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Please tell me what has happened with Deccan Chronicle? It is a good stock from all angles- yet it has been touchng new lows everyday. I have bought nearly 555 shares at an avg price of 215/sh. i plan to hold it for 6 months more for a target price of 300/sh.
I read somewhere in a message boards that there is a rumour in the market of hiving off/ selling off something which will dent its cash flow, etc. Yet i cannot visualise that it could have youched 170 levels. Even when the market corrected severely in past occassions it mereley touched 210 levels.
(The company has three subsidiaries - Asian Age Holdings, Sieger Solutions and Odyssey India. The consolidated results are not much different from the standalone results. The consolidated net profit for FY 2007 was around Rs 165 crore. The subsidiaries are still not generating much profits currently, but definitely have good potential.
Asian Age - publishes "Asian Age". Sieger Solutions - sells advertising space for Deccan Chronicle at 10% commission. Odyssey India - book retail chain.
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The company has 24,03,58,081 shares outstanding ~ 24 crore shares.
eps for FY 2007 was around 6.71. (The number of shares in FY 2007 were actually less than current and thus reported eps was higher).
Net profit for FY 2008 is expected to be in range of Rs 250 - Rs 320 crore. (Different analysts have different estimates).
This would mean an eps of Rs 10.4 - Rs 13.3.
FY 2009 eps is estimated to be in the range Rs 14.5 - Rs 18.33.
If we give a conservative forward PE of 18, the stock may be in the range Rs 260 - Rs 330 by April 2008.
The target of Rs 300 seems achievable, but you may have to hold a bit more than 6 months for that.
In fact, looking at the valuations, even I am thinking of buying a few shares.
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90% of DCHL's revenues are from advertising alone. It doesn't have any other major source of revenue. I wonder what rumor you are talking about.
The stock is currently facing some selling pressure. It may be institutional selling.
The stock has good support in the Rs 145- Rs 150 range. You may buy a few shares around that level to average down your cost. If Rs 1 lac is already too big a position for you, then you should not average.
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Deccan Chronicle is one of the fastest growing English newspapers. The fast growth may continue for a few quarters more. The company is growing on a small base and thus the growth rates are high. As long as DCHL is exploring new markets, growth will follow. Current valuations are attractive. Investors who hold for 2 years or so, will reap benefits.
Beyond that, I would not like to make any forecasts. Media is a very competitive business and entry barriers are low. New competition is always coming up. Just like DCHL snatched a big slice of the market from its competitors, some other newspaper may eat away into DCHL's market.
Media can never be a buy-and-forget sector. It has to be tracked regularly.
Dear alchemist,
Thanks for your prompt reply and detailed explanation. I must congratulate you for doing a yeoman's service for small investors like us.
As re: DCHL. it is in the growth stage. It's Chennai edition has pipped the Hindu as No. 1. It will soon be starting the Coimbatore and one more edition.
Once the Profit from its retail subsidiaries also get accounted for it's profit will only increase. also it will keep benefiting from Re. Appreciation.
I will certainly average at its 200 dma at 151/sh and from then on i will sell on every rise at my pre-determined price targets in parts.
I will certainly average at its 200 dma at 151/sh and from then on i will sell on every rise at my pre-determined price targets in parts.
The stock's 200 DMA is 188 or so.
Around 140, the stock would have retraced 50% of its rise from Rs 24 to Rs 253 levels. This would be a support technically. I used 150 as a support level as it is a sort of "round figure" and many investors may get in at that level.
DCHL is no doubt a good company to hold. It has been doing great business & making forays into new sunrise businesses. Being from media business myself, I think DCHL will be rewarding in medium to long run.
However, I heard somewhere that promoters are planning a buy back of shares. Kindly check.
You have heard it correctly. IT's now confirmed that there is a buy back offer of DCHL news. The decision may be taken on Oct 26th. Hold your breath and i expect the buyback offer would be at least at 250+ levels.
It seems like triple bottom formation on this stock.
Previous closing is 152.20;
Immediate targets would be:
Trgt 1: 167 (23.6% Fibonacci retracement)
Trgr 2: around 180 (Where 200 EMA line would resist in coming day).
Last edited by ashish_jain11 : 1st May 2008 at 06:27 PM.
I have made some investments in Deccan chronicle. As i think most of the bad news may be behind for this stock. It has announced a buyback @ Rs. 100 and given a dividend 100%. It has its subsidiaries which further add value to it.
I know earlier we would have jumped in to buy at 125 levels but now people are not ready to buy it at even 44/sh.
I will buy some more for just trading purpose at the present level of 35-43/sh.
