jagran prakashan coverage by ventura securities
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Jagran Prakashan – About the company
Nai Dunia
Print, FY14 ` 1320.8 crore
RS: 90% share
Hindi Other
Highest read daily
publication in India, FY14 R: 1258 crore, RS: 74% overall, 82%
of print revenues
Dainik Jagran
FY14 R: 137 crore, RS:
8% overall, 9% of print revenues
7th most read daily English
publication in India, FY14 R: 117 crore, RS: 7% overall, 7.6% of print revenues
Others: Mid-Day, Punjabi
Jagran, Midday Gujarati, I-Next, Inquilab, City Plus, Jagran Josh Plus, Sakhi,
Khet Khaliyan, FY14 R: 67 crore, RS: 4% overall,
4.4% of print revenues
Digital and other business,
FY14 ` 120 crore, RS: 7.1%
share
Digital: 8.6 mn unique users ,
Online Assets: jagran.com, jagranjosh.com, FY14 R: ~` 20 crore
OOH (Out of Home Advertising):
Leading Outdoor Operator
Activation (Jagran Solutions):
Pan India Operation , Activation activities undertaken for private
companies
Enjoys leadership position in the large, high growth markets
•JPL derives ~75% of revenues through Dainik Jagran, of which advertising revenues accounted for 76%
of revenues in FY14, with circulation revenues accounting for the rest.
•According to the Indian Readership Survey, 2013 (IRS), Dainik Jagran is the highest read publication in
India with a weekly readership of 15.5 mn followed by Hindustan having a weekly readership of 14.2 mn.
Publication Language Readership ( in mn)
Dainik Jagran Hindi 15.5
Hindustan Hindi 14.2
Dainik Bhaskar Hindi 12.9
Malayala Manorama Malayalam 8.6
Daily Thanthi Tamil 8.2
Rajasthan Patrika Hindi 7.7
The Times Of India English 7.3
Amar Ujala Hindi 7.1
Mathrubhumi Malayalam 6.1
Lokmat Marathi 5.6
Source: IRS 2013
0.0
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Dainik Bhaskar
The Tribune
Hindustan Times
Amar Ujala Dainik Jagran
2010 2011 2012
0.0
0.5
1.0
1.5
2.0
2.5
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3.5
4.0
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Dainik Bhaskar
Hari Bhoomi
Nava Bharat
Nai Dunia Dainik Jagran
2010 2011 2012
0.0
1.0
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Hindustan Times
The Times Of India
Navbharat Times
Hindustan Dainik Jagran
2010 2011 2012
0.0
1.0
2.0
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4.0
5.0
6.0
Dainik Bhaskar
Dainik JagranPunjab KesariHari Bhoomi
2010 2011 2012
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0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Amar Ujala Punjab Kesari
Divya Himachal
The Tribune
Dainik Jagran
2010 2011 2012
0.0
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Daily Excelsior
Amar Ujala Punjab KesariDainik Jagran
2010 2011 2012
0.0
1.0
2.0
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4.0
5.0
6.0
7.0
8.0
Hindustan Prabhat Khabar
Dainik Jagran Dainik Bhaskar
2010 2011 20120.0
2.0
4.0
6.0
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10.0
12.0
14.0
16.0
18.0
Dainik Bhaskar
Group
Patrika Nai Dunia Dainik Jagran
2010 2011 2012
0.0
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Ajit Punjab Kesari
Jag Bani Dainik Bhaskar
Dainik Jagran
2010 2011 2012
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Dainik Jagran
Amar Ujala Hindustan Aj
2010 2011 2012
0.0
0.5
1.0
1.5
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Amar Ujala Dainik Jagran Hindustan The Times Of India
2010 2011 2012
0.0
5.0
10.0
15.0
20.0
25.0
Hindustan Dainik Jagran
Prabhat Khabar
Aj
2010 2011 2012
HP J&K
Uttaranchal
Bihar
Jharkhand
ChhattisgarhMP
Haryana
ChandigarhUP
Delhi
Punjab
Regional newspapers to grow at a faster pace
• With the advent of the internet age, newspaper readership growth in metro cities has
stagnated in the past few years.
•Regional newspapers have a lot of room to grow given that they are still largely under-
penetrated. Further, while internet connections are rapidly increasing pan-India, the quality
of the connectivity in the non-metro cities plays a major hindrance for consumers to surf
news online.
33269 28317
88783
122660
43384 43864
0
20000
40000
60000
80000
100000
120000
140000
Uttar Pradesh
Bihar Punjab Haryana Jharkhand Madhya Pradesh
in Rs
2012-13
Per capita income of JPL’s key markets
17%
10%
8%
10%
5% 5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
UP and Uttarakhand Bihar and Jharkhand MP & Chattisgarh
% of total Population % of internet subscriber base
Internet penetration low in the Hindi Belt
Source: JPL, Ventura Research
JPL’s print revenues to grow at a steady rate
• JPL’s print media division has consistently grown with expansion in new markets, launch of
new editions and acquisition of publications viz. Mid-Day in 2010 and Nai Duniya in 2012.
•Its print media revenues have grown at a 3 year CAGR of 12.2% as compared to the industry
average of 8% (Source: FICCI, KPMG 2014 Report).
• We expect print media revenues to grow at a steady 3 year CAGR of 10% to Rs 2049 crore
by FY17. The growth drivers will be yield and volume improvement led by pick-up in economy
and consequently higher corporate spending on advertisements.
