Here are the
Expert / Analyst Reviews and Recommendations of Music Broadcast Ltd IPOIIFL analysts said,
Although the stock does not look all that promising on a relative valuation basis, our long-term outlook on the radio industry of the M&E space remains positive, which is likely to grow at 16.9% CAGR over CY15-20E. Based on its poplar content, strong sales capability, the advantage of the existing JPL relationship with advertisers, and expansion into new geographies, we are upbeat on the IPO. Long term investors seeking to add weight in the M&E sector should subscribe to the issue.
Angel Broking Analyst Amarjeet S Maurya said,
In terms of valuations, the pre-issue P/E works out to 25.2x its annualised 1HFY2017 earnings (at the upper end of the issue price band), which is lower compared to its peers (ENIL is trading at 79.5x its annualised 1HFY17 earnings). Also, MBL’s EV/sales multiple 6.2x, works out to be at discount to ENIL’s 8.2x. On EV/EBITDA front too, Radio City’s issue appears to be attractive 18.7x v/s. ENIL’s 37.4x. Moreover, MBL has a better margin and ROE profile than its comparable peers. Hence, considering the above positives coupled with attractive valuations, we recommend a SUBSCRIBE on the issue.
Equirus Analyst Depesh Kashyap said,
At upper price band, the Company is being valued at EV/EBITDA of 15x/12x on our FY18e and FY19e estimates respectively. The only other listed player ENIL (Radio Mirchi) is currently trading at EV/EBITDA of 22x on FY18e consensus estimates. One may argue that ENIL is double the size of MBL in terms of revenue and stations, but in our view, given similar growth profile and better profitability, the issue price offers an attractive entry point. We recommend Subscribe
IndSec Analyst has the following Review,
At the upper price brand of Rs 333 the stock is valued at 21.9x FY16 on EV/EBITDA (Pre issue). Its nearest compa-rable, ENIL is trading at 25.9x EV/EBITDA FY16. We have considered EV/EBITDA multiple for comparing the valuations as ENIL is on a expansion spree with spends towards adding new stations as well as increased marketing spend for boosting add reve-nues. We believe that MBL could continue to trade at a discount to ENIL given the relatively lesser market reach and number of stations. However the current discount in valuations is not justified as the profitability and return ratios of MBL stand better vis a vis ENIL. Hence we recommend a SUBSCRIBE on the issue with a medium to long term investment horizon.
Monarch Networth Capital analysts Rohan Admane and Jason Soans said,
Although there are some concerns regarding the sustenance of radio over the long term, we believe the randomness of songs and its inherent aspect of it being a live local companion to listeners will help it to sustain in the long term. We believe MBL is a niche high quality play in the growing radio space and could be viewed as an effective investment avenue for long term investors and hence recommend “SUBSCRIBE” to the issue.
Sushil Finance Analysts Krishna Rana and Manan Divan said
There is only one listed competition namely Entertainment Network (India) ltd, which is owned by Times group and is known as Radio Mirchi. The EPS of ENIL is ` 21 based on which the P/E is around 38.7. Compared to this, Music broadcast has a P/E of around 36
and on FY2016 basis. The Proceeds from the IPO will be used to clear the Debt of the company which is a positive aspect that can be considered as post issue the company will be a Debt free firm. Thus investors can invest for short term.
Emkay Brokerage Analysts Ashish Agrawal and Naval Seth said
At lower/upper price band, the company trades 14x/14.4x on FY19E EV/EBITDA and 24.4x/25x PE. Our estimates for MBL are projections incorporated in JAGP IN. FCF generation to rebound from FY19E as new stations reach EBITDA break-even. Subscribe for Long Term Gains.
Aditya Birla Money Analyst Mahavi Jain said
At the higher end of price band, MBL is valued at PE of~25x and ~32x (pre and post issue) FY17E which is at a steep discount to
largest player, ENIL (~60x). In EV/EBITDA terms, it is valued at ~23x again at ~20% discount. Given experienced management, leadership position in top cities of Mumbai, Delhi, Bangalore, steady financial performance and high return ratios we believe it should command better valuations. We recommend SUBSCRIBE on Music Broadcast Ltd.
Arihant Capital Markets said,
The issue has been offered in a price band of Rs 324-333 per equity share. At the upper price band of Rs 333 the stock is available at P/E of 30.5 (x) based on FY 16 financials.The issue looks fairly valued against its competitor. We have "3 star" rating for the issue.
Prabhudas Liladhar Analysts Nishna Biyani and Keyur Pandya said,
The IPO consists of Rs4bn fresh issue and Rs885m OFS from promoters valuing the business at a Market Cap of Rs19bn implying an EV/EBIDTA of 22x FY17E. We feel the pricing is reasonable considering strong parentage, professional management, debt‐free Balance Sheet post IPO, good growth opportunity & limited Equity offering. Subscribe
Nirmal Bang analyst Akansha Jain said,
Going forward, expansion in different geographies, playing music as per audience preferences and attracting listeners, will help in attracting advertisers and in turn fuel in growth to the company. Company enjoys ROE of 39.6%. On the valuation front, at the given upper price band of issue of Rs 333, as per our estimates, Music Broadcast is offered at PE of 33.4x its FY17E EPS of Rs 10 and FY17E EV / Ebitda of 19.3x which is lower to its peer. We recommend subscribing to the issue.
IndSec Analysts Rahul Dani and Ayush Jain said,
At the upper price brand of Rs 333 the stock is valued at 21.9x FY16 on EV/EBITDA (Pre issue). Its nearest compa-rable, ENIL is trading at 25.9x EV/EBITDA FY16. We have considered EV/EBITDA multiple for comparing the valuations as ENIL is on a expansion spree with spends towards adding new stations as well as increased marketing spend for boosting add reve-nues. We believe that MBL could continue to trade at a discount to ENIL given the relatively lesser market reach and number of stations. However the current discount in valuations is not justified as the profitability and return ratios of MBL stand better vis a vis ENIL. Hence we recommend a SUBSCRIBE on the issue with a medium to long term investment horizon.
