Hindi genre leadership drives outperformance
TVTN continued to outperform on ad growth versus peers due to its strong brand recall over peers in the Hindi news genre. This was despite black-out of BARC data in the news genre. We believe, growth momentum may continue near term, led by festive season demand. Aaj Tak has posted 28% higher growth in the TV segment versus pre-COVID levels despite reviving normalcy and unlock unfurling. This proves the resilience of its business model. TVTN’s TV segment is estimated to post 15% revenue growth in FY22E, higher than the industry averages. Digital segment too remains strong with 36.5% YoY growth, despite video OTTs not displaying news channels due to revised digital regulations. Third-party social media apps, YouTube and Aaj Tak’s in-house apps have been driving growth in the digital segment. We continue to believe that a platform-agnostic model will augur well for Aaj Tak to scale up digital revenues. EBITDA margins should likely be in a narrow band of 26-27% as growth in digital and lower losses in radio segment are the only tailwinds, near-to-medium term.
TVTN is trading at inexpensive valuations of 8.8x/7.6x based on FY23E/24E earnings. We raise FY23E/24E PAT estimates 7.9%/12.7%, factoring in better growth and roll-over to September 2022 TP of INR 400 from INR 370 based on 10.5x (unchanged) one-year forward P/E.