@ricky_ You have to work with whatever information is available. Many companies(smaller ones in particular) don’t even conduct conference calls. For example, Ajanta Pharma even though with a market cap of 13K crore don’t even conduct quarterly/yearly earning calls.
In a nutshell, you have to work with whatever information is available. Best is to look for information in last 5 years of annual reports. Plus you can use screener for numbers.
JPL is reluctant to take the private equity route to raise capital for its radio business,
Read more at: http://www.televisionpost.com/printradio/jagran-prakashan-to-consider-ipo-of-radio-biz-after-rollout-of-11-stations/ | TelevisionPost.com
DB corp has reported flattish numbers. Jagran will declare results on 30th and consider buyback of shares
Jagran Prakashan Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 30, 2016 inter alia, to;
Consider and approve the Audited Financial Results of the Company for the quarter and financial year ended March 31, 2016;
Consider a proposal for buyback of the equity shares under the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, subject to (a) receipt of approval of the scheme of
arrangement between Suvi Info Management (Indore) Private Limited, a subsidiary of the Company, with the Company, which scheme has been approved by the Hon’ble Allahabad High Court but is pending approval from the Hon’ble Bombay High Court; and (b) receipt of approval of the scheme of amalgamation between Crystal Sound 8c Music Private Limited and Spectrum Broadcast Holdings Private Limited, both subsidiaries of the Company, with the Company and demerger of the radio business undertaking of Shri Puran Multimedia Limited into Music Broadcast Limited, a subsidiary of the Company, which scheme is pending approval from the Hon’ble Allahabad High Court and the Hon’ble Bombay High Court.
for the sake of discussion what is more investor friendly ? a buy back or a liberal dividend payout.mpo is a buyback provided the price and % is attractive
Any updates on the Q4 results? Suppose to be out today.
Good results. Available on nse. excellent growth on all fronts i.e dainik jagran, subsidiary newspapers like midday, nai duniya, and radio biz which has also done quite well. Results have to be looked at after taking out the extraordinary items. In press note they have provided figures for earnings before and after extraordinaries. EPS of 10 plus for fy 16 on consolidated basis.
decision on buyback deferred as board is awaiting authorities’ nod for amalgamation.
CONFERENCE CALL - from Capital Markets
Expects 20% EPS improvement in FY17
Jagran Prakashan (JPL) held a conference call to discuss the financial and operational performance for the quarter ended March 2016. Top management of the company addressed the call.
For the quarter ended March 2016, the consolidated operating revenue increased by 25% to Rs 529.50 crore, Advertisement revenue increased 34% to Rs 391.50 crore. Circulation revenue was up by 8% to Rs 106.17 crore. Digital advertising revenue up by 76% to Rs 6.27 crore. The net profit increased by 62% to Rs 80.15 crore.
On standalone basis, the company reported 11% growth in revenue to Rs 442.24 crore. Advertising revenues grew 14% to Rs 310.77 crore, Circulation revenue was up by 8% to Rs 99.93 crore. Digital advertising revenue up by 70% to Rs 5.28 crore.The net profit grew 22% at Rs 60.65 crore.
Circulation growth clarification - was on expected line. The company believes that the cover price should be increase, but circulation revenue growth driven by cover price every year is not possible. Dainik Jagran has highest per copy realization of Rs 2.4.
Circulation volume increased 3-4% in Q4.
Sector doing well- Automobiles (2 wheelers), 4 wheelers doing well and is expected to do much better in FY17 driven by new launches
Online advertisement contributes ~1% to the company’s total advertisement pie.
Consolidated EPS (before extraordinary items) of Rs 10.12, up by 39%. Increase is not just because of radio, but also due to Midday and Nai Duniya. Radio contributions to EPS is Rs 1.5, Miday is Rs 0.46 and Nai Duniya isRs 0.11.
Digital Business is one of the core businesses of the company. It has 2% market share in digital and is targeting 8% market share over the next 5 years. Money save from closed editions is good enough for Digital business to invest.
The mgmt said that buyback of share declined by board of directors.
50% of the company’s revenue comes from UP. The company records Rs 100 crore revenue from UP government. Ad yield of the second competitor: 50-60% of Jagran Prakashan
Nai Dunia advertisement grew 10% in FY16. It reported 13.5% YoY advertisement growth in Q4FY16. Ad yield of Nai Dunia is 25% of market leader. Nai Dunia’s EBITDA margin is 2%.
Midday reported 11% advertisement growth in Q4. Reported PAT for Midday is Rs 18-19 crore. EBITDA margin for Midday is 20-21%. It is expected to improve to 24-25% in FY17
Net realization improved 25% in Punjabi Jagran. It improved 5-6% YoY in Inext. Net realization improved significantly in Midday
Radio contribution is more than 10% of revenue, which is highest for any print company having radio business
New radio stations will be rolled out by CY16. The blended margin will fall to 29-30% in the first year. It will improve to 31-32% in the second year and 33-34% in the third year
Radio Mantra has Rs 15 crore debt which was given by Jagran Prakashan. Mantra revenue is not more than 12% of Radio City
The company saved Rs 34-35 crore due to lower newsprint prices. The company printed additional pages costing Rs 42 crore driven by increase in ad space
Newsprint quantity grew 8% in FY16
Receivables days for Midday were 80-90 days. Receivable days for Dainik Jagran were at 70. Radio City receivable days not more than 100. Trade receivables for Radio City Rs 80 crore
The company expects the print advertisement to increase by 11-12% in FY17. Radio City is expected to report over 15% growth. if new stations are rolled out by CY16, then it can improve to 18-19%. Digital revenue is expected to report 50% growth. Operating profit is expected to grow by 14-15%. The company expects flattish depreciation in FY17. The company expects lower interest burden and lower taxation in FY17. The company expects 20% EPS improvement in FY17
UP elections should bring in more adv revenue? if buyback is declined what about a dividend?(invested at lower levels)
Excellent notes. Covers all the important points.
