Jagran prakashan analysis


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Jagran prakashan analysis

  1. 1. K.Keerthi DM14229 1
  2. 2. INDUSTRY & COMPANY •The Indian M&E Industry grew from INR728 B in 2011 to INR 820 billion in 2012, registering an overall growth of 12.6%. •The sector is projected to grow at a healthy CAGR of 15.2% to reach INR1661 B by 2017- FICCI - KPMG •Regional media continues to grow on a strong growth trajectory, especially in the print and television sector. •The out of house advertising sector has also seen higher rates of growth in transit advertising. •There is hence an increasing need to provide 360 degree solutions to advertisers and provide multiple platform to reach out to consumers, wherever they are. About 90 per cent of print readers in India consume content in Hindi and Regional languages. 2
  3. 3. BUSINESS •Jagran Prakashan Ltd (JPL) is India’s leading media and communications group, with its main interests across Newspapers, Outdoor, Internet, Magazines, Below the Line marketing solutions, and Mobile Value Added Services. covers all of India as its footprint – and is amongst one of the largest media conglomerates in the country. •Jagran Prakashan, publisher of the leading Hindi newspaper Dainik Jagran, has embarked on a strategy to leverage its dominant position in the newspaper market in northern India to have a holistic business model encompassing all major media avenues. SOURCE OF VALUE CREATION: •Play on growth in print media •King of Hindi heartland •Holistic business model encompassing major media avenues DRIVERS: •Demand in regional print media increasing •making it the preferred medium for advertisers COMPETITION: •Dainik Jagran : King of Hindi heartland •Readership greater than top 3 English dailies •Advertisers’ focus shifting from metros to nonmetros •Creating a new stronghold in Punjab •Flanking strategy to maintain leadership •De-risking business Out-of-Home (OOH): Future growth avenue Event Management business SMS and Internet New regional financial newspaper 3
  4. 4. English dailies tend to be hit harder in a slowdown, in part because they thrive in the metros. RISKS & CONCERNS Raw material cost Intense competition Performance of new brands Economic slowdown OOH business Event Management 4
  5. 5. MANAGEMENT Dainik Jagran has a very strong and experienced management led by Mr MM Gupta who is well respected in the industry. All the business are led by people with strong experience in their respective domains. M M Gupta :Current Chairman & Managing Director. Has held various key positions in the industry – Chairman of United News of India; President of Indian Languages Newspaper Association, Council Member of Audit Bureau of Circulation, Member of Press Council of India, etc. Mr Sanjay Gupta CEO and Editor Mr Kishore Biyani Independent Director Sir. A. O’Reilly Non-Executive Director Mr.Sanjay has over 23 yrs of experience in print media and is responsible for operations in the north. He is also Director of IIM Lucknow and Motilal Nehru Institute of Technology, Allahabad. Mr. Biyani is MD of Pantaloon Retail (India) Ltd. His contributions to the retail industry have been recognized with several awards Sir Anthony was the Chairman and President of HJ Heinz Company and a member of the board of the NYSE. He has been a director of Independent News & Media PLC since 1973. Sir Anthony joined the Board on July 25, 2005 as a nominee of INMIL. 5
  6. 6. FINANCIALS 6
  7. 7. FINANCIALS contd’ 7
  8. 8. PEER GROUP ANALYSIS Jagran Deccan Zee Sun TV Prakashan DB Corp Chronicle HT Media Entertain Network Mar '12 Mar '13 Sep '12 Mar '12 Mar '13 Mar '13 Dish TV Mar '13 P 86.50 312.00 3.79 72.60 265.00 350.80 47.15 P/E 15.23 24.80 (0.08) 10.68 39.43 20.23 (76.05) P/B 3.64 5.33 7.90 3.63 7.54 4.78 (32.29) Market cap 2,889.29 Net Debt 311.86 137.39 876.02 876.02 876.02 876.02 876.02 cash 49.27 116.06 111.94 111.94 111.94 111.94 111.94 EV 3,151.88 EV/EBITDA 9.33 KEY INVESTMENT ARGUMENT •Strong presence in tier II/III towns across the Hindi •Speaking belt with leadership position in UP which is the largest Hindi print market •Footprint expansion led by Mid-Day and 'Nai Duniya’ acquistions •High dividend pay-out 5,650.57 5,053.68 5,671.90 5,817.76 13.87 (18.87) 5,053.68 5,053.68 5,817.76 5,817.76 24.37 5.93 5,053.68 5,817.76 4.17 5,053.68 5,817.76 8.43 DM14229_K.Keer thi.xlsx 8
  9. 9. VALUATION & PRICE Industry average Valuation P/E 17.73 EPS 5.68 100.73 /- P/B 4.34 BV 23.76 103.20 /- EV/EBITDA 12.93 EBITDA 337.98 4,371.20 Cr RECOMMENDATION •Jagran Prakashan’s (Jagran) Q1FY14 operating performance was ahead of estimates, on account of higher‐than‐expected advertising revenue growth and robust circulation revenue growth. •Improvement in advertising revenues and upcoming elections provide better‐than‐earlier revenue growth visibility BUY 9
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