vishnuvega
14-11-2007, 07:52 PM
Prabhudas Lilladher has upgraded the rating of Deccan Chronicle Holdings to ‘buy’ from earlier ‘outperformer’, with a target price of Rs 279. The brokerage believes the decline in stock price is a good opportunity to buy into a solid print media growth.
At the current market price of Rs 165, Deccan Chronicle trades at 13.1 times and 10.7 times FY08E and FY09E EPS estimates of Rs 12.6 and Rs 15.4 respectively, the brokerage says, adding it is the cheapest stock in its peer set.
Prabhudas expects Deccan Chronicle to clock revenue CAGR of 34 per cent in FY07-09E.
In view of the operating margin in first half of 2007-08, the brokerage has revised upward margin estimates for 2007-08 by 335 basis points, while lowering the same by 170 basis points for 2008-09. As a result, earnings estimate has increased by 3 per cent for 2007-08. The company is expected to report 51 per cent CAGR for FY07-09.
Deccan Chronicle results for the July-September quarter were above expectations. The company continues to maintain robust revenue growth with healthy operating margin expansion. Revenue for the September quarter grew by 26 per cent year on year; margin exponentially expanded by 1,148 basis points to 63 per cent. Profit after tax recorded growth of 28 per cent year on year. The company recorded growth of 26 per cent in revenue from Rs1.49 billion to Rs 1.88 billion.
Deccan Chronicle plans to launch its edition in Bangalore by January 2008. This move will mark its entry into Karnataka. The company has invested about Rs 1.6 billion to set-up the required infrastructure. It hopes to achieve a circulation of 1.5-2 lakh copies per day by the end of the first year of operation.
At the current market price of Rs 165, Deccan Chronicle trades at 13.1 times and 10.7 times FY08E and FY09E EPS estimates of Rs 12.6 and Rs 15.4 respectively, the brokerage says, adding it is the cheapest stock in its peer set.
Prabhudas expects Deccan Chronicle to clock revenue CAGR of 34 per cent in FY07-09E.
In view of the operating margin in first half of 2007-08, the brokerage has revised upward margin estimates for 2007-08 by 335 basis points, while lowering the same by 170 basis points for 2008-09. As a result, earnings estimate has increased by 3 per cent for 2007-08. The company is expected to report 51 per cent CAGR for FY07-09.
Deccan Chronicle results for the July-September quarter were above expectations. The company continues to maintain robust revenue growth with healthy operating margin expansion. Revenue for the September quarter grew by 26 per cent year on year; margin exponentially expanded by 1,148 basis points to 63 per cent. Profit after tax recorded growth of 28 per cent year on year. The company recorded growth of 26 per cent in revenue from Rs1.49 billion to Rs 1.88 billion.
Deccan Chronicle plans to launch its edition in Bangalore by January 2008. This move will mark its entry into Karnataka. The company has invested about Rs 1.6 billion to set-up the required infrastructure. It hopes to achieve a circulation of 1.5-2 lakh copies per day by the end of the first year of operation.