Q3FY21 Company Update - Music Broadcast - ICICI Direct

Music Broadcast (MBL) reported subdued set of numbers for Q3FY21. Revenues dipped sharply by 41.6% YoY to Rs. 40.7 crore on the back of lower ad yield. Reduction in operating costs during the quarter was again a positive. EBITDA was at Rs. 4.2 crore, down 80.7% YoY as operating performance was impacted by lower topline. Consequently, the company reported PAT of Rs. 7.3 lakh, down ~99% YoY.

Valuation & Outlook

Radio remains the worst hit media segments during Covid-19 induced lockdown. While ad volumes are back (and above) pre-Covid levels and ad volume growth of 9% YoY is a positive sign, ad realisation is still lower sharply. We believe ad yield backed full revenue recovery is still few quarters away. Strong liquidity position and reduced opex will offer comfort to MBL in near term. Issue of NCRPS is still attractive to shareholders at the CMP (~42% pre-tax yield). We roll over our valuations to FY23E and maintain BUY rating on the stock with a target price of Rs. 27/share (vs. earlier TP of Rs. 25/share). We value the stock at an average of 7x FY23E EV/EBITDA and 17x FY23E EPS.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MusicBroadcast_CoUpdate_Jan21.pdf

Shares of Music Broadcast Ltd was last trading in BSE at Rs.22.95 as compared to the previous close of Rs. 22.85. The total number of shares traded during the day was 3386 in over 21 trades.

The stock hit an intraday high of Rs. 22.95 and intraday low of 22.55. The net turnover during the day was Rs. 77245.

Source : Equity Bulls

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