Decent quarterly results declared today
Rookie question - the recent Accounting Standard changes meant that the real 12% PAT/EPS growth became 5% for the Q1 results. Are these accounting standard changes going to have a similar affect every quarter till Q4 FY17?
Concall at 11:30 am today - maybe can get more information there. Especially want to hear about the update on buyback and current dividend policy.
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Key highlights from the results presentation:
- Decent growth in all verticals: Print, Radio and Digital. Margings have been maintained despite strategic investments in circulation and advertising.
- Nai Duniya moves from red to green.
- Exited loss making Josh Plus and City Plus
- Maintains leading position in the earlier areas.
- Slide 18 emphasizes that “Sum of the parts is greater than the whole”:Radio and Print. This resonates with the earlier company provided information and passes on a positive message that ground work may be laid in the future wrt demerger of these two verticals.
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Did a quick comparison on the ad rates charged by the three major hindi newspaper publishing houses in all the states for a front page colour ad. A few interesting trends emerge - There actually isnt a huge difference in pricing between DB and JP. Where there is pricing power because of monopoly (as is the case in Rajasthan), the rates are significantly high. DB seems to be leading most of the markets it is present in. But this is one of those few oligopoly markets where each player commands a similar premium, respects mutual pricing decisions and selects its own geographical niche to compete.
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The awaited approval is here
Jagran Prakashan Ltd has informed BSE that the Hon’ble High Court of Judicature at Allahabad has considered and approved the amalgamation of Crystal Sound & Music Private Limited (“Crystal” or “Transferor Company I”) and Spectrum Broadcast Holdings Private Limited, earlier known as IVFH Holdings Private Limited (“Spectrum” or “Transferor Company 2”) with Jagran Prakashan Limited (“JPL” or“ Amalgamated Company), and the demerger of Radio Business Undertaking of Shri Puran Multimedia Limited (“SPML” or “Demerged Company”) into Music Broadcast Limited (“MBL” or “Resulting Company”). The Scheme is pending for approval from High Court of Judicature at Mumbai and other requisite approvals.
The Scheme shall be effective from the date of filing of certified / authenticated copies of Orders of the High Courts with the Registrar of Companies Uttar Pradesh and Registrar of Companies at Mumbai, as applicable.
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Please see the above analysis by Dhwanil posted in this thread. The radio business is not to be valued using EPS.
Thanks for your response. But I would like to point out that I only used P/E for ease of explanation and computation of per share price. I derived the valuation of radio business from the E&Y report that was submitted for the SPML and MBL merger. MBL has been valued by E&Y at 640.6 crores. That is why I am worried. If this is the right valuation for radio business then Jagran is very expensive at current price. If this is not then it seems to cast a shadow on the management as they then are giving themselves more shares of Jagran in return for the SPML business. I suspect it is more likely the later. Hence I wanted to know how much importance should we give to this fact when making an investment decision in Jagran.
Sir can you explain… what’s going on here… Announcement of Amalgmation and Demerger of radio business it seems
SEcomplianceamalgamation.pdf (115.7 KB)
It looks like consolidation of various entities holding stakes in radio business. I wont go too far to say there is definite demerger of radio business although that could remain a possibility.
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Jagran Prakashan announces IPO of MBL:
Has Jagran declared its september quarterly results? I cannot find anywhere!
results are slated on 14th dec according to bse.
Jagran results were declared today which were below my expectation
Revenues up 6.3%, 459cr vs 432cr
PAT up 13.9%, 75.7cr vs 66.44cr
Radio grew 33.1% in H1 with good operating profit margins of 36% but this includes numbers of Radio Mantra
Other publications posted some loss due to “investment in strategic increase in circulation coupled with low growth in ad revenue”
Finance cost reduced to 8.9cr from 15.7cr
Borrowings stand at 317.5cr (LT) + 106.8cr (ST) while investments at 587.7cr (non-current)+ 348.8cr (current) and cash of 28cr
Commentary- Print business was subdued partly due to delay in payment of 7th pay commission. Oct was good but Demotization effected results in November.
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I had missed out the following-
Jagran Prakashan (JAGP) reported standalone numbers for 1H/2Q, as against consolidated reporting earlier, as the scheme of arrangement for amalgamation of its subsidiary, Suvi Info, is still pending. Hence, consolidation of financials for the subsidiary was not possible under the current regulatory framework. Also, no direct comparisons could be made with estimates. All commentaries are on standalone financials.
Jagran spending 302,25,00,000 INR for buyback.
Yes. Buy Back of 1.55cr shares or 4.74% of the total share outstanding at Rs195 per share. Good intent, but a small Buy Back. This is not expected to give a meaningful return. Hence, the stock has not run-up to Rs195. There are two things of interest for this company - 1. How fast the advertisers bounce back and start advertising to Jagran and 2. The IPO of its subsidiary, Music Broadcast Ltd. is expected to de-leverage its balance sheet. If Music Broadcast continues to remain non-dependant on parent, Jagran Prakashan; Jagran Prakashan consolidates will have a stronger free cash flow generation.
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UP elections ad spends should also provide a welcome kicker to earnings
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Jagran Prakashan’s FM Radio arm gets Sebi’s nod for Rs 400 crore IPO
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Any thoughts on Music Broadcast Limited IPO ??
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Radio is a strong medium of communication and is relevant for people of all classes. All mobile phone’s have radio facility in India and mobile phone’s penetration in India is significant. This medium has now started making profits (industry wise) in the past 4-5years. Advertisers are also waking up to this medium now. However, having said that only the top-3 radio channels in terms of listenership in any given city is relevant for advertisers (akin to print media or TV broadcast media). Within the top 3 radio channels, the ad-inventory utilisation blended is low at ~50%. This indicates a huge opportunity to scale up in terms of getting higher advertising volumes within the top 3 radio stations in the pecking order. Radio city is present in 39 cities and is either No.1 or No. 2 in these cities in terms of listenership.
The company is highly profitable with Operating profit margins of 33%+. They have paid substantial less (~Rs65cr) for acquiring 11 new stations in Phase III bids, compared to its peer ENIL. Though No.2 radio station in terms of reach (ENIL is No.1), it is much more profitable. To quantify this statement, ENIL has ~60% larger footprint that MBL, but the differential in the revenue between the two is only ~40%.
Now speaking about the objects of issue. Of the Rs400cr being raised, ~Rs200cr will be used to retire debt taken from the parent, Jagran Prakashan. So that makes the balance sheet lighter for both the parent and the subsidiary hence lower interest cost burden, boosting the bottom-line. Of the remaining Rs200cr, the company plan to utilize it for expanding its base of operations, this may be through an inorganic route only after the lock-in period of the Phase III allocated licences get over. Lock-in period gets over in another year or year and a half. Till that time, in my view Rs200cr will be invested and that will boost the other income in the PnL, again flowing down directly to the bottom line.
Finally, Jagran Prakashan (parent) is a strong corporate governance compliant company and has been rewarding its shareholders consistently since long. It is expected that Music Broadcast’s business DNA will match its parent.
Keeping all the above in view, I believe one should subscribe in Music Broadcast’s IPO.
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