Music Broadcast skyrockets 20% on sequential improvement in Q2; Declares bonus issue of NCRPS

Investors picked Music Broadcast stock on the back of improvement compared to the previous quarter amid Covid-19 pandemic.

Oct 23, 2020 10:10 IST India Infoline News Service

Radio broadcasting stations company, Music Broadcast clocked upper circuit of Rs21.35 per piece on Sensex during Friday's opening session, resulting in a whopping 20% gain in stock price. Investors bullish sentiment was driven despite the company recorded a net loss of Rs6.49cr for the quarter ending September 2020 (Q2FY21), compared to the net profit of Rs18.51cr a year ago same period. In June 2020 quarter, the company reported a loss of Rs13.89cr.

Revenue from operations stood at Rs30.08cr in the quarter under review, compared to Rs62.53cr in the corresponding period of the previous year. The latest revenue has improved as against the previous quarter where profit was at Rs14.36cr.

Apurva Purohit, Director said, "The gradual opening up of the economy has led to a partial recovery in business sentiments and the M&E sector has also followed a similar trajectory with improving performance in each month with an increase in ad volumes in the September quarter as compared to June quarter."

Purohit added, "At MBL we have maintained our focus on new revenue initiatives, securing long term deals and tactical innovations which resulted in Radio City outperforming the industry yet again with a growth of 171% in ad volumes sequentially and continued leadership in market share."

He also said, "Our focus on cost prudency and improving collections has helped us further strengthen our Balance Sheet and we continue to maintain a healthy liquidity position with more than Rs243cr as cash and investments with zero debt. This quarter we achieved positive Cash Profits and expect an improving performance hereon."

Investors picked Music Broadcast stock on the back of improvement compared to the previous quarter amid Covid-19 pandemic. Also, the company's board approved the issuance and allotment of  Bonus Non-Convertible Non-Cumulative Redeemable Preference Shares.

As per the recommendation, the company will issue one bonus non-convertible non-cumulative redeemable preference shares for every ten equity shares held by the non-promoter shareholders. The record date will be announced in due course.

On the issue, Purohit said, "Subject to the regulatory and other approvals, the board has approved a bonus issue of non-convertible non-cumulative redeemable preference shares (NCRPS) of Rs.100/- each in the ratio of 1:10 i.e. {1 (One) bonus NCRPS for every 10 (Ten) equity share held} by non-promoter shareholders. These are redeemable on expiry of 36 months at a premium of Rs20/- and are proposed to be listed."

Further, Purohit said, "The said issuance of NCRPS will be through scheme of arrangement; draft of which has also been approved by the Board. This reaffirms our commitment to our shareholders who have demonstrated their continued faith in the company and its management."

Going forward, "With the festive season round the corner, we expect the pace of recovery to sustain in the coming quarter too."

At around 10.32 AM, the company maintained upside and was trading at Rs20.60 per piece surging by 15.73% on Sensex. 

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