Invested in Jagran since August 2016.
Checked 5 daily publications in Delhi UP And Bihar.
Advertisements by Auto, both 2 wheelers and Cars etc. Are full page and range between 3-5 daily for past 1 month now, effectively much higher for last 15 days.
Real Estate also becoming good contributor.
Political advert in Bihar has started and covers 4-5 page of State Govt. Advert and political ads. Daily across editions.
FMCG ads by HUL and Dabur are a regular feature.
Many tender notices, gazettes etc. Are also in high frequency.
Many editions have seen price rise between 50 paise to Re.1 and weekend editions between Rs.1-2.
May ensure 100 crores plus of circulation revenue this quarter.
ALSO online MGMT. interviews suggesting 90% circulation numbers back on track and price rise will bring numbers on growth track.
One exceptional point, pagination has reduced by 15% across editions, reducing raw material cost straight away by 15 crores per quarter. fortunately, it has happened due to cut down on less sensational news/topics. This would recuperate losses suffered in last quarter and hopefully by end of this fiscal company will be back to 450 crores of FREE CASH GENERATION (STANDALONE). With 70% profit as dividend distribution expected. An 8-9 bucks dividend will be soon a reality re rating the stock and catapulting it to above 200. Although i don’t guarantee to wait till then for my portfolio.
Excellent article. Can Jagran and DB Corp copy NYT and WP over the next 15-20 years? They are the biggest hindi newspapers. There is no dearth of tech and product talent in India. The management of both these companies are good.
Another good thing is circulation is still going strong in India and is growing. Most people are misinformed and think this is a dying business. But they fail to understand the strong moat in newspapers. Citizen journalists and shouting matches on TV cannot replace quality journalism. Reading newspapers is a habit. These newspapers are strong household brands. They have a strong distribution and reach. They are almost part of Indian culture.
I am betting on their revival and believe that the market is wrong in giving them a 4 PE valuation. Hope I am right and the markets are wrong.
Discl:
Invested in both Jagran and DB Corp which together make up 10% of my pf
I was a newspaper reader since my childhood and I broke that habit for life in last 6 months! If see the continuous fall in the stock price and it is not able to sustain over 200 DMA since 2017. In term of profits also it kept falling since 2017. I agree it could a play for reversal to mean but difficult to take call looking at the situation unless upcoming numbers tell another story. Another point to add I could not find any ads on their websites so not sure how they are leveraging digital play
The result appears to be good. From 19 cr loss in June quarter to 26 crore profit in