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Jagran Prakashan Ltd Research Report - 12th Aug 2016

Media | Published on Aug 12th 2016

IT

For 1QFY2017, Jagran Prakashan (JPL) reported a 9% yoy growth in its standalone top-line but the growth in PAT was relatively lower mainly due to higher employee and other operating expenditure. On a consolidated basis, the company reported healthy double digit growth numbers on the back of a favorable performance in radio and other businesses. However, circulation revenue growth trailed a bit during the quarter. Standalone - Ad revenue up ~9% yoy, Circulation revenue up ~6% yoy: The company’s standalone top-line grew by 9% yoy to Rs473cr (on back of advertising revenue growth of ~9% yoy to ~Rs333cr, primarily driven by improvement in yields; and circulation revenue growth of 6% yoy to Rs100cr due to increase in cover prices). Further, income from other businesses grew by ~13% yoy to ~Rs40cr. On a consolidated basis, the top-line grew by ~17% yoy on back of strong advertising revenue and other operating income growth. OPM improves: The standalone operating profit grew by ~6% yoy to Rs130cr and the OPM contracted by 80bp yoy to 27.5%, owing to higher employee and other operating expenditure. The net profit grew by 5% yoy on back of poor operating performance and lower other income. Outlook and valuation: Considering Dainik Jagran’s status as the most read Hindi newspaper in the country and its strong presence in the rapidly growing Hindi markets of Bihar, Haryana, Jharkhand, Punjab, Madhya Pradesh and Uttar Pradesh, we expect JPL to benefit the most from an eventual recovery in the Indian economy. Further, the acquisition of Radio City is also expected to boost the company’s profitability, going ahead. Hence, we maintain our Accumulate rating on the stock with a target price of Rs205.

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Accumulate

CMP 184
Target Price 205
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)5,622.88
MCAP NSE (Rs in Cr)5,624.52
P/E (x)21.45
EPS (Rs.)8.02
BV (Rs.)39.41
Div Yield (%)0.00
FV (Rs.)2.00
P/BV (x)4.36
EV/Sales (x)2.94
EV/EBITDA (x)10.56

Shareholding Pattern (%)

Promoter61.0
Foreign16.0
Institution13.0
Corporate8.0
Public & Others2.0
Grand Total100.0

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