Network18 Media hits over 11-year high on heavy volumes; up 42% in 4 days

In the past three months, the market price of the company has more-than-doubled as against a 0.56 per cent rise in the Sensex.

Shares of Network18 Media & Entertainment hit an over 11-year high of Rs 102.75 after they rallied 9 per cent on the BSE in Friday's intra-day trade amid heavy volumes in an otherwise subdued market.

The stock of the Reliance Group advertising & media company was trading higher for the fourth straight day, surging 42 per cent during the same period. It was trading at its highest level since August 2011.

The Company is mainly engaged in the business of digital news and magazines publishing. Network18's listed subsidiary TV18 owns and operates the broadest network of 57 channels in India, spanning news and entertainment genres. The company is promoted by Independent Media Trust of which Reliance Industries Limited is the sole beneficiary.

At 11:48 am, Network18 Media was trading 9 per cent higher at Rs 102.50, as compared to a 0.29-per cent decline in the S&P BSE Sensex. Trading volumes on the counter jumped over three-fold. A combined 18 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

In the past three months, the market price of the company has more-than-doubled or is up 102 per cent, against a 0.56 per cent rise in the Sensex.

For July-September quarter (Q2FY22), Network18 Media reported a strong 53 per cent year on year (YoY) growth in its consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) at Rs 253 crore. Operating margin improved to 18.2 per cent from 15.6 per cent in previous year quarter. Revenue grew 31 per cent YoY at Rs 1,387 crore, driven by viewership.

The company said Viacom18 is building a strong sports portfolio; acquired rights to FIFA World Cup’22 and 3 major football leagues. Voot's digital exclusive property, Bigg Boss OTT, drives substantial growth in paid subscriber base. The management said the outlook is looking quite promising from a medium term perspective.

Network18's consolidated free cash flow turned positive for the first time in the last four years, driven by the increase in profitability and favorable working capital changes, leading to decrease in debt. "We expect the company to further pare down its debt levels in the coming years which would aid in profitability improvement. The parent company’s incremental investment into content and distribution is beneficial for the company as it can offer bundled services and retain customers," HDFC Securities said. The brokerage firm has a target price of Rs 106 per share for the stock.