Page 4 - 1700242_Value_Plus_March2017
P. 4



JAGRAN PRAKASHAN LTD.                                           launched in Kanpur. In 1953-56 it established its third
                                                                and fourth edition in Rewa and Bhopal. In coming
Accumulate                   Target Price Rs 213                years the company expanded its edition network.
 Value Parameters                                               Today, company operates through 37 editions from
 BSE Code                                   532705              Agra, Aligarh, Bareilly, Moradabad, Dehradun,
 NSE Symbol                             JAGRAN                  Haldwani, Dharamshala, Bhopal, Gorakhpur, Hisar,
 CMP (As on 01st Mar, 2017)                                     Jammu, Jhansi, Kanpur, Lucknow, New Delhi, Panipat,
 Face Value                                 Rs 186              Allahabad, Varanasi, Bhagalpur, Muzaffarpur, Patnar,
 52 Week High/Low                              Rs 2             Siliguri, Dhanbad, Jamshedpur, Ranchi and Meerut.
 Market Cap (Rs cr)                                             It has presence in 11 states namely Uttar Pradesh,
 EPS (Rs) (FY16)                      Rs 213/144                Uttarakhand, Punjab, Haryana, Bihar, Jharkhand,
 TTM PE ratio (x)                             6,165             Himachal Pradesh, Madhya Pradesh, Delhi, West
                                                10.0            Bengal and Jammu & Kashmir.
                                                                Investment Rationale
Shareholding Pattern % (Dec’ 16)                                §	 Company has preferred the inorganic route for

          11.5                                                       growth over the last few years as the management
12.4                                                                 likely perceives this as relatively ‘low-risk’. By going
                                                                     for the acquisition strategy, it has been able to avoid
15.4 60.8                                                            large losses inherent in any significant green-field
                              Promoter FII DII O thers          §	 Advertising growth is expected to accelerate with
                                                                     an eventual recovery in the Indian economy and
Company Overview                                                     considering company’s status as the most read Hindi
                                                                     newspaper in the country and its strong presence
Jagran Prakashan (JPL), incorporated in 1975, has business           in the rapidly growing Hindi markets should boost
interests in area of newspapers, outdoor, internet, magazines,       profitability.
below the line marketing solutions, and mobile value added      §	 Acquisition of ‘Nayi Duniya’ added new market (MP
services. The company publishes Dainik Jagran, a Hindi daily         and Chhattisgarh) to its regional footprint and the
newspaper. Dainik Jagran launched its first edition in 1942 in       integration of Radio City would be important factors
Jhansi and is brainchild of late Puran Chand Gupta.                  steering the growth ahead.
The newspaper was launched in order to reflect the free voice   §	 Music Broadcast Ltd. subsidiary of the company has
of the people. Later in the year 1947, the second edition was        come up with a public issue. This will further unlock
                                                                     value for the company.

                                                                §	 Business stays sensitive to the news print prices

                                                                     and any intensification in the prices coupled with
                                                                     exchange rate fluctuation can adversely affect the
                                                                §	 Company earns 75% of its revenue from advertising
                                                                     which is positively correlated to the economic
                                                                     activity. Any delay in economic recovery can harm
                                                                     the revenue potential of the company.


                                                                At CMP of Rs 186 per share the stock trades at trailing
                                                                P/E multiple of 13.7 (x). We have “Accumulate” rating
                                                                on the stock with a fair value of Rs 213 per share.

                                                                                            4 ARIHANT CAPITAL ¡ MARCH 2017
   1   2   3   4   5   6   7   8   9