I have made some investments in Deccan chronicle. As i think most of the bad news may be behind for this stock. It has announced a buyback @ Rs. 100 and given a dividend 100%. It has its subsidiaries which further add value to it.
I know earlier we would have jumped in to buy at 125 levels but now people are not ready to buy it at even 44/sh.
I will buy some more for just trading purpose at the present level of 35-43/sh.
What do you say?
On the face, the stock looks attractive to me.
It is trading at 5 times trailing earnings and is the cheapest stock in the paper media space.
There are 100's of stocks in the market that look ridiculously attractive, but unless the market moves up, these stocks will remain where they are.
Money moves up stocks and not valuations.
I am not sure if this is a trading buy. The stock seems very weak on the charts and there is no reason why anyone should try to trade this stock.
There is support around Rs 40 if you want to buy it from trading.
As per my last posted chart in post 13, Triangle correction was very severe!
I have a bit different view
- We have almost corrected to 11% of the Top made at 271!
- We have formed a trading range near same.
- If you can buy around 37, you can target 50 EMA at 54!
- Keep stop loss at 35.89 ..... 3% stop!
Notes:
- 11% correction concept exists in market as discovered by ICICI vivek patil....
- WIPRO corrected to 11% in tech meltdown in year 2002!
- This range formed after that was tested 2-3 times before upside breakout!
For more details refer weekly analysis by him for this week!
Last edited by man4urheart : 28th December 2008 at 12:45 AM.
- We have almost corrected to 11% of the Top made at 271!
How does 30/- come as 11 % of 271 ? may you explain ? IS it simple maths calculation or else ?
Just for learning ,it would be great help if you can !
- We have almost corrected to 11% of the Top made at 271!
How does 30/- come as 11 % of 271 ? may you explain ? IS it simple maths calculation or else ?
Just for learning ,it would be great help if you can !
I remember during 2008 downturn, you purchased Deccan Chronicle, and it almost doubled in less than one year. As I remember, you were looking for debt free companies and Deccan was one of them. Other one was Precision pipes.
I am watching both stock from last one month, Deccan is in a regular downtrend. Do you know any reason for that?
While Precision Pipe is still stable no down movement in it.
Does Deccan fundamentals changed? Is it worth buying at this level?
Deccan is in a regular downtrend. Do you know any reason for that?
Does Deccan fundamentals changed? Is it worth buying at this level.
Deccan Chronicle is going to merge two of its subsidiaries with itself - Deccan Chargers Sporting Ventures and Odyssey India.
This has not gone down well with the markets.
(Earlier, it was expected that these subsidiaries would be sold-off partially or fully to unlock value).
I don't have the financial details of two subsidiaries and so can't comment much about them.
However, I feel that at current price of 69, there is definitely some value in Deccan Chronicle and the stock should bottom out anywhere between 56 and 62.
Deccan Chronicle is going to merge two of its subsidiaries with itself - Deccan Chargers Sporting Ventures and Odyssey India.
This has not gone down well with the markets.
(Earlier, it was expected that these subsidiaries would be sold-off partially or fully to unlock value).
I don't have the financial details of two subsidiaries and so can't comment much about them.
However, I feel that at current price of 69, there is definitely some value in Deccan Chronicle and the stock should bottom out anywhere between 56 and 62.
The merger has been approved already in the board meeting and likely to go through.
Quote:
25th-Jan-2011 08:53Source: NSE
DECCAN CHRONICLE HOLDINGS LIMITED Outcome of Board Meeting
Deccan Chronicle Holdings Limited has informed the Exchange that the Board of Directors of the Company at its meeting held on January 24, 2011, inter-alia, has approved a Scheme of Amalgamation ('the Scheme') for merger of company's wholly owned subsidiaries viz., Deccan Chargers Sporting Ventures Ltd.; and Odyssey India Ltd. with itself under the provisions of Sections 391 to 394 of the Companies Act, 1956.The Appointed date of the Amalgamation is April 01, 2010 and the Scheme is subject to the sanction of Hon'ble High Court of Andhra Pradesh, Hyderabad. The transferor companies being wholly owned subsidiaries no fresh shares will be issued by the company upon coming into effect of the Scheme
We are lowering our target P/E multiple from 12x to 10x owing to concerns relating to the merger of its 100% subsidiaries, Deccan Chargers Sporting Ventures, Odyssey Indian and Netlink Technologies with itself
and high volatility in garnering advertisement volumes owing to the political instability in Andhra Pradesh.
At Rs 81, the stock is trading at attractive valuations of 8.2x FY2013E EPS of Rs 9.9.
