Jagran Prakashan reported a weak set of Q4FY20 numbers. Profit was down 83.1 percent YoY at Rs 11.2 crore despite lower raw material cost, mainly due to a weaker operational performance.
Shares of Jagran Prakashan gained 2.4 percent intraday on June 2 as ICICI Securities upgraded the stock to buy (from hold) despite weak numbers in March quarter.
The stock was up 1.01 percent at Rs 39.95 on the BSE at 1243 hours IST.
ICICI Securities expects the advertising outlook to remain challenging in the first half of FY21 (already on a lower base) and has incorporated earnings cut in its estimates accordingly.
"One key attractive feature of Jagran has been strong distribution to shareholders in the form of dividend and buyback (total distribution of Rs 1,102 crore over the last three years). Even in a rather weak FY20, total distribution of Rs 230 crore (around 19 percent of the current market cap) was made," the brokerage said.
The stock plunged 65 percent in the last one year.
With buyback tax benefits now done away with, ICICI Securities expects Jagran to distribute through a dividend (expected yield of 9 percent and 12.5 percent in FY21 and FY22, respectively). Therefore, it upgraded the stock from hold to buy with a revised target price of Rs 55.
CLSA also has a positive view on the stock as it retained buy call, though cut price target to Rs 50 (from Rs 66) as it reduced FY21-22 revenue estimates by 12-20 percent after Q4 earnings hit by weak demand and COVID-19 disruptions.
Despite lower raw material costs, Profit Was Down 83% YoY
Jagran Prakashan reported a weak set of Q4 FY20 numbers. Profit was down 83.1 percent YoY at Rs 11.2 crore despite the lower raw material cost, mainly due to a weaker operational performance.
Operating revenue (consolidated) declined 24.8 percent YoY to Rs 445.6 crore as print advertising revenue was down 24.3 percent YoY to Rs 262 crore. Subscription and radio revenue also registered de-growth of 9.6 percent YoY and 44 percent YoY, respectively.
EBITDA declined 60.7 percent YoY to Rs 54.3 crore due to a weaker topline with EBITDA margins at 12.2 percent, down 1,109 bps YoY. Softened newsprint prices helped restrict EBITDA decline partially, said ICICI Securities.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.