Rhythm of profitable investment - Music Broadcast Limited - Initiating Coverage: Angel Broking

Views of Mr. Jaikishan J Parmar(Research Analyst - Mid-Caps, Angel Broking):

Music Broadcast Limited (MBL) owns and operates FM radio stations under the brand names Radio City and Radio Mantra. MBL has 39 radio stations and operates in 37 Indian cities. The company has a strong listenership base in cities like Mumbai, Delhi and Bengaluru.

Outlook & Valuation: We expect MBL to report Revenue / EBITDA / PAT CAGR of 17% / 19.2% / 47.6% respectively over FY2017-19E driven by launches of new stations, increase in advertising rates and improvement in utilization of radio stations. MBL is trading at relatively lower valuations compared to its peer ENIL on FY19E, (MBL is trading at P/E-26.3, P/B-3.1, EV/EBITDA-14.2 as compared to ENIL P/E-34.3, P/B-4.3, EV/EBITDA-18.6). Considering sustainable growth opportunities over the next 5-7 years, most of the CapEx already through and strong parentage, we initiate coverage on MBL with a BUY recommendation and a Target Price of INR434 (31x of FY19E EPS INR14/-.)

Source : Equity Bulls

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