Summary
of Contents
STOCK UPDATE
New Delhi Television
Cluster: Emerging
Star Recommendation: Buy Price target: Rs260 Current market
target: Rs230
Not quite the ugly
duckling
Key points
-
New Delhi
Television (NDTV)'s performance on the bourses has remained
sluggish over the last few months due to increased competition and
the company's unimpressive Q2FY2007 results.
-
While the
other media companies like Zee Telefilms and Television Eighteen
India (TV18) have soared on catching the investors' fancy, NDTV
has lagged behind in the last three months. If we compare the
market capitalisation to sales (Mcap/Sales) of the major media
companies, we find that the gap between the valuation of these
companies and that of NDTV is alarming. This leads us to believe
that the market's reaction to NDTV's non-performance is
overdone.
-
NDTV has two
potential triggers. One, the demerger of Zee News and the listing
of Global Business News (GBN), which would provide better
valuation comparables. Two, a new business model that would
provide more clarity about the news business, leading to improved
valuations.
-
We see merit
in NDTV's media property and evolving business model, and continue
to maintain a Buy on the stock with price target of Rs260.
SECTOR UPDATE
Pharmaceuticals
Ondansetron:
Impact on Indian players Subsequent to the expiry of the
Ondansetron patent on December 24, 2006, Dr Reddy's Laboratories (Dr
Reddy's) got the marketing exclusivity for tablets while Wockhardt
got the generic approval for injection. The impact of the
developments has been
discussed. |