MOSL: JAGRAN PRAKASHAN (Buy)-Subdued print ad revenue stalls growth, but revival in sight
Jagran Prakashan: Subdued print ad revenue stalls growth, but revival in sight
(JAGP IN, Mkt Cap USD0.9b, CMP INR175, TP INR215, 23% Upside, Buy)
- EBITDA hurt by higher operating cost: revenue came in flat YoY at INR5.98b (2% beat), as a drop in print ad revenue was offset by growth in other segments. Consol. EBITDA declined 13% YoY to INR1.6b (5% beat) due to a 9% YoY rise in SGA expenses, with the margin contracting 380bp YoY to 27.2% (~70bp beat). The impact, however, was partly mitigated by a 15% YoY decline in interest cost and a 38% YoY rise in other income. PAT fell 13% YoY (+22% QoQ) to INR848m (5% miss).
- Muted print ad revenue stalls growth: Print ad revenue declined 3.5% YoY to INR3.6b, due to 1) split of the festive season between 2QFY18 and 3QFY18, 2) lingering impact of GST and 3) high base of 3QFY17 (led by state elections). Circulation revenue was largely flat YoY at INR1.1b. However, a 5%/10% YoY increase in radio and other segments (including digital) provided support to overall revenue. On the business front, Dainik Jagran continued its downtrend, with a 2%/13% YoY decline in revenue/EBITDA; other publications reported a sharp drop of 35% YoY in 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.
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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