TV Today had entered into DD’s Free Dish platform for an outlay of | 6.0 crore. Such an entry will help the company garner better rural viewership share and, negotiate better terms with advertisers. However, it has led to renegotiations on subscription deals culminating into a quarterly impact of ~| 3.0 crore. The subscription revenue estimates have been curtailed accordingly to | 21.5 crore in FY17E and FY18E, respectively.
Valuation : TV Today has been able to take a hike in ad yields owing to its leadership position in the Hindi news genre. In addition, there has been incremental revenue flow from the English Channel India Today, which has been able to improve its ranking in the English news genre. Expecting TV Today to post 23.5% CAGR in EBITDA with 13.0% CAGR in revenue in FY16-18E. EBITDA margins are expected to expand to 32.1% by FY18E with the complete exit from radio business being an upside risk. They value the stock at a 15x FY18E EPS of | 24.2, arriving at a target price of | 363, maintaining BUY.