One interesting thing management mentioned was that one should value the company on SOTP basis and not based on consolidated EPS. He was referring to the radio business especially. My interpretation was that he was hinting that radio business is not appropriately factored in the current valuations. When we add the plans to buy back, we may see this as strong signal to investors/analysts that the stock in undervalued. Though it was slightly unusual to see management indicating the right way to value the company!
NT Asia discovery fund has raised stake from 4.89% to 5.43% by acquiring 0.54% from market
dhwanil
Looking at the sequence of events and management commentary for past 3 quarters, it seems groundwork is being laid for de merger of radio business. If and when this happens it should be great news for shareholders for JPL.
disc; invested and occupies more than 10% of my PF
@hitesh2710 Hitesh Jee,
In FY16 consolidated results, I see a major difference between diluted EPS before extraordinary items and diluted EPS after extra ordinary items. As an investor, which is the one we should focus on for P/E calculation ?
Disc : Not invested in jagaran prakash an but invested in HMVL
I found a research report from Stock Axis. It is giving a projection of M&E industry.
Link to Yes Securities latest research report
Have a question on the dividend -
After listening to a couple of management concalls from analyst/investor meet in Dec and post Q3 results I found the management to be extremely friendly towards minority shareholders and the liberal dividend payouts was a great example of that (resulted in ~2.5% div yield at that time)
As the decision on buyback of shares has been deferred till the amalgamation nod from HC - should the board have recommended dividend in the last meeting or they can’t do it if it wasn’t in the agenda? Anyway, they would have called for a separate meeting by now if they had plans of the same. I know that buyback is a much more tax efficient method for distributing profits but at the moment there is no date given when the amalgamtion would be approved and neither is any dividend declared for FY16.
Shares of print media companies ended higher on Friday after the government raised the cap for foreign direct investment (FDI) to 49% in these entities.
The earlier cap limited FDI to 26 per cent. The new directive brings FDI limit on par with electronic media.
Read more at:
http://economictimes.indiatimes.com/articleshow/53109689.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Jagran CFO states it wudn’t help too much unless Foreign players gets any rights
Disc :Invested
Dear All,
The posts are very useful to me, a new member and investor. I wanted the group’s opinion on the recent merger proposal between Shri Puran Multimedia (SPML - a promoter owned company which has 8 radio mantra stations) and MBL (the company having the radio city business (20 stations + 11 in recently concluded auctions) - JPL holds 92.82% on MBL).
My analysis is as follows.
The salient features related to the merger are as below
a. After the merger the JPL stake in MBL will come down to 86.38 from 92.82%
b. The promoters will directly hold 6.94% in MBL. The remaining 6.68% will be held by employee trust of MBL.
c. The consideration paid is 112 shares of MBL for every 10 shares of SPML. This is based on a valuation of 640.6 crores of MBL business and 48 crores of SPML business.(Refer to the site http://jplcorp.in/new/pdf/JagranPostalBallot_final_pages.pdf page 48 - E&Y valuation report).
d. The market cap of JPL at current price of share price of 179.05 is 5874 crores. This means excluding radio business the valuation of JPL at current price is 5874 - 640.6 = 5233.4 crores.
e. As per conference call transcript Q4 2016, the management has indicated that of total EPS of 10.12, radio city contributes 1.5, the remaining 8.62 is contributed by the print and digital business.
f. Considering point c,d and e, the p/e of MBL is computed as follows
PAT of radio business - 1.5 per share * 32.68 shares = 49.02 crores. P/E = 640.6 / 49.02 = 13.07.
g.Considering point c,d and e, the p/e of JPL businesses other than MBL is computed as follows
PAT of other than radio business - 8.62 per share * 32.68 shares = 281.71 crores. P/E = 5233.4 / 281.71 = 18.58.
Now I have the following questions.
a. Am I making any mistake in the above calculations that make my further analysis incorrect?
b. Radio being the growth business, I would assume that it would have a higher valuation. If radio business is going to be valued at only 13.07 P/E then is the valuation of JPL businesses other than radio very high? Should the price of JPL be not more than 10.12 per share * 13.07 times = 132.27. Is the company overvalued by more than 35%?
c. Alternatively, if we assume the valuation of MBL is incorrect (undervalued) then that can only mean that the promoters wanted a higher share of MBL for themselves by this arrangement. How should we view this possibility when looking at investing in this company?
d. It is believed that JPL paid 410 crores for the acquisition of Radio city. On top of that it had to pay 210 crores for migration of all the acquired stations to phase 3. This means the total consideration paid for radio business was 620 crores in late 2014. Does that mean in 1.5 years the additional value to the radio business is only a paltry 20 crores - that is a 3.2% growth? (Source for price paid is http://www.livemint.com/Money/dD5dQSk1EDPbAK6vQa5TYN/Jagran-Prakashan-stock-falls-after-the-radio-buy.html)
Please do provide your views.
Regards
Shivram.
P.S. I am not sure if I should disclose ownership of any share that I discuss here. But just to be on the safer side I do hold shares in JPL. I am doing this analysis to decide if I should increase my investments in this company at regular intervals.
One question, is radio city business a part of the listed company or is it in the subsidiary Music Broadcast Limited? Thanks
Hi Niraj,
Radio City belongs to Music Broadcast Limited (MBL). Jagran Prakashan holds around 93% in MBL.
Regards
Shivram
