Jagran Prakashan - Moderate ad growth on high base... - ICICIdirect

Jagran Prakashan reported its Q3FY13 numbers, which were in line with our expectation operationally. The topline came in at Rs.348.9 crore (Idirect estimate - Rs.340.6 crore) growing 7.7% YoY driven by ad growth of 7.3% YoY and a circulation revenue growth of 12.2%. The ad growth, in line with DB Corp, in Q3FY13 was considerably better than that in Q2FY13, driven by additional three days of festivity in Q3FY13.

EBITDA came in at Rs.91.1 crore in line with our estimates. The EBITDA margin fell marginally by 16 bps YoY to 26.1%. PAT, however, fell below our estimates due to negative other income, which included a forex loss of Rs.5.5 crore and higher interest costs.

Going forward, the recent rate cut and CRR cut by the RBI along with the government's increasing focus on reviving growth is expected to improve the ad scenario for companies across the media sector. We expect, with an improving ad scenario, the stock to inch towards its five year average one year forward multiple of 16.4.

We have introduced FY15 EPS at Rs.9.4 and valued the stock at 14x FY15E EPS to arrive at a target price of Rs.131. We rate the stock as BUY.

Source : Equity Bulls

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