Music Broadcast Ltd. share price target

improvement with inventory utilization of 26%/54%/77% in 1Q/2Q/3Q respectively which is encouraging. We believe MBL has fared well in this challenging environment with 1) volume market share of 22% (up 200bps...

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comparison, industry ad-volumes were up 49% YoY. We cut our FY23-FY24 EBITDA estimates by ~5% as yields which are at ~4045% discount as compared to pre-COVID levels may take longer to recover. However, ad-volumes in high yield markets have shown signs of improvement (~7-8% shortfall versus pre-COVID benchmark has narrowed a bit) which is encouraging. We believe MBL has fared well in this challenging environment with 1) volume market share of 20% (highest amongst peers) in...

comparison, industry ad-volumes were up 67% YoY. While our FY23 EBITDA estimates are broadly intact, we cut our FY22 EBITDA estimates by ~7% as onset of 2nd wave has derailed the recovery process since radio is an AND medium of advertising. Further, ad-volumes in high yield markets are still at suboptimal levels (~7-8% shortfall versus pre-COVID benchmark) which is likely to prolong the recovery. Nonetheless, MBL has fared well in this challenging environment with 1) volume market share of 21%...

Music Broadcast (MBL) reported a subdued set of numbers for Q4FY21. Revenues dipped 7.4% YoY to | 42.5 crore due to continued erosion in yields. The company reported 11% YoY growth in volumes in Q4FY21, with yields lower in major stations by 20-25%. Industry volume increased 4% YoY in the quarter. Reported EBITDA was at | 2.9 crore for the quarter while EBITDA margin was 6.2%, down 300 bps YoY compared to adjusted EBITDA margins for Q4FY20 (EBITDA margin for the base quarter was 9.1% adjusted to one off expenses of | 9.5 crore). Consequently, the company reported...

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

Management is targeting cost savings of Rs500-550mn in FY21E. Roughly 50% of the savings will be permanent in nature boosting margins by 300 bps. While MBL's revenue of Rs407mn was in-line with our estimates, EBITDA margin of 10.2% surpassed our expectations of 7.5% led by stringent cost control. Total operating cost stood at Rs365mn for the quarter and annualized savings of Rs500-550mn is expected in FY21E. Roughly 50% of the cost savings is expected to be permanent in nature resulting in 300bps margin...

Board has approved a bonus issue of non-convertible non-cumulative redeemable preference shares (NCRPS) of Rs100 each in the ratio of 1 NCRPS for every 10 equity shares held by non-promoter shareholders. MBL's operational performance (EBITDA loss of Rs30mn) was better than our estimates led by a revenue beat of 20%. Ad-volumes are increasing on a sequential basis with utilization levels in smaller markets almost back to preCOVID levels of ~50-55%. However, metros/tier-1 markets are still lagging...

The radio segment, already under pressure due to macroeconomic slowdown, was hit hard by the Covid-19 led lockdown. Ad spend by corporates/government has almost dried up. While MBL's liquidity position is healthy and ad volume picked up compared to April, we believe a recovery in ad revenue is still one to two quarters away. Hence, we maintain HOLD...

As cost cutting initiatives started bearing fruits, MBL's operational performance (EBITDA loss of Rs153mn) was better than our estimates. Total operating cost stood at Rs296mn for the quarter (down 37.5% YoY) translating into monthly run-rate of ~Rs100mn (in-line with the cost optimization guidance of ~Rs100-110mn given in 4QFY20). Further, with 50% of the cost savings having materialized from reduction in fixed cost which is...

The company indicated that MIB has still not approved the Big FM acquisition and the long stop date has expired, implying that the deal is off the table. They also indicated that post Covid-19, the valuations metrics have...

Operating cost optimized to Rs100-110mn per month during lockdown. Prelockdown monthly run-rate was Rs160-170mn. We cut our EBITDA estimates by 79%/29% for FY21/FY22 respectively as 1) we expect inventory utilization for 28 legacy/11 batch 1 stations to be at 36%/30% in FY21 and 55%/40% in FY22 respectively since COVID-19 is expected to have an adverse impact on the overall demand environment...

We interacted with Music Broadcast (MBL) to gauge the ramifications of Covid-19. MBL witnessed a steep fall in revenues amid the lockdown as ad volumes have dried up both from corporates and government barring few state governments' social message-based ads amid Covid-19 outbreak. We note that MBL already had a distressing year with 9MFY20 revenues and EBITDA decline of 17.8% YoY and 23.1% YoY, respectively, impacted by a steep decline in government as well as other major categories. On the positive side, a third party survey, however, has indicated that daily...

Steep decline in government category leads to revenues drop The company has alluded to weak economic growth for its revenue decline and the same was seen across media segments. Ad volumes were down 20% while realisation were up 3% in 9MFY20. The higher realisations, in our view, are merely owing to a steeper decline in the government category, which are lower yielding. The company indicated that given fiscal stretch, central government category remained muted while non-government ad category has not shown a major improvement in festivities apart from auto...

Music Broadcast (MBL) reported a weak set of numbers impacted by a steep decline in government & event segment. Revenues came in | 62.5 crore (decline of 22.5% YoY), much below our estimate of 10% decline as government and radio led events witnessed a steep decline of ~55% while non-government segment declined 6%. EBITDA came in at | 18.5 crore, down 30% YoY, with margin of 29.6%, down 350 bps, due to lower revenues. PBT at | 12.2 crore, witnessed a steep decline of 45% YoY. However, it reported profit of | 18.5 crore vs. our expectation of | 11.2 crore,...

We cut our PAT estimates by 37.4%/23.4% for FY20E/21E as 1) national advertisers continue to remain apprehensive due to weak macro-economic environment 2) government, the largest category, is witnessing unprecedented cut/delay in ad spends with no signs of revival at least in the near term and 3) there was no visible uptick in ad volumes in the festive season that just culminated. In the top 15 markets, all categories except for auto and finance have reported a de-growth in ad volumes during 1HFY20. Despite such challenging environment RADIOCIT IN maintained its share of...

Revenues came in at | 69.8 crore (decline of 7.8% YoY), lower than our expectation of 1% YoY growth at | 76.5 crore. The underperformance was on account of the company's emphasis on yield improvement (they reported 4% yield improvement). Subsequently, the company let go a few low cost opportunities, which resulted in ~12% volume decline for the quarter. EBITDA for the quarter came in at | 22.4 crore (vs. our expectation of | 25.3 crore) on account of negative operating leverage while margins came in at 32.1%, lower than our expectation of 33%. PAT came in at | 8.4 crore (vs....