Prabhudas Lilladher has given Hold recommendation for Music Broadcast with a target price of Rs. 24 in its research report issued on May 25, 2022

Prabhudas Lilladher’s research report on Music Broadcast

We cut our FY23E/FY24E EBITDA estimates by 15%/12% respectively as yields which are at ~35-40% discount as compared to pre-COVID levels may take longer to recover. However, ad-volumes have shown signs of improvement with inventory utilization of 26%/54%/77%/75% in 1Q/2Q/3Q/4Q respectively which is encouraging. We believe MBL has fared well in this challenging environment with 1) volume market share of 21% in FY22 across main frequencies and 2) 2nd highest client count share of 41% in the industry in 4QFY22. We retain our HOLD rating given 1) strong liquidity position (Rs2,640mn of cash balance as on FY22) 2) stringent focus on cost control and 3) new initiatives taken (long term deals, digital & content integration exercises) to boost sales in this environment (contributed Rs148mn to sales in 4QFY22).

Outlook

Our TP (50% weight to DCF and EV/EBITDA methodology) remains intact at Rs24. We value the stock at 5.5x FY24 EBITDA.

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