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Jagran Prakashan -Robust ad growth, in line with expectation…
Jagran Prakashan’s Q3FY11 results were in line with our expectation.
The company reported a topline of | 286.0 crore against our
expectation of | 281.5 crore, registering a growth of 26.1% YoY, aided
by 31.3% YoY growth in advertisement revenue. EBITDA increased to
| 89.7 crore in Q3FY11 improving 37.5% YoY. The EBITDA margin
improved 261 bps YoY to 31.4% while it contracted by 143 bps QoQ
due to higher newsprint consumption led by increased circulation in
Jharkhand. PAT for the quarter stood at | 52.6 crore against our
expectation of | 54.4 crore.
ƒ Highlights for quarter
During the quarter, the company reported ad revenue growth of
31.2% YoY (in line with peers) to | 194.5 crore from | 148.2 crore in
Q3FY10. Circulation revenues stood at | 57.0 crore vs. | 53.2 crore
in Q3FY10, growing 7.2% YoY while the number of copies circulated
increased ~10.1%. Value growth in circulation was lower as the
company took cover price reduction in some markets owing to
intense competition.
Other business segments of the company exhibited remarkable
performance. Event and outdoor revenues grew 19.7% to | 25.2
crore from | 21.1 crore in Q3FY10. Also, the OOH business turned
EBITDA positive in this quarter with a PBT of | 1.0 crore.
Valuation
The company has reported robust ad revenue growth in the current
quarter backed by strong festive demand. We expect the company to
post ad revenue growth of 19.3% and 16.0% in FY11E and FY12E,
respectively. The margins would remain under pressure with
intensifying competition (Hindustan consolidating its position in UP and
DB Corp entering Bihar). At the CMP of | 122, Jagran Prakashan is
trading at 18.1x FY11E EPS of | 6.8 and 15.5x FY12E EPS of | 7.9. We
have valued the stock at 18x FY12 EPS to arrive at a target price of |
142. This implies an upside of 16%. We rate the stock as BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jagran Prakashan -Robust ad growth, in line with expectation…
Jagran Prakashan’s Q3FY11 results were in line with our expectation.
The company reported a topline of | 286.0 crore against our
expectation of | 281.5 crore, registering a growth of 26.1% YoY, aided
by 31.3% YoY growth in advertisement revenue. EBITDA increased to
| 89.7 crore in Q3FY11 improving 37.5% YoY. The EBITDA margin
improved 261 bps YoY to 31.4% while it contracted by 143 bps QoQ
due to higher newsprint consumption led by increased circulation in
Jharkhand. PAT for the quarter stood at | 52.6 crore against our
expectation of | 54.4 crore.
ƒ Highlights for quarter
During the quarter, the company reported ad revenue growth of
31.2% YoY (in line with peers) to | 194.5 crore from | 148.2 crore in
Q3FY10. Circulation revenues stood at | 57.0 crore vs. | 53.2 crore
in Q3FY10, growing 7.2% YoY while the number of copies circulated
increased ~10.1%. Value growth in circulation was lower as the
company took cover price reduction in some markets owing to
intense competition.
Other business segments of the company exhibited remarkable
performance. Event and outdoor revenues grew 19.7% to | 25.2
crore from | 21.1 crore in Q3FY10. Also, the OOH business turned
EBITDA positive in this quarter with a PBT of | 1.0 crore.
Valuation
The company has reported robust ad revenue growth in the current
quarter backed by strong festive demand. We expect the company to
post ad revenue growth of 19.3% and 16.0% in FY11E and FY12E,
respectively. The margins would remain under pressure with
intensifying competition (Hindustan consolidating its position in UP and
DB Corp entering Bihar). At the CMP of | 122, Jagran Prakashan is
trading at 18.1x FY11E EPS of | 6.8 and 15.5x FY12E EPS of | 7.9. We
have valued the stock at 18x FY12 EPS to arrive at a target price of |
142. This implies an upside of 16%. We rate the stock as BUY.
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