We maintain a Buy on the stock, with a SOTP target price of Rs 128 based on:
1) 10x FY2013E earnings for its core print business fetching Rs 98/share, and 2) Rs 30/share value for the IPL Team
(30% discount to the per share value calculated, based on USD 225mn floor price for new teams’ auction),” says Angel Broking research report.
Are you averaging DCHL around Rs 50? I am expecting it to bounce back from here?
If not it may go in its deep older days. That might happen in crude price tops up around 130 to 150 $.
Is there any reason that you bought this and what makes you to do averaging?
I don't even think about this unless I get it below Rs 50.
Happy Investing!
I had bought 100 shares at 68.80 (all inclusive).
At 68.80, the market value of DCHL was
= 243472219 X 68.80 = Rs. 1675 crore.
My expectation is that DCHL will report a profit of at least Rs 160 crore for FY 2012.
When I had bought the stock, it was trading at around 10 times its forward earnings. Today, it is even cheaper.
I feel that "10 times forward earnings" is a good price to pay for a media business like DCHL, especially considering the strong cash flows that the company has.
(The company has maintained a good dividend payout ratio of 25%-30% in the last few years.)
The balance sheet is stress-free too. At the end of FY 2010, the company had a debt of 342 crore, fixed deposits of 550 crore and cash of 42 crore. Current Liabilities of 436 crore were almost matched by Debtors of 196 crore and Loans and Advances of 186 crore.
Finally, if one considers DCHL's 100% stake in "Deccan Chargers" team, the stock looks even more attractive. Last year, Kochi and Pune teams had been sold for Rs 1500 crore each.
If nothing more, "Deccan Chargers" is at least worth Rs 500 crore. Today, at Rs 64, the market value of DCHL is just Rs. 1558 crore.
Question is will it jump back and bottom is made? There is more to come?
Are you saying one can go long with 53 rs stop loss?
Quote:
Originally Posted by man4urheart
I think it is a good buy at this price! but not sure why it is crashing!
I am not sure why the stock crashed, but it crashed after CNBC TV18 flashed the news about Mauritius DTAA.
According to NSE's shareholding pattern FIIs own 12.37% of the company. I don't think DTAA revision would really mean much for Deccan Chronicle.
I am already long, but it is an investment and not a trading position.
Yesterday's volume was above-average, but it wasn't high enough for me to call a bottom. There have been 5 other days in 2011 on which volumes higher than yesterday's were recorded.
My expectation is that DCHL will report a profit of at least Rs 160 crore for FY 2012.
When I had bought the stock, it was trading at around 10 times its forward earnings. Today, it is even cheaper.
I feel that "10 times forward earnings" is a good price to pay for a media business like DCHL, especially considering the strong cash flows that the company has.
(The company has maintained a good dividend payout ratio of 25%-30% in the last few years.)
The balance sheet is stress-free too. At the end of FY 2010, the company had a debt of 342 crore, fixed deposits of 550 crore and cash of 42 crore. Current Liabilities of 436 crore were almost matched by Debtors of 196 crore and Loans and Advances of 186 crore.
Finally, if one considers DCHL's 100% stake in "Deccan Chargers" team, the stock looks even more attractive. Last year, Kochi and Pune teams had been sold for Rs 1500 crore each.
If nothing more, "Deccan Chargers" is at least worth Rs 500 crore. Today, at Rs 64, the market value of DCHL is just Rs. 1558 crore.
Did you use consolidated accounts? I see different numbers for debt and cash?
ICICIdirect.com has maintained hold rating on Deccan Chronicle with a target of Rs 69 in its May 17, 2011 research report.
“Deccan Chronicle reported its consolidated results for Q4FY11 which included numbers of Odyssey and Deccan Chargers along with the Print Business. The numbers are not comparable to earlier quarters, but look disappointing with ad revenue de-growth of ~17% YoY. The company wrote off IPL league charges to the extent of ~Rs 44 crore. Deccan Chronicle reported EBITDA loss of Rs 19.9 crore. Management has indicated that the Print business had an EBITDA margin of ~37% in Q4FY11. The company reported net loss of Rs 46.6 crore. Buy back of shares from open market would open from May 16, 2011 to January 3, 2012.”
Did you use consolidated accounts? I see different numbers for debt and cash?
No.
I will have to relook at the numbers of Deccan Chronicle. As the two subsidiaries have now been merged with the parent company, the financial statements will change substantially.
I will have to relook at the numbers of Deccan Chronicle. As the two subsidiaries have now been merged with the parent company, the financial statements will change substantially.
Alchemistji and other friends ,
Did anyone get a chance to relook at the numbers ? Is it a sell on the rally or wondering is it really worth holding it for an year more ?
Deccan Chronicle Holdings
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