Music Broadcast Ltd (MBL) is the 1st and oldest private FM Radio Broadcaster in India with over 15 years of expertise in the Radio Industry. It operates its radio stations under the brand "Radio City". It has grown its presence from 4 cities in 2001 to 37 cities till date. It is present in 12 out of the top 15 cities in India by population. According to AZ Research, MBL reaches out to over 49.60 mn listeners in 23 cities. Under the Phase III Policy, new cities were opened up for auction, pursuant to which the company acquired 11 additional radio stat ions i.e. the New Radio City Stations. Out of these 11, 9 are operational and remaining 2 are expected to start by April 2017. The company also operates its online web radio on web portal planetradiocity, which was launched in 2010. In addition, MBL operates 'Planet Radio City' mobile app that plays various stations such as 'Radio City Freedom', 'Radio City Electronica', 'Radio City Metal', and 'Radio City Smaran' in various languages on mobile and other smart devices. MBL registered revenue and PAT CAGR of 19% and 54% respectively during FY13-16.
- Strong leadership position
- Pan-India presence
- Popular content coupled with strong sales capability
- An experienced and qualified management team
Outlook & Valuation
MBL is the first and oldest private FM radio broadcaster in India with over 15yrs of expertise in the radio industry. The radio industry has registered CAGR of 14.5% between CY11-15 and it is likely to grow at CAGR 16.9% (ahead of TV -15.1%, Film -10.5 and music industry -13.8%) for the next five years. We believe that MBL is in a sweet spot to ride the growth in radio industry due to its Pan India presence, strong leadership position in most populated cities in India, strong brand recall, improving margins as new stations get mature and parentage & brand equity of the promoter. Fresh issue of INR 400 crores would majorly be used for debt repayment. At the upper end of the price band, the stock will trade at PE multiple of 25.3x based on FY17E earnings, which is lower compared to its peer ENIL (expected to grow at 60% CAGR over next 2 years) trading at 80.5x. Addition of new stations in MBL's portfolio will drive its topline and bottomline going forward. We recommend SUBSCRIBE to the issue with long term perspective.
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SPA Securities was promoted by a team of finance professionals in 1995 with an objective to provide value added financial services. Initially, the Group focused as a niche financial solutions provider in corporate finance and wealth management to Indian companies and high net worth individuals. In January 2000, the Group expanded its operations and the range of services. Today, SPA provides services for securities broking, merchant banking, wealth management, financial advisory, corporate finance , risk management and insurance broking.
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