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Jagran Prakashan 1QFY2015 performance highlights and results update

August 4, 2014, Monday, 13:42 GMT | 08:42 EST | 17:12 IST | 19:42 SGT
Contributed by Angel Broking

Jagran Prakashan (JPL) reported a subdued set of results for 1QFY2015, both on the top-line and bottom-line front. The top-line growth was slightly lower, mainly due to lower growth in advertising revenue. The company’s performance was subdued on the profitability front as well, owing to a slightly lower operating performance and a higher tax rate (up 952bp). We maintain our Buy rating on the stock.

Ad revenue up 7.3% yoy & circulation revenue up 12.8% yoy: The company’s advertising revenue growth for the quarter was subdued at 7.3% yoy to Rs.288cr, primarily driven by increase in yields. Circulation revenue was up by 12.8% yoy to Rs.90cr due to a combination of increase in cover price and volume growth. Consequently, the standalone top-line grew by 7.5% yoy to Rs.414cr.

Subdued operating performance: The standalone EBITDA grew by 4.5% yoy to Rs.106cr and the OPM contracted by 73bp yoy to 25.6% owing to higher news print cost. The net profit de-grew by 5.6% yoy to Rs.56cr due to higher tax rate (up 952bp). Outlook and valuation: Considering Dainik Jagran’s status as the most read Hindi newspaper and its strong presence in the rapidly growing Hindi markets of Bihar, Haryana, Jharkhand, Punjab, Madhya Pradesh and Uttar Pradesh, we expect JPL to benefit most from an eventual recovery in the Indian economy. Hence, we maintain our Buy rating on the stock with a target price of Rs.154.