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What’s the theme?
We like JPL for its leadership in UP (the largest print market in terms of readership and print ad value).
The company's strong position in growing regions such as Bihar and Jharkhand, good cost efficiency,
phased and planned expansion into other media businesses, and wide portfolio (including Mid-day, I-next
and Cityplus) strengthen our belief that it is well poised to benefit from steady growth in the print media
sector. In FY11, JPL's revenue increased 18.5% to Rs 11.1bn and net profit increased 17% to Rs 2.1bn.
Improved ad yields and increased focus on color ads led to 20% ad revenue growth and 3.5% circulation
revenue growth (despite increased competition from Hindustan and Dainik Bhaskar).
What will move the stock?
1) Momentum in ad revenue underpinned by anticipated growth across sectors such as education and
financial services (we expect 17% CAGR over FY11-FY13E); 2) Broad-based growth across various other
business verticals (including event and outdoor businesses); 3) Attractive valuation: At CMP, the stock is
attractive, valued at 14xFY13E EPS.
Where are we stacked versus consensus?
Our revenue estimate for FY13 is 3% above consensus. However our EPS estimate of Rs8.3 for FY13 is
7.5% below consensus.
What will challenge our target price?
1) Increase in newsprint prices; 2) Slowdown in the economy; 3) Increased competition in current markets
where JPL has a presence.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
We like JPL for its leadership in UP (the largest print market in terms of readership and print ad value).
The company's strong position in growing regions such as Bihar and Jharkhand, good cost efficiency,
phased and planned expansion into other media businesses, and wide portfolio (including Mid-day, I-next
and Cityplus) strengthen our belief that it is well poised to benefit from steady growth in the print media
sector. In FY11, JPL's revenue increased 18.5% to Rs 11.1bn and net profit increased 17% to Rs 2.1bn.
Improved ad yields and increased focus on color ads led to 20% ad revenue growth and 3.5% circulation
revenue growth (despite increased competition from Hindustan and Dainik Bhaskar).
What will move the stock?
1) Momentum in ad revenue underpinned by anticipated growth across sectors such as education and
financial services (we expect 17% CAGR over FY11-FY13E); 2) Broad-based growth across various other
business verticals (including event and outdoor businesses); 3) Attractive valuation: At CMP, the stock is
attractive, valued at 14xFY13E EPS.
Where are we stacked versus consensus?
Our revenue estimate for FY13 is 3% above consensus. However our EPS estimate of Rs8.3 for FY13 is
7.5% below consensus.
What will challenge our target price?
1) Increase in newsprint prices; 2) Slowdown in the economy; 3) Increased competition in current markets
where JPL has a presence.
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