@hitesh2710

On a relative valuation and opportunity basis: how is it better off as compared to HMVL or ENIL? both seems to have huge moats from a standalone point of view.

Regards
Sreekanth

Interesting results of yesterday!! New acquisitions are expected to significantly contribute in the coming qtrs. Brainhunter, MFX, and other new acquisitions done over the past couple of quarters - it is becoming more of growth story now than ever before.

R
Samir

JAGRAN PRAKASHAN

BACKGROUND

Started in 1942, as a newspaper company, the company is now focussed on print, digital and radio business. It also has a presence in the out of home advertisement segment.

Dainik Jagran is its flagship brand which is India's largest read daily newspaper by circulation. Other newspapers include Mid-day, Nai Duniya, Inquilab etc.

Company recently acquired Radio city radio stations across India.

Company has leading well visited 11 portals which cover a wide range of genres like news, education, blogging, gaming, classifieds and music.

The company launched its IPO in 2005 and made its debut on the bourses in Feb 2006.

PRODUCTS/SEGMENTS

PRINT

Company is a dominant player in the Hindi newspaper segment. Dainik Jagran established in 1942 is its flagship newspaper which is the largest read daily newspaper in India.

Advertisement constitutes 70% of company's revenues, while circulation revenues account for 20% while other segments including out of home advertising and radio account for the rest of 10% revenues.

Jagran has presence across 19 states and has 11 print publications across five languages. Daily circulation is 5 million plus and it has over 350 editions and sub editions.

RADIO

The company recently acquired the radio business of Radio City and currently has 39 radio stations. 31 stations are under Radio City brand name. 8 stations are under Radio Mantra and 21 stations under Planet radiocity.com

Focus of the company remains on print, radio and digital.

DIGITAL

Company's portals include jagran.com which is no 1 Hindi news portal and jagranjosh.com which company claims to be no 1 education portal.

OUT OF HOME
This division provides out of home advertisement options including billboards, signages etc.

BULLISH VIEWPOINTS

Dominant player in a sticky business and has been the most read national newspaper since 2003.

Having attained a dominant position in the newspaper segment, company now has set its sights on the radio and digital business as the next growth drivers.

Topline has grown from 1221 crores in 2011 to 1770 crores in 2015 with net profit growth from 208 to 308 crores in the same period. Sales and operating profits have been consistently growing year on year during this period.

Hindi print market has been showing consistent growth since 2011 of around 9% CAGR and is slated to keep growing consistently.

Company is improving its presence in the sunrise sectors of radio and digital.

BEARISH VIEWPOINTS

Newspaper business is being viewed as a business which could undergo disruptive changes due to internet penetration and the English newspaper segment is already a prey to this phenomenon.

Hindi newspaper segment has shown resilience among such disruptive chanes.

Sudden spike in newsprint prices might impact the company's profitability.

Radio and digital are competitive sectors with other aggressive players in the fray.

The advertisement revenues of the newspaper business are linked to the state of the economy and hence any drop in the economic activity might impact advertisement revenues.

BARRIERS TO ENTRY

With Jagran being a dominant player in the Hindi newspaper segment, its very difficult for new entrants to make significant headway. The existing players like Dainik Bhaskar could gradually erode company's competitve advantage. However going by the growth shown by the company and proactive measures taken by the management, company is likely to maintain its leadership position.

INTERESTING VIEWPOINTS

Majority of revenues and profits come from the newspaper segment and from Dainik Jagran. The other publications like Nai Duniya and Mid Day etc which were bleeding have turned profitable since past two quarters.

Management comes across as very competent and transparent after going through the Annual Reports, quarterly presentations, concall transcripts and history of dividends.

Company has been generating consistent cash flows and has been liberal in its dividend payouts.
Its dividend payout has been close to 50% in the recent history.

High promoter holding. No pledging.

Company has a healthy balance sheet and has robust return ratios.

VALUATIONS

Company posted EPS of 7.3 per share and paid a dividend of Rs 3.5 in FY 15. For the half year ended, company has posted EPS of 4.8 (not annualised) and slated to post EPS in excess of 9 per share. There is a high probability of dividend of close to Rs 4.5 per share which amounts to a dividend yield of 3% plus based on current price of Rs 140.

For those interested in studying the company in details, the company provides almost all information in its AR, quarterly presentations and concalls which are all available on the company website.

Disc: Invested and occupies more than 10% of my portfolio.

This is not a recommendation and anyone investing should do their own due diligence and then take any investment decision.

Hi Vivek: couple of questions:

1. At what price is your entry in Vidhi? Is it a small holding or you have added to your positions?

2. Satin credit care....52 week low is 296.....is that your purchase price?

3. Do you think Premco is overvalued ( inspite of good results today)?

I am curious because you seem to have a knack for picking stocks based on non numerical factors like management, sector, fund fancy and it has worked well.

thanks

On what basis were you expecting it to be same ?