JAGRAN PRAKASHAN LTD (JPL)
PRICE: RS.119 RECOMMENDATION: BUY
TARGET PRICE: RS.135 FY10E: EV/EBITDA: 13X; P/E:22X
HT MEDIA
PRICE: RS.140 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.153 FY10E – EV/EBITDA-12X, P/E-22X
DECCAN CHRONICLE HOLDINGS
PRICE: RS.150 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.158 FY10E EV/EBITDA: 7X, P/E:12X
IRS data- leadership remains unchanged; advertising environment & NP
prices to determine earnings trajectory. Stock gains look to have priced in
reasonable amount of good news and our optimism; accumulate on dips.
n IRS 2009 R2- no changes in leadership, ToI & DJ hold fort; business daily readership
dips
n Newsprint prices remain benign- positive for publishing companies- JPL, HT Media
and DCHL. We expect NP prices to rise marginally and stabilize at $600 plus
levels over FY11E.
n Macro for advertising environment has improved; we continue to expect a pick
up in advertising spends 2HFY10 onwards. We reiterate that traditional media
(print, TV broadcasting) will be the early beneficiaries of a pick-up.
n JPL- a strong regional franchise remains a preferred bet on our positive stance on
regional media markets. It is also better positioned than peers to lever margin
growth as newsprint prices ease, in our opinion. HT is to be accumulated, on
meaningful dips. DCHL remains cheapest stock in the peer set; reflecting competitive
concerns in new markets. Expect trading upsides on declines.
n Ratings and price targets are unchanged; we will continue to focus on advertising
revenue trends & NP prices, which we opine will remain earnings and share
catalysts over the medium term.
IRS 2009 R2- no changes in leadership, ToI & DJ hold fort
n According to data available, India’s Top 10 dailies have shown a marginal
growth in readership over the last six months. IRS 2009 Round 2 data also
showed that average issue readership of only two out of Top 10 dailies declined
over the period.
n In the English daily segment, ToI maintained its dominant position in both the
key markets- Mumbai & Delhi. ToI’s readership grew 3.9% over the period, primarily
driven by contribution from the Chennai edition that was launched prior to
IRS Round 2.
n Hindustan Times, the English daily of listed company HTML, declined 4% over
the period; other players retained their positioning in the segment with ‘The
Hindu’ at No.3 and ‘The Telegraph’ at No.4.
