Buy Jagran Prakashan; target of Rs 190: Axis Direct

Axis Direct's research report on Jagran Prakashan

JAGP’s Q2 consol. print ad growth (up ~2% YoY) was impacted by 10% YoY decline across local (due to GST-led slowdown) and govt ad spends (combined contribution of 50-60% to ad revenues) - this negated 10% YoY rise in national spends. While GST-led slowdown in ad spends is expected to ease in H2, FY18 ad growth will get impacted.  While JAGP increased circulation copies across its key markets (+4-5% YoY), circulation revenues remained subdued (flat YoY) due to competitive pressure in UP (from Hindustan, Amar Ujala) and Bihar (Dainik Bhaskar).

Outlook
We revise our FY18/19E EPS by 4-5% to factor in slower ad and circulation growth. Maintain BUY with SoTP-based revised TP of Rs 190 (15x FY19E EPS for print business & 20% holding company discount to Radio City’s market cap; Rs 205 earlier).

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