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MOSL: Morning India (9/March/18): 1. Jagran Prakashan: Revenue growth at the cusp of revival

MOrning India (9/March/18): 1. Jagran Prakashan: Revenue growth at the cusp of revival

• Today’s top research idea
  Jagran Prakashan: Revenue growth at the cusp of revival; Print business valued attractively at 11x FY19E EPS
  Ad revenue is likely to grow at a CAGR of 10% over FY18-20 (FICCI estimates vernacular print ad market growth of 8-9%), led by (a) revival in ad spends, (b) better monetization of IRS data, (c) favorable base, and (d) high ad spends in the run-up to the general elections.
  Increased circulation of Naidunia and other publications coupled with yield improvement should help garner 7% circulation revenue CAGR over FY18-20.
  MBL, the radio business, should post 16% revenue CAGR and 29% EBITDA CAGR over FY18-20, led by higher utilization and yield improvement.
  We expect 10% CAGR in consolidated revenue and 17% CAGR in consolidated EBITDA FY18-20, with the impact of GST/demonetization waning and a favorable base.
  Excluding MBL’s current value, JAGP is trading at an EV/EBITDA of 6x (FY19E), and at 11x FY19E EPS. We value JAGP at 14x December 2019E EPS (~10% discount to 3-year average), arriving at a TP of INR215.
• Piping hot news
  Direct tax collection surges to Rs7.44 trillion in Apr-Feb FY19
  Net direct tax collection in the April-February period of 2017-18 showed a robust 19.5% growth from the year-ago period to Rs7.44 trillion as a result of the government’s push to widen the tax base and boost revenue. The receipts so far this fiscal account for about three-fourths of the revised estimate of total direct tax collection for the full year of Rs10.05 trillion, said an official statement. The growth rate of gross direct tax receipts before adjusting for tax refunds is a tad lower at 14.5% on account of a change in the refund cycle. Gross collections so far this year stand at Rs8.83 trillion. The tax department has issued refunds of Rs1.39 trillion so far this year.