Hi Hitesh,
Interesting post. I have been invested in HMVL and I understand the newspaper business. I agree with you that its a sticky business as it is a habit product for consumers and thus switching costs are high. The thesis in HMVL was margin expansion and severe under-valuation.
In Jagran, I understand that the reason for attractiveness here is primarily driven by the radio & digital business?
The newspaper business will do an EBITDA of ~500-550 Crores based on current numbers this year. If we accord a multiple of 10X to this- which looks fair to me given the long term prospects of the business. It comes at ~ 5000 Crores EV. Current EV is 4600 Crores. So essentially we are saying the rest of the business o.e. radio & digital are coming for free? Is that the broad thesis?
I haven’t looked at the radio business before, but looks similar to print business atleast in terms of profitability.
Also just saw that ENIL is ~ 500 Crore company with a market cap of ~3000 Crores.
Radio City is ~ 200 Crore sales company with similar profitability. What value will market assign to it will be interesting to see. JP paid ~ 600 Crores for the acquisition as per this article
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