Angel Broking recommends Buy on Jagran Prakashan with a 12 months Target Price of Rs. 140

For 4QFY2014, Jagran Prakashan (JPL)'s top-line performance was almost in-line with our estimates, growing by 14.2% yoy to Rs. 392cr (our estimate was of Rs. 400cr). On the operating front, the EBITDA grew by 47.4% yoy to Rs. 80cr and OPM expanded by 458bp yoy to 20.3%. Consequently, the net profit grew by 51.1% yoy to Rs. 58cr.

Ad revenue up 16.3% yoy & circulation revenue up 13.0% yoy: The company's advertising revenue for the quarter is up 16.3% yoy to Rs. 265cr, primarily driven by increase in yields. Circulation revenue is up by 13.0% yoy to Rs. 86cr due to combination of increase in cover price and volume growth. Consequently, the standalone top-line grew by 14.2% yoy to Rs. 392cr.

Robust operating performance: JPL's flagship daily, Dainik Jagran's margin remained flat yoy at 29.1%. The operating loss of other publications has remained flat yoy at Rs. 13cr for the quarter, in spite of increase in circulation. Nai Dunia is still in the investment phase and is expected to breakeven only by the end of 4QFY2015.

Outlook and valuation: The stock is currently trading at attractive valuations of 12.3x FY2016E consolidated EPS of Rs. 9.3. Considering Dainik Jagran's status as most read Hindi newspaper and its strong presence in rapidly growing Hindi markets of Bihar, Haryana, Jharkhand, Punjab, Madhya Pradesh and Uttar Pradesh, we believe, JPL to benefit most from eventual recovery in Indian economy. Hence, we assign a target multiple of 15x FY2016E EPS and maintain our Buy rating on the stock with a target price of Rs. 140.

Shares of JAGRAN PRAKASHAN LTD. was last trading in BSE at Rs.122 as compared to the previous close of Rs. 118.95. The total number of shares traded during the day was 11158 in over 308 trades.

The stock hit an intraday high of Rs. 122.4 and intraday low of 117.35. The net turnover during the day was Rs. 1350452.

Source : Equity Bulls

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