) EV/ EBITDA P/BV
-
7/30/2019 DCHL Networth
7/8
Deccan Chronicle Holdings Ltd.
Valuation MatrixValuation Matrix
39.034.826.922.552924.35ROCE%
31.032.522.119.5528.0521.65ROE%
11.214.522.530.325.835.0P/E x
191.4191.4209.2209.2675.1675.1CMP(as on 30/10/07)
17.113.29.36.926.1519.3EPS
40.4%38.5%14.4%12.6%16.3%14.7%PAT%
4197.73252.22187.51617.51576.651161.95PAT
63.9%62.6%22.5%20.5%26.9%24.2%EBITDA%
6638.15291.53422.92627.82601.41916.2EBITDA
10388.98454.615209.812794.29662.37905.4Revenues
FY09EFY08EFY09EFY08EFY09EFY08E
DCHLHT Media*Jagran*
-
7/30/2019 DCHL Networth
8/8
Deccan Chronicle Holdings Ltd.
Deccan Chronicle Holdings Ltd.
BUY
Contact Persons :
Institutional Sales Retail Sales
Raj Bhandari / Rameshwar Singh Satish PasariD K Arora / Ninie Singh
Networth Stock Broking Ltd. Networth Stock Broking Ltd.
022-22633020/1/2 022-30286405
Email : [email protected] Email : [email protected]
(For full report visit : www.networthstock.com)