MOSL: JAGRAN PRAKASHAN (Buy)-Better ad environment, softer newsprint prices to aid earnings
Jagran Prakashan: Better ad environment, softer newsprint prices to aid earnings
(JAGP IN, Mkt Cap USD0.5b, CMP INR115, TP INR138, 20% Upside, Buy)
- Turnaround in earnings: Bucking the downtrend of the past several quarters, JAGP bounced back with its 4QY19 earnings. Consol. EBITDA grew 15% YoY to INR1.4b (2% beat) with 130bp margin expansion to 23.3%. This was led by twin benefits of (a) healthy 8% YoY growth in consol. revenue to INR5.9b (in-line), and (b) moderating pace of RM cost increase – up 12% YoY (Down 7% QoQ). Subsequently, PAT at INR665m, grew 13% YoY (11% miss) led by EBITDA growth, partly offset by high finance cost/taxes. For FY19, revenue grew 3% while EBITDA/PAT declined 8%/13% YoY.
- Concall highlights: (1) Management mentioned that print ad growth at 8% and correction in newsprint prices should drive 20% EBITDA growth. (2) Expect 10-15% savings in RM cost in FY20. (3) If required, Jagran may temporarily give loans to MBL in the form of interest bearing ICDs for RBNL acquisition.
Jagran Prakashan Limited is a media and communications company with interests in print, digital, radio, out-of-home (OOH) and activation. The Company is engaged in the business of printing and publication of newspapers and periodicals, business of radio broadcast and all other related activities through its radio channels operating under brand name Radio City 91.1 frequency modulation (FM) in India. It is also engaged in the business of providing event management services and outdoor activities. The Company publishes approximately 12 print titles in over five different languages spread across 15 states with over 100 editions. The Company's print media brands include Dainik Jagran, inext, mid-day, Nai Dunia, mid-day Gujarati, Inquilab, Sakhi, Punjabi Jagran and Jagran Josh. The Company's digital media brands include Jagran New Media, Jagran.com, Jagranjosh.com, Jagran Post, Jagran Junction and Jeetle. The Company's social initiative brand include Jagran Pehel.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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