MOSL: JAGRAN PRAKASHAN (Buy)-Print business hurts performance-Radio business to drive earnings
Jagran Prakashan: Print business hurts performance; Radio business to drive earnings
(JAGP IN, Mkt Cap USD0.9b, CMP INR165, TP INR215, 30% Upside, Buy)
- Dismal quarter: revenue fell 3% YoY (-8% QoQ) to INR5.5b (5% miss) due to a weak performance in the print business, partly offset by growth in the radio business. This, coupled with a 2% YoY rise in opex, led to a 16% YoY (-26% QoQ) decline in consol. EBITDA to INR1.2b (9% miss). Margin contracted 370bp YoY to 22% (~90bp miss). PAT declined 27% YoY (-30% QoQ) to INR590m (19% miss), mainly due to the EBITDA decline, partly cushioned by interest cost savings. For FY18, revenue grew 1% YoY to INR23b (1% miss), EBITDA declined 9% YoY to INR5.9b (2% miss) and PAT fell 14% YoY to INR3.1b (4% miss).
- Lower print ad revenue dampens overall growth: Print ad revenue fell 6% YoY to INR3.1b, likely because of a high base (UP elections in 4QFY17). Circulation revenue fell 3% YoY to INR1.1b. Dainik Jagran's revenue/EBITDA declined 6%/21% YoY. However, the impressive radio business performance (revenue up 14% YoY, EBITDA up 65% YoY) restricted the decline in consol. revenue/EBITDA.
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.
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