New Delhi Television
Cluster: Emerging Star
Price target: Rs260
Current market target: Rs230
Not quite the ugly duckling
- 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.
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.