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JAGRAN PRAKASHAN (JPL): BUY, TP-Rs165 (39% upside)
What’s the theme?
We like JPL for its its leadership position in UP (the largest print market in terms of readership and print ad
value), strong position in growing regions like Bihar and Jharkhand, better cost efficiency, phased and
planned expansion into other forms of media businesses, and a wider portfolio (including Mid-Day). 9MFY11
business growth (20% ad growth) strengthens our belief that it is well poised to benefit from steady growth
in the print media sector.
What will move the stock?
1) Robust ad growth of 18% CAGR FY10-FY12E coupled with margin enhancement would drive overall
growth for the company; 2) Broad based growth across various other business verticals; 3) Blackstone
investment to support its inorganic growth.
Where are we stacked versus consensus?
Our revenue estimates vary from consensus by ~3%, mainly account of incorporation of Mid-Day numbers
in FY12. Our Net margin forecast for FY12 which is 19% is in line with consensus. Our FY12 EPS estimate
is 3% lower than the consensus.
What will challenge our target price?
1) Increase in newsprint prices; 2) Slow down in economic activity; 3) Increased competition in current
markets where JPL is present.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JAGRAN PRAKASHAN (JPL): BUY, TP-Rs165 (39% upside)
What’s the theme?
We like JPL for its its leadership position in UP (the largest print market in terms of readership and print ad
value), strong position in growing regions like Bihar and Jharkhand, better cost efficiency, phased and
planned expansion into other forms of media businesses, and a wider portfolio (including Mid-Day). 9MFY11
business growth (20% ad growth) strengthens our belief that it is well poised to benefit from steady growth
in the print media sector.
What will move the stock?
1) Robust ad growth of 18% CAGR FY10-FY12E coupled with margin enhancement would drive overall
growth for the company; 2) Broad based growth across various other business verticals; 3) Blackstone
investment to support its inorganic growth.
Where are we stacked versus consensus?
Our revenue estimates vary from consensus by ~3%, mainly account of incorporation of Mid-Day numbers
in FY12. Our Net margin forecast for FY12 which is 19% is in line with consensus. Our FY12 EPS estimate
is 3% lower than the consensus.
What will challenge our target price?
1) Increase in newsprint prices; 2) Slow down in economic activity; 3) Increased competition in current
markets where JPL is present.
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