Buy Jagran Prakashan; target Rs 130: Unicon Investment

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Buy Jagran Prakashan; target Rs 130: Unicon Investment

Unicon Investment is bullish on Jagran Prakashan (JPL) and has recommended buy rating on the stock with a target price of Rs 130 in its February 1, 2012 research report.

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Unicon Investment is bullish on Jagran Prakashan (JPL) and has recommended buy rating on the stock with a target price of Rs 130 in its February 1, 2012 research report.

"Jagran Prakashan Ltd (JPL) revenue performance was in line with our estimates however EBITDA performance was above our estimates. JPL registered a 15% YoY growth in advertisement revenue was highest in the industry. The company posted 7% growth in circulation revenue to INR 622 mn from INR 570 mn in Q3FY11. The company registered a decline in EBITDA margins on YoY basis to the tune of 511 bps. Compay's PAT also witnessed a decline of 21.5% on YoY basis on account of exchange fluctuation loss of INR 86.7 mn( INR 56.7 mn relate to long term liabilities)."

"Circulation revenue grew by 9% YoY to INR 622 mn in Q3FY12 from INR 570 in Q3FY11 driven primarily by increase in cover price in some regions and increase in circulation of I-Next which witnessed a growth of nearly 28% and Dainik Jagran by 6.64% in comparison with Q3FY2011. We expect circulation revenue to show robust growth in Q4FY12 as it will have full impact of price increase which was done in December 2011. JPL registered a de- growth of 5.2% in EBITDA on YoY to INR 851.2 from INR 897.5. For the same period EBITDA margin witnessed a decline of 511 bps from 31.4% in Q3FY11 to 26.3% in Q3FY12. The decline was led by 31% increase in raw material consumption. This increase in consumption was contributed by 15.4% increases in Newsprint price, increase in circulation to the tune of 16.6% (Dainik Jagran) and launch of a new brand Punjabi Jagran. Higher depreciation and Forex loss of INR 86.7 mn affected the PAT margins."

"Dainik Jagran the flagship newspaper JPL maintained its overall leadership in Q3 2011. We believe the company is well placed to capitalized growth in its market. Moreover, robust revenue is expected in Q4FY11 due to the UP election and full impact of cover price increase. We maintain Buy on the stock with a price target of INR 130," says Unicon Investment research report.

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To read the full report click on the attachment