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NEWSPAPER PUBLISHERS - IRS 2011 Q3 RESULTS
We provide a summary of IRS 2011 Q3 results, and reiterate our BUY
recommendation on the three newspaper publishers under our coverage
universe (DB Corp., HT Media, and Jagran Prakashan). The competitive
position of players under our coverage universe is in line with expectations.
We hold the view that newspaper publishers shall continue to see ~10%
advertising revenue growth in the coming quarters, in line with street
expectations. While newsprint prices continue to be a threat to our
estimates, we believe that recent declines in stock prices factor in the same
to a large extent. HT Media continues to be our top long-term pick, while
Jagran is likely to benefit in the short-term from state assembly elections
(Jan/ Feb -2012).
IRS data shows, to a large extent, maintenance/ improvement in readership for all
companies under our coverage universe. DB Corp has added 5% (q/q) to its readership, registering the strongest readership additions in our coverage universe, due to
addition of the Jharkhand editions of DB Corp in the survey for the first time.
For all companies under our coverage universe, readership share in key markets remains largely unchanged: 1/ HT Media continues to lead the market in Delhi, Bihar,
and Jharkhand, 2/ DB Corp continues to dominate the markets in MP/ Chhattisgarh,
and maintain strong positions in markets such as Punjab, Haryana, Chandigar,
Rajasthan and Gujarat (Gujarati daily Divya Bhaskar), 3/ Jagran Prakashan continues
to lead by a large margin in Uttar Pradesh.
New entrants continue to be a long-term challenge for the incumbents: 1/DB Corp
has made a formidable entry in Jharkhand, 2/ Patrika continues to perform strongly
in DB Corp stronghold of MP, 3/ Hindustan Times continues to make inroads in the
Mumbai territory, 4/ Mint continues to gain readers in the business newspapers'
space.
Even as there are signs of slowdown in consumption, newspaper publishers have
continued to register reasonable growth in advertising revenues. We believe the
trend shall be maintained, and expect ~10% (y/y) advertising growth in our coverage universe in the next 3-4 quarters. We note that assembly elections in five states
(UP, Uttarakhand, Punjab, Goa, and Manipur) shall aid advertising revenue growth
among newspapers, especially newspapers exposed to Uttar Pradesh.
Newsprint prices, in the light of continued depreciation in the rupee, are the key
threat to newspaper publishers' near-term/ long-term earnings estimates. Although
the immediate threat is higher to English newspapers, domestic newsprint prices
may feel the pressure from substitution pressures as well, over the medium term.
However, we think that valuations of newspaper publishers are reasonable at 12.5x-
14.5x PER FY12E, and incorporate, to a significant extent, the same risks.
We have a BUY rating on all print media stocks under our coverage (DB Corp. HT
Media, and jagran Prakashan), with a preference for HT Media over the long-term,
on account of the company's rising clout in certain heavily invested, and yetunmonetized editions/ newspapers (Mumbai, business newspapers). We believe
Jagran Prakashan is likely to perform strongly in the near-term, given cheap valuations and high exposure to states where assembly elections are scheduled in Jan/
Feb 2012.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NEWSPAPER PUBLISHERS - IRS 2011 Q3 RESULTS
We provide a summary of IRS 2011 Q3 results, and reiterate our BUY
recommendation on the three newspaper publishers under our coverage
universe (DB Corp., HT Media, and Jagran Prakashan). The competitive
position of players under our coverage universe is in line with expectations.
We hold the view that newspaper publishers shall continue to see ~10%
advertising revenue growth in the coming quarters, in line with street
expectations. While newsprint prices continue to be a threat to our
estimates, we believe that recent declines in stock prices factor in the same
to a large extent. HT Media continues to be our top long-term pick, while
Jagran is likely to benefit in the short-term from state assembly elections
(Jan/ Feb -2012).
IRS data shows, to a large extent, maintenance/ improvement in readership for all
companies under our coverage universe. DB Corp has added 5% (q/q) to its readership, registering the strongest readership additions in our coverage universe, due to
addition of the Jharkhand editions of DB Corp in the survey for the first time.
For all companies under our coverage universe, readership share in key markets remains largely unchanged: 1/ HT Media continues to lead the market in Delhi, Bihar,
and Jharkhand, 2/ DB Corp continues to dominate the markets in MP/ Chhattisgarh,
and maintain strong positions in markets such as Punjab, Haryana, Chandigar,
Rajasthan and Gujarat (Gujarati daily Divya Bhaskar), 3/ Jagran Prakashan continues
to lead by a large margin in Uttar Pradesh.
New entrants continue to be a long-term challenge for the incumbents: 1/DB Corp
has made a formidable entry in Jharkhand, 2/ Patrika continues to perform strongly
in DB Corp stronghold of MP, 3/ Hindustan Times continues to make inroads in the
Mumbai territory, 4/ Mint continues to gain readers in the business newspapers'
space.
Even as there are signs of slowdown in consumption, newspaper publishers have
continued to register reasonable growth in advertising revenues. We believe the
trend shall be maintained, and expect ~10% (y/y) advertising growth in our coverage universe in the next 3-4 quarters. We note that assembly elections in five states
(UP, Uttarakhand, Punjab, Goa, and Manipur) shall aid advertising revenue growth
among newspapers, especially newspapers exposed to Uttar Pradesh.
Newsprint prices, in the light of continued depreciation in the rupee, are the key
threat to newspaper publishers' near-term/ long-term earnings estimates. Although
the immediate threat is higher to English newspapers, domestic newsprint prices
may feel the pressure from substitution pressures as well, over the medium term.
However, we think that valuations of newspaper publishers are reasonable at 12.5x-
14.5x PER FY12E, and incorporate, to a significant extent, the same risks.
We have a BUY rating on all print media stocks under our coverage (DB Corp. HT
Media, and jagran Prakashan), with a preference for HT Media over the long-term,
on account of the company's rising clout in certain heavily invested, and yetunmonetized editions/ newspapers (Mumbai, business newspapers). We believe
Jagran Prakashan is likely to perform strongly in the near-term, given cheap valuations and high exposure to states where assembly elections are scheduled in Jan/
Feb 2012.
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