2. INDUSTRY & COMPANY
•The Indian M&E Industry grew from INR728 B in
2011 to INR 820 billion in 2012, registering an overall
growth of 12.6%.
•The sector is projected to grow at a healthy CAGR of
15.2% to reach INR1661 B by 2017- FICCI - KPMG
•Regional media continues to grow on a strong
growth trajectory, especially in the print and
television sector.
•The out of house advertising sector has also seen
higher rates of growth in transit advertising.
•There is hence an increasing need to provide 360
degree solutions to advertisers and provide multiple
platform to reach out to consumers, wherever they
are.
About 90 per cent of print readers
in India consume content in
Hindi and Regional languages.
2
3. BUSINESS
•Jagran Prakashan Ltd (JPL) is India’s leading media and communications group, with its main interests across
Newspapers, Outdoor, Internet, Magazines, Below the Line marketing solutions, and Mobile Value Added Services. covers
all of India as its footprint – and is amongst one of the largest media conglomerates in the country.
•Jagran Prakashan, publisher of the leading Hindi newspaper Dainik Jagran, has embarked on a strategy to leverage its
dominant position in the newspaper market in northern India to have a holistic business model encompassing all major
media avenues.
SOURCE OF VALUE CREATION:
•Play on growth in print media
•King of Hindi heartland
•Holistic business model encompassing major
media avenues
DRIVERS:
•Demand in regional print media increasing
•making it the preferred medium for advertisers
COMPETITION:
•Dainik Jagran : King of Hindi heartland
•Readership greater than top 3 English dailies
•Advertisers’ focus shifting from metros to nonmetros
•Creating a new stronghold in Punjab
•Flanking strategy to maintain leadership
•De-risking business
Out-of-Home (OOH): Future growth
avenue
Event Management business
SMS and Internet
New regional financial newspaper
3
4. English dailies tend to be
hit
harder
in
a
slowdown,
in
part
because they thrive in the
metros.
RISKS & CONCERNS
Raw material cost
Intense competition
Performance of new brands
Economic slowdown
OOH business
Event Management
4
5. MANAGEMENT
Dainik Jagran has a very strong and experienced management led by Mr MM Gupta who is well respected in the industry. All the
business are led by people with strong experience in their respective domains.
M M Gupta :Current Chairman & Managing Director. Has held various key positions in the industry – Chairman of United
News of India; President of Indian Languages Newspaper Association, Council Member of Audit Bureau of Circulation, Member
of Press Council of India, etc.
Mr Sanjay Gupta
CEO and Editor
Mr Kishore
Biyani
Independent
Director
Sir. A. O’Reilly
Non-Executive
Director
Mr.Sanjay has over 23 yrs of experience in print media and is responsible for
operations in the north. He is also Director of IIM Lucknow and Motilal Nehru
Institute of Technology, Allahabad.
Mr. Biyani is MD of Pantaloon Retail (India) Ltd. His contributions to the retail
industry have been recognized with several awards
Sir Anthony was the Chairman and President of HJ Heinz Company and a member
of the board of the NYSE. He has been a director of Independent News & Media
PLC since 1973. Sir Anthony joined the Board on July 25, 2005 as a nominee of
INMIL.
5
8. PEER GROUP ANALYSIS
Jagran
Deccan
Zee
Sun TV
Prakashan DB Corp Chronicle HT Media Entertain Network
Mar '12
Mar '13
Sep '12
Mar '12
Mar '13
Mar '13
Dish TV
Mar '13
P
86.50
312.00
3.79
72.60
265.00
350.80
47.15
P/E
15.23
24.80
(0.08)
10.68
39.43
20.23
(76.05)
P/B
3.64
5.33
7.90
3.63
7.54
4.78
(32.29)
Market cap
2,889.29
Net Debt
311.86
137.39
876.02
876.02
876.02
876.02
876.02
cash
49.27
116.06
111.94
111.94
111.94
111.94
111.94
EV
3,151.88
EV/EBITDA
9.33
KEY INVESTMENT ARGUMENT
•Strong presence in tier II/III towns
across the Hindi
•Speaking belt with leadership position
in UP which is the largest Hindi print
market
•Footprint expansion led by Mid-Day
and 'Nai Duniya’ acquistions
•High dividend pay-out
5,650.57 5,053.68
5,671.90 5,817.76
13.87
(18.87)
5,053.68 5,053.68
5,817.76 5,817.76
24.37
5.93
5,053.68
5,817.76
4.17
5,053.68
5,817.76
8.43
DM14229_K.Keer
thi.xlsx
8
9. VALUATION & PRICE
Industry average
Valuation
P/E
17.73
EPS
5.68
100.73 /-
P/B
4.34
BV
23.76
103.20 /-
EV/EBITDA
12.93
EBITDA
337.98
4,371.20 Cr
RECOMMENDATION
•Jagran Prakashan’s (Jagran) Q1FY14 operating
performance was ahead of estimates, on account of
higher‐than‐expected advertising revenue growth and
robust circulation revenue growth.
•Improvement in advertising revenues and upcoming
elections provide better‐than‐earlier revenue growth
visibility
BUY
9
