Elara Capital’s Taurani also expects 20% YoY revenue growth in FY24 for TVTN’s digital business on a solid recovery in the festive season, i.e., in H2FY23
While TV Today Network’s ad revenue for TV decelerated by 7.4% YoY in FY23, Karan Taurani, SVP- Research Analyst (Media, Consumer Discretionary and Internet), Elara Capital, expects it to grow by 5.5% YoY in FY24 as the positive impact of general elections may accrue in FY25.
He further said the ad revenue in FY23 was down due to a lower inventory fill ratio, poor demand from new age/FinTech brands and intensifying competition in the news segment.
Taurani suggested that a big jump in EBITDA margin is unlikely in the current fiscal year. He also expects 20% YoY revenue growth in FY24 for TVTN’s digital business on a solid recovery in the festive season, i.e., in H2FY23.
He commented, “The TV segment operated at a healthy EBITDA margin of 18.8% in FY23, but a big jump seems unlikely. The digital segment – 21.6% revenue contribution in FY23 – was subdued, with 4.6% YoY growth in FY23, on lower pricing by aggregators, and YouTube/social media, as the latter too saw an overall ad revenue strain. TVTN invested aggressively in content. Hence, the EBITDA margin in this business pared to mere break-even levels in FY23. The investments in content/employee costs have now peaked for digital and better-related growth prospects may prop profitability.”
Elara Capital has pared FY24/25 earnings estimates to 17.2%/7.4%, factoring in lower growth in the TV/digital segments in H1FY23E, on muted ad spend environment. It has also cut its target valuation for the digital business to 2x forward EV sales (from 4x), primarily on lower profitability and higher dependence on third-party to drive scale in ad revenue.
“With a healthy cash balance of Rs 4.7 billion despite a special dividend pay-out of Rs 67/share (35% dividend yield), the core TV broadcasting business, excluding digital valuation (Rs 5 billion – 2x one-year forward EV/sales) and cash balance (Rs 4.7 billion), trades at a compelling 2.9x one-year forward P/E,” he shared.
TV Today Network has reported revenue from operations of Rs 217.14 crore for the quarter ending March 2023, down 10.36% from the corresponding quarter in the previous fiscal where it had recorded Rs 242.26 crore.
Its revenue from television and other media operations was Rs 213.25 crore and from radio broadcasting at Rs 3.89 crore in the last quarter of FY22-23.
The Network reported an 83.6% decline in its consolidated net profit to Rs 5.85 crore for the fourth quarter that ended on March 31, 2023. The company had reported a net profit of Rs 35.69 crore in the January-March period a year ago, TV Today Network said in a BSE filing.
For the fiscal year ended March 2023, TV Today Network’s net profit was down 51.38% at Rs 88.24 crore. It reported a net profit of Rs 181.51 crore in the previous fiscal year.
Its consolidated revenue from operations was at Rs 878.23 crore in FY23, 5.57% lower than the previous fiscal year.
