PINC Sector Report – Print Media: On Growth Traction..

PINC Research initiates coverage on the print media sector with a positive view, underpinned by strong growth potential of regional media players. The latest Q2FY11 results support our view on growth in advertising volumes and yields for the industry. Macro factors such as increase in penetration and reduction in gap between 'Can Read' and 'Presently Reading' ensure expansion of the market as a whole.

Currently the print market is Rs190bn in size and is expected to grow at 9% CAGR to Rs225bn by 2012 (2010 KPMG report). We believe this growth would be fueled by Tier II and Tier III cities owing to increased consumption across various sectors, FMCG, Real Estate, Automobiles. During the recent economic slowdown, regional newspapers outperformed English newspapers, supported by a resilient business model, higher local content and ad revenue, and a healthy ad: circulation revenue mix.

Our Picks: Jagran Prakashan (TP Rs165, CMP Rs135, Upside 22%), Hindustan Media Ventures (TP Rs200, CMP Rs167, Upside 20%) Dainik Bhaskar Corporation (TP Rs315, CMP Rs265, Upside 19%). We recommend HOLD for Hindustan Times Media (TP Rs163, CMP Rs152, Upside 7%).

Source : Equity Bulls

Keywords