India focused Portfolio Advisory - Exp of 40+years, Das Capital Management and Advisors

Arun Thirumalai

India focused Portfolio Advisory - Exp of 40+years

Das Capital Management and Advisors

Das Capital is a research boutique with an aim to continuously map and plan the investment needs of investors focused on India. We have a six member research team with a combined experience of over 40 years as a part of our investment wing. Our team assisted in the setup of Premji Investments, which was one of India’s first family offices focused to managing Mr.Azim Premji personal wealth. We also serve as a research team to two Indian private equity energy funds “Small is Beautiful” and “KSK Emerging India Energy Fund”.

Equity Bottom-Up

Hindustan Media Ventures / Equity Bottom-Up

<ul><li>Hindustan Media Ventures Ltd (HMVL) is a subsidiary of HT Media Ltd. which runs “Hindustan”, the second most read daily in India with a dominant number 1 position in Northern Hindi speaking states of Bihar, Jharkhand and Uttarakhand  (average 70% market share) and a No 2 position in Uttar Pradesh(UP).</li><li>Higher GSDP growth compared to national average and increasing literacy level in the key states where the company operates may increase both advertisement yields and circulation revenue.</li><li>Its fast growth in Uttar Pradesh which is the largest state in terms of advertisements is expected to boost EBITDA margins as the company has witnessed break even in UP in FY15. We expect a 3.4% expansion in overall EBITDA margin by FY18.</li></ul><p>We believe that the company is undervalued as compared to its peers, mainly on account of its high cash levels. However,management has consistently reiterated that they are preparing for a “war chest” for future acquisitions. The stock is currently trading at 9.42x FY17e EPS and 8x FY18e EPS. In our opinion, HMVL is an ideal play in the Indian consumer and media sector given its attractive valuation, which limits downside risks, especially after the recent market rally.</p><p> </p>

Hindustan Media Ventures Ltd (HMVL) is a subsidiary of HT Media Ltd. which runs “Hindustan”, the second most read daily in India with a dominant number 1 position in Northern Hindi speaking states of Bihar, Jharkhand and Uttarakhand  (average 70% market share) and a No 2 position in Uttar Pradesh(UP).Higher GSDP growth compared to national average and increasing literacy level in the key states where the company operates may increase both advertisement yields and circulation revenue.Its fast growth in Uttar Pradesh which is the largest state in terms of advertisements is expected to boost EBITDA margins as the company has witnessed break even in UP in FY15. We expect a 3.4% expansion in overall EBITDA margin by FY18.We believe that the company is undervalued as compared to its peers, mainly on account of its high cash levels. However,management has consistently reiterated that they are preparing for a “war chest” for future acquisitions. The stock is currently trading at 9.42x FY17e EPS and 8x FY18e EPS. In our opinion, HMVL is an ideal play in the Indian consumer and media sector given its attractive valuation, which limits downside risks, especially after the recent market rally. 

Hindustan Media Ventures Ltd. ( HMVL) - Is Excess Cash in the BL a Drag? We Don't Think So..