CRISIL revises outlook on HT Media to 'Stable'
CRISIL has revised its rating outlook on HT Media Ltd's Rs 2500 million non-convertible debentures to 'Stable' from 'Positive'.
By ET Online |
MUMBAI: CRISIL has revised its rating outlook on HT Media Ltd���s Rs 2500 million non-convertible debentures to ���Stable��� from ���Positive���; the rating has been reaffirmed at ���AA���. CRISIL has also reaffirmed its rating on the company���s Rs 200 million commercial paper programme at ���P1+���.
The revision in outlook reflects the continued losses made by the relatively new ventures of HT Media; these include Hindustan Times Mumbai edition, the business daily Mint, and frequency modulation (FM) radio operations. Earlier, CRISIL had expected these businesses to break even by 2008; however, they continue to incur losses and are not expected to break even before 2010-11 (April 1 to March 31). In addition, in the current weak economic scenario, it is unlikely that HT Media will be able to sustain its revenue growth and maintain strong profitability.
CRISIL���s ratings on HT Media���s debt programmes continue to reflect the strong position of the company���s flagship English daily, Hindustan Times, in Delhi and the National Capital Region, and the established market position of its Hindi daily, Hindustan. The rating is further driven by HT Media���s robust financial risk profile and operating efficiencies. However, these rating strengths are partially offset by the continued pressure on HT Media���s operating margins from the Mumbai edition of Hindustan Times, which was launched in July 2005, and the company���s entry into the business newspaper (Mint) and FM radio businesses. Further, the company���s operating margins remain susceptible to fluctuations in newsprint prices and economic cycles.
As on March 31, 2008, HT Media had a high net worth of Rs.7.35 billion, a comfortable gearing of 0.32 times, and cash and liquid investments of Rs.3.3 billion. The company registered a year-on-year growth of 15.7 per cent in revenues in 2007-08, with a small decline in margins to 15.8 per cent, from 16.4 per cent in 2006-07. CRISIL believes that the current economic scenario is likely to adversely affect the growth in advertisement revenues and affect the company���s operating margin.
The revision in outlook reflects the continued losses made by the relatively new ventures of HT Media; these include Hindustan Times Mumbai edition, the business daily Mint, and frequency modulation (FM) radio operations. Earlier, CRISIL had expected these businesses to break even by 2008; however, they continue to incur losses and are not expected to break even before 2010-11 (April 1 to March 31). In addition, in the current weak economic scenario, it is unlikely that HT Media will be able to sustain its revenue growth and maintain strong profitability.
CRISIL���s ratings on HT Media���s debt programmes continue to reflect the strong position of the company���s flagship English daily, Hindustan Times, in Delhi and the National Capital Region, and the established market position of its Hindi daily, Hindustan. The rating is further driven by HT Media���s robust financial risk profile and operating efficiencies. However, these rating strengths are partially offset by the continued pressure on HT Media���s operating margins from the Mumbai edition of Hindustan Times, which was launched in July 2005, and the company���s entry into the business newspaper (Mint) and FM radio businesses. Further, the company���s operating margins remain susceptible to fluctuations in newsprint prices and economic cycles.
As on March 31, 2008, HT Media had a high net worth of Rs.7.35 billion, a comfortable gearing of 0.32 times, and cash and liquid investments of Rs.3.3 billion. The company registered a year-on-year growth of 15.7 per cent in revenues in 2007-08, with a small decline in margins to 15.8 per cent, from 16.4 per cent in 2006-07. CRISIL believes that the current economic scenario is likely to adversely affect the growth in advertisement revenues and affect the company���s operating margin.
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