After a 50% rally, this digital media stock is down 18% in the past two days. here’s why

Despite the geopolitical turmoil, a few stocks have managed to offer excellent returns to their shareholders.

Among the very few, Quint Digital Media is one such stock that has jumped 27% in the past two months. In the last five trading sessions alone, shares of the media company have gained 21%.

However, due to weak market sentiment, shares of the small-cap media company hit a 10% lower circuit on BSE yesterday, before rallying.

Quint Digital Media is India’s only new-age digital media group listed on an Indian stock exchange.

What drives the rally?

Last week, the industrialist Gautam Adani hit the headlines when he announced his entry into economic news with Raghav Bahl, the founder of Network18. Raghav Bahl-led digital business news platform Quint Digital Media will now have Adani Group as an investor.

The digital media group entered into a binding term sheet agreement with Adani Group on March 1, 2022. As part of the term sheet, Adani Group will acquire a minority stake in Quintillion Business Media (QBM).

The proposed transaction with Adani Group relates solely to QBM, the digital business information platform, and not in relation to any other digital media or media technology properties owned by Quint Digital, such as The Quint, Quintype Technologies, thenewsminute and Youthkiawaaz.

The transaction is subject to standard due diligence and the signing of definitive documents. To date, Quint Digital has signed a memorandum of understanding with Adani Properties for the proposed sale of a minority stake in QBM controlled by Quintillion Media (material subsidiary).

With this deal, Adani is poised to become the second major player in the media industry after Network led by Mukesh Ambani18.

Management perspective on the acquisition

According to Sanjay Pugalia, CEO, Adani Media Ventures said that the company intends to lead the way for new age media across different platforms.

He further added,

The adoption of technology and India’s increased ability to consume information has radically transformed the way the media is expected to deliver authentic information.

As Quintillion Business Media CEO Anil Uniyal said:

Given Adani Group’s proven track record of execution, their support in realizing QBM’s ambitions will lay the foundation for accelerating business growth and scaling QBM’s high-quality content to Indian audiences. .

India has the largest youth population in the world, which is driving digital media consumption. Growing demand for on-demand digital news services has been driven by improved 3G and 4G internet coverage and rapidly falling data costs.

In India, the consumption of online information is exploding at the same rate as the consumption of traditional media. Legacy media companies are also popular in the online space. This bodes well for the company.

What is the deal with Bloomberg Media and Quintillion Media?

QBM is a business and financial information company and also operates a leading media website – Bloomberg|Quint.

Interestingly, Bloomberg Media and Quint announced on March 1, 2022 the restructuring of their partnership in India. The two companies have ended their joint venture in favor of a new content licensing agreement.

Bloomberg and Quintillion Media will no longer collaborate on content but will continue to distribute Bloomberg content in India through a licensing agreement.

In April 2016, Quint and Bloomberg had formed a 74:26 joint venture in India and planned to launch a business news channel as well as the portal.

While the portal was launched in 2017, the company was unable to obtain a license to operate a TV channel from the Ministry of Information and Broadcasting (MIB).

Focus on the company’s finances…

For the December 2022 quarter, the Company’s net income increased 516.7% to 11.1m against 1.8m in the previous quarter a year ago. Its operating revenue increased by 48.5% to reach 92.5 M compared to the December 2021 quarter.

Quint Digital had marginal debt of 2m as of March 31, 2021.

Key Parameters

( m)

December 21

December 20

March 21st

March 20

Net sales

93

62

211

140

Expenses

52

45

Profit before tax

16

12

-19

-276

Profit after tax

11

2

-19

-275

The net profit margin

12%

2.90%

-8.8%

-196%

Source: Equitymaster

Who is Raghav Bahl?

Raghav Bahl is an Indian businessman, serial entrepreneur and investor best known for his past owning several TV channels including TV18 India.

He was the founder, majority shareholder and managing director of Network18 Group, a media group which he founded in 1993 and which has become one of the largest collections of media properties in India.

After leaving Network18 Group, Bahl co-founded Quintillion Media Pvt Ltd with his wife Ritu Kapur. This media group controls Thequint.com.

Apart from founding and developing Network 18 and The quint, Mr. Raghav also created moneycontrol.com, bookmyshow.com, firstpost.com, yatra.com, among others.

In October 2018, Bahl’s Quintillion Media, Noida and his Delhi home were raided by income tax officers. The Enforcement Directorate (ED) had filed a money laundering complaint against the media baron in 2019 for allegedly laundering funds to purchase an undisclosed foreign asset.

However, in December 2021, the Supreme Court granted interim protection to a media entrepreneur in a money laundering case.

How Quint Digital Media stock fared on the stock market…

Quint Digital Media shares opened the day at 505.1 on BSE yesterday.

Its share price closed at 480.3 (down 10%) on BSE.

At its current price, it is trading at a P/E of 271.94.

The stock hit a 52-week high in 638 and minimum of 52 weeks of 281 on March 4, 2022 and March 5, 2021, respectively.

Over the past 30 days, Quint Digital Media’s share price is up 15.1%. Over the past year, the company’s share price has risen 62.8%.

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About Quint Digital Media

Quint Digital Media (formerly known as Gaurav Mectantiles) operates as a digital media company. Gaurav Mectantiles was previously engaged in ship breaking, trading and investing.

Now, the Quint offers news through platforms in various categories such as politics, business, opinion, entertainment matters, sports, technology, women’s issues, health and fitness, blogs, hot threads, photos, videos and international news.

Quint Digital Media serves clients in India.

For more details on the company, you can view Quint Digital Media’s fact sheet and quarterly results on our website.

Warning: This article is for information only. This is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com

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