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Media
India
Demystifying IRS Q3 2010: HTML/HMVL gain, DBCL and JAGP steady. Our analysis
of IRS (Indian Readership Survey) Q3 2010 reveals (1) robust increase in readership of
Hindi dailies, (2) Hindustan Times (HT Media’s English daily) emerging as the new
runner-up newspaper in Mumbai, (3) strong gains for Hindustan (HT’s Hindi daily)
across key BJH (Bihar-Jharkhand) and UPU (Uttar Pradesh-Uttaranchal) markets, (4)
steady performance of DBCL across markets with strong gains in Gujarat and
(5) steady performance of JAGP in the key UPU market. Reiterate positive view on Hindi
print stocks given (1) rising readership and (2) consolidation potential.
Robust gains for HTML/HMVL in English (Mumbai) and Hindi (across markets) segments
The average issue readership (AIR) of English dailies increased 1% yoy (Q3 2010 over R2 2009) to
reach 17.1 mn (see Exhibit 1). HTML’s flagship English daily, Hindustan Times (HT), emerged as the
new runner-up English print brand in Mumbai overtaking DNA (see Exhibit 2). However, HT
remains far behind Times of India (TOI), the leading English daily in Mumbai, and thus, advertising
market share gains are likely to be back-ended; its ability to monetize its hard-fought runner-up
position in a market dominated by TOI is the key challenge as well as opportunity, in our view. HT
retained its leadership position in Delhi given the modest gap (<2%) between the two, it would be
fair to say that HT and TOI remain joint leaders in Delhi.
The AIR of Hindi dailies increased 6% yoy and 3% ror to reach 61.2 mn (see Exhibit 3) reflecting
the relatively robust print environment in Hindi markets. Including its Gujarati daily Divya Bhaskar,
DBCL led the regional market readership at 17.3 mn versus JAGP’s 16.6 mn (including youth
tabloid I-Next). Hindustan, HTML/HMVL’s flagship Hindi daily, witnessed a strong 16% yoy and
7% qoq increase in its AIR to reach 10.8 mn; it continued to gain share in key markets such as BJH
(post re-launch of Patna edition in March 2010) as well as UPU (see Exhibit 2). Not unlike HT
Mumbai, Hindustan remains under-monetized with significant advertising growth potential from
the fast-growing BJH as well as UPU markets, in our view.
Steady performance by DBCL with market share gains in strategic Gujarat market
DBCL’s flagship Hindi daily, Dainik Bhaskar (DB), witnessed a robust 5% yoy increase in its AIR to
reach 13.5 mn (17.3 mn including Divya Bhaskar; see Exhibit 3); Divya Bhaskar led the field in
Gujarat with robust 3% ror growth versus subdued performance from competition (see Exhibit 4).
Gujarat is a strategically important market for DBCL given the large gap between consumption
and advertising in the market and consequent growth potential; DBCL plans to launch new
editions in Gujarat to strengthen its position. DBCL itself faces competition in the home MPCG
(Madhya Pradesh-Chhattisgarh) market from Nai Dunia and from Patrika of the Rajasthan Patrika
group (29% ror growth in readership at 0.73 mn).
Steady performance by JAGP in UPU market but needs to improve in other markets
JAGP’s flagship Hindi daily, Dainik Jagran (DJ), witnessed a modest 1% yoy decline in its AIR to
reach 16.0 mn (16.6 mn including I-Next; see Exhibit 3). DJ’s performance improved in the core
UPU market after a period of relative weakness, which was positive (see Exhibit 5); JAGP continues
to report gains in key urban centers (see Exhibit 6) of UPU where competition from Hindustan as
well as Amar Ujala (AU) had been quite intense. However, JAGP needs to improve its performance
in other markets, where it has slipped versus competition. JAGP has clearly stated its position of
utilizing its strong balance sheet to consolidate its position versus relatively weaker competition in
key UPU as well as other markets.
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