Stocks to Buy: 2 shares of Bluechip Media Company down 46% from highs

TV network today

The TV Today network owns the Aaj Tak news channel and is a leader in the Hindi language TV news segment. The company also has several other news channels, namely India Today TV, Aaj Tak tez, Aajtak Desh (Multilingual).

High price 52 weeks Low price 52 weeks Current market price
Rs460 Rs.236 245

The annual figures for the 2022 financial year were rather impressive. The company reported a net profit of Rs 181 crores vs. Rs 131 crores reported in the 2021 financial year. The company’s board recommended a final dividend subject to member approval @ 60% viz. Rs. 3.00 per share having a par value of Rs. 5 for the financial year 2021-2022.

Now, TV Today Network’s stock is down nearly 46% from 52-week highs. The company reported EPS of Rs 30.46 for the year ending March 31, 2022, bringing the p/e to around 8x. The company has very low or negligible debt as well as very high developer equity and the share capital is very low at Rs 29.83 crores. We believe that as economic growth picks up, the stock should do well. Buy the long-term stock.

Zee Entertainment

Zee Entertainment

High price 52 weeks Low price 52 weeks Current market price
Rs 378 Rs 224.25 228

Zee Entertainment’s stock is down 40% from 52-week highs and is once again a TV entertainment industry leader in some segments. Results for the March quarter are not yet known, but we believe the share can generate EPS of around Rs 12 for FY 2022. The shares at Rs 228 are trading at an ap/e of just 18 times , which is again well below the historical p/e averages the company has commanded in the past. The merger with Sony Pictures is a big positive for the company and should be accretive for EPS. The merger of Sony and Zee will create a Rs 14,000 crore juggernaut. It will also result in India’s second largest media company after Disney-Star.

Other than that, given the strength of the brand and the current discounts, we think the stock deserves a better discount. However, as it is, if the markets fall further the stock will drop, but over the long term valuations look decent.

A word on the markets

A word on the markets

Markets have been extremely volatile, but at current levels indices may not have fallen too much, but some stocks have. We believe the indices have held up well, relative to the damage suffered by the market as a whole. Looking at where the broader markets are, it looks like the indices are closer to the 40,000 levels on the Sensex. In fact, the Sensex didn’t drop dramatically, thanks to heists from heavyweights like Reliance Industries and ICICI Bank. If you’re a long-term investor, you can snack on stocks selectively.

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