CRISIL has downgraded its rating on the non-convertible debentures of HT Media Limited (HTML) to 'CRISIL AA/Stable' from 'CRISII AA+/Negative'. The rating on the commercial paper programme has been reaffirmed at 'CRISIL A1+'.
The rating action factors in weakening of HTML's business risk profile over the medium term. Revenue and profitability continue to be constrained by sluggish advertisement (ad) volumes owing to low economic activities, despite increase in ad yield across various categories and softening of newsprint prices.
Operating performance weakened significantly in fiscal 2019 due to high newsprint prices and sluggish macro-economic conditions Earnings before interest, tax, depreciation and amortization (EBITDA) was Rs 102 crore in fiscal 2019 as compared to Rs 393 crore in fiscal 2018. The operating performance was expected to rebound in fiscal 2020 due to lower newsprint prices, upward revision in Directorate of Advertising and Visual Publicity rates and pickup in ad volumes.
Despite consolidation, revenue remained flattish at Rs 1,061 crore during the first half of fiscal 2020, as compared to Rs 1,064 crore in the corresponding period of the previous fiscal. The impact was much more pronounced on English ad revenues, which declined by about 10% on-year, as compared to a decline of around 4% on-year for Hindi ad revenues. On a pro-forma basis, the radio business revenue declined by about 4% on-year, in the first half of fiscal 2020.
On the other hand, while consolidated EBITDA improved to Rs 63 crore in first half of fiscal 2020, owing to softening of newsprint prices, but EBITDA margins still remained at about 6% during the period as compared to approximately 16% in first half of fiscal 2018.
The ratings continue to reflect the strong market position of HTML's flagship English daily, Hindustan Times (HT), in the National Capital Region (NCR), and the established market position of its Hindi daily, Hindustan. The ratings also factor in HTML's healthy financial flexibility, because of strong liquidity. These strengths are partially offset by the exposure to volatility in newsprint prices and economic downturns.
Shares of HT MEDIA LTD. was last trading in BSE at Rs.14.9 as compared to the previous close of Rs. 14.45. The total number of shares traded during the day was 10720 in over 147 trades.
The stock hit an intraday high of Rs. 15.35 and intraday low of 14.1. The net turnover during the day was Rs. 155989.