Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Following a tepid 1Q, JAGP reported disappointing 2Q results. Management
cut its FY12 ad growth guidance to 12% (vs. 15% earlier) and expects
newsprint costs to stabilize (or come down) going forward. Maintain Neutral
with a revised price target of Rs125.
Weak ad growth, guidance cut further: JAGP ad revenues continued its
weak trend with 2Q revenue growth at 9.5% YoY vs. 1Q at 7.7% YoY.
However, unlike 1Q, 2Q ad growth was driven mostly by volumes.
Managment cut its FY12 ad revenue growth target to 12% from 14%-15%
guidance earlier. Despite muted 1H ad growth, management appears
confident of achieving 2H ad growth rate of ~15% driven by UP state
elections in 4Q. Management also indicated that recently launched Punjabi
Jagran should benefit from Punjab state elections in 4Q.
Rising newsprint prices and increasing circulation driving up costs:
JAGP’s 2Q newsprint costs increased 34.2% YoY, of which 18.5% was on
account of higher prices and remainder due to increased circulation
(including launches of Punjabi Jagran and Inquilab). Management
indicated that the impact of high newsprint costs should abate going forward
due to the high base effect. Further, management noted that most of its
major expansion has been completed and it expects the pace of new
launches to decline going forward.
2Q FY12 result highlights: Revenues increased 10% driven by circulation
revenues (+12% YoY), ad revenues (+10% YoY) and event & outdoor
revenues (+9% YoY). EBITDA margin declined 700bp YoY primarily on
account of higher raw material costs (+650bp YoY). Net profit declined 18%
YoY on MTM FX losses. Excluding the FX impact, net profit rose 3% YoY.
Remain N: With HTML expanding in UP and Uttarkhand, we expect JAGP
to continue to face headwinds in these states. We reduce our FY12/FY13
estimates by 12%/10% assuming higher newsprint costs. As a result of these
changes and rolling forward our timeframe to Sep-12, our PT falls to Rs125
(from Rs135), based on 18x Sep-13E P/E. Key downside/upside risks
include rising competitive intensity, failure to scale up in new markets, an
increase/decrease in newsprint costs, and an economic growth slowdown.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Following a tepid 1Q, JAGP reported disappointing 2Q results. Management
cut its FY12 ad growth guidance to 12% (vs. 15% earlier) and expects
newsprint costs to stabilize (or come down) going forward. Maintain Neutral
with a revised price target of Rs125.
Weak ad growth, guidance cut further: JAGP ad revenues continued its
weak trend with 2Q revenue growth at 9.5% YoY vs. 1Q at 7.7% YoY.
However, unlike 1Q, 2Q ad growth was driven mostly by volumes.
Managment cut its FY12 ad revenue growth target to 12% from 14%-15%
guidance earlier. Despite muted 1H ad growth, management appears
confident of achieving 2H ad growth rate of ~15% driven by UP state
elections in 4Q. Management also indicated that recently launched Punjabi
Jagran should benefit from Punjab state elections in 4Q.
Rising newsprint prices and increasing circulation driving up costs:
JAGP’s 2Q newsprint costs increased 34.2% YoY, of which 18.5% was on
account of higher prices and remainder due to increased circulation
(including launches of Punjabi Jagran and Inquilab). Management
indicated that the impact of high newsprint costs should abate going forward
due to the high base effect. Further, management noted that most of its
major expansion has been completed and it expects the pace of new
launches to decline going forward.
2Q FY12 result highlights: Revenues increased 10% driven by circulation
revenues (+12% YoY), ad revenues (+10% YoY) and event & outdoor
revenues (+9% YoY). EBITDA margin declined 700bp YoY primarily on
account of higher raw material costs (+650bp YoY). Net profit declined 18%
YoY on MTM FX losses. Excluding the FX impact, net profit rose 3% YoY.
Remain N: With HTML expanding in UP and Uttarkhand, we expect JAGP
to continue to face headwinds in these states. We reduce our FY12/FY13
estimates by 12%/10% assuming higher newsprint costs. As a result of these
changes and rolling forward our timeframe to Sep-12, our PT falls to Rs125
(from Rs135), based on 18x Sep-13E P/E. Key downside/upside risks
include rising competitive intensity, failure to scale up in new markets, an
increase/decrease in newsprint costs, and an economic growth slowdown.
No comments:
Post a Comment