0%
2%
4%
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8%
10%
12%
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16%
0
500
1,000
1,500
2,000
2,500
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
Revenues ( in Rs crs) Revenue growth (RHS)
in Rs crs
Expected 3
year CAGR
FY17E
Revenues
%
contribution
Dainik Jagran 9.6% 1656 81%
Mid-Day 4.4% 133 6%
Nai Dunia 10.2% 183 9%
Others 4.3% 76 4%
Total 12.2% 2049
Outdoor and Activation business: Shift in Strategy
• Outdoor and Activation business includes JPL’s digital, OOH and Activation segments.
•JPL’s main digital assets: jagran.com and jagranjosh.com clock 168 mn page views per
month. At Rs 17-18 crs of revenue, the company currently earns revenues Rs 21 per user,
expect 30-40% CAGR in this segment
• JPL is focusing on more private sector contracts in its outdoor and activation segments
instead of public/government contracts that it undertook in the past. Stuck receivables an
issue in public contracts. Winding down government contracts will result in revenue loss in the
next two years.
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80.00
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120.00
140.00
FY13 FY14 FY15E FY16E FY17E
Revenues ( in Rs crs)
We expect this segment
to clock revenues of Rs
94 crore in FY17
0%
2%
4%
6%
8%
10%
12%
14%
0
500
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2000
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FY11 FY12 FY13 FY14 FY15E FY16E FY17E
Revenues ( in Rs crs) Revenue growth (RHS)
Jagran Prakashan – Financial Performance
Revenues to grow at 3 yr CAGR of 8% to Rs
2142 crores by FY17
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USD per tonne
Newsprint prices on a declining trend…
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
FY11 FY12 FY13 FY14 FY15EFY16EFY17E
Overall Dainik Jagran Mid-Day
Nai Dunia Others
…hence overall EBITDA margin to expand
to 25.7% in FY17
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FY11 FY12 FY13 FY14 FY15E FY16E FY17E
PAT margin RoE D/E (RHS)
PAT margin, ROE to improve; D/E on a decline
Radio City Acquisition by Jagran Prakashan
• Jagran Prakashan, in 2014, acquired 100% stake in Music Broadcasters Pvt. Ltd, which runs
the Radio City FM station for an enterprise value of ~Rs 410 crores (excluding Rs 200 crores
of Migration fee expected for renewal of Phase II licenses)
• Radio City has 20 stations, with 7 in the top metro cities wherein it enjoys a high listenership.
Mumbai Share % T.S.L Tarp%
Radio City 19.0 5.52 1.4
Big FM 17.5 6.03 1.3
Radio Mirchi 13.8 4.22 1.0
Fever FM 12.5 6.14 0.9
Red FM 12.1 4.11 0.9
Oye 3.2 3.12 0.2
Radio One 3.1 2.26 0.2
Delhi Share % T.S.L Tarp%
Fever FM 19.5 5.15 1.4
Radio City 13.0 3.54 1
Big FM 12.7 3.41 0.9
Radio Mirchi 12.6 3.27 0.9
Red FM 9.7 2.55 0.7
Oye 5.3 2.55 0.4
Radio One 2.6 1.34 0.2
Kolkatta Share % T.S.L Tarp%
Radio Mirchi 20.9 4.3 1.7
Big FM 17.2 5.2 1.4
Oye 10.2 3.4 0.8
Radio One 10.1 3.38 0.8
Red FM 8.4 2.56 0.7
Fever FM 7.2 3.05 0.6
Bengaluru Share % T.S.L Tarp%
Radio City 24.2 9.48 2.7
Big FM 21.0 8.09 2.4
Radio Mirchi 17.9 7.27 2
Fever FM 10.6 6.51 1.2
Red FM 6.6 4.2 0.8
Radio One 3.4 3.01 0.4
RAM ratings for Week 47 (All 25 years +, 16Nov to 22Nov, Mon-Sun 12AM-12AM)T.S.L = Time Spent Listening, Tarp%= Target Audience Rating Points are also known as ratings and are an estimate of the size of a specific
viewing audience to a channel, programme or timezone. 1 TARP is the equivalent of reaching 1% of the target audience.
MBPL Key Financials
In Rs crores FY12 FY13 FY14
Revenue 124 140 154
EBITDA 26 34 42
EBITDA margin 21% 24% 27%
PAT 5 12 24.8
PAT margin 3.8% 8.8% 16.1%
• Expect the company to incur Rs 200 crore on migration of Phase II licenses to Phase III
•Incur another Rs 50-60 crores for the acquisition of 7-8 stations in cities where JPL has a
strong print presence
• Utilisations: Top 7 stations 95%, Remaining 13 stations: 60%, Effective Rate: Rs 5000 for
20 stations
•We expect Revenues to grow at a 10 year CAGR of 9% to Rs 480.3 crore by FY17
•We expect EBITDA margin to moderate to 26.7% over a 10 year period from the current
32%
• RoE to stabilise to 14-15% over a 10 year period
In Rs crores FY12 FY13 FY14
Networth -27.5 -14.4 10.3
Debt 139.3 118.0 103.2
Current Liabilities 67.9 63.9 52.6
Tangible Assets 11.09 6.17 7.72
Intangible Assets 48.0 36.0 23.9
Current Assets 83.2 92.0 107.5
JPL & MBPL Valuation
JPL
FY17 EPS 9.6
Target PE multiple 15x
Target price 144
MBPL
Risk free rate 9%
Risk Premium 9%
Beta 0.73 ( Same as ENIL)
Terminal Growth Rate 3%
WACC 15.57%
Projection Years FY15-FY25
DCF based share price 148
Company Target Price per share
JPL 144
MBPL 148
Total 292
Less: Paid by JPL to acquire MBPL
99
Total Target for JPL ( including MBPL)
193
CMP 130
Upside 48%
Ventura Securities Limited
Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079
This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be
reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in
the securities mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the
above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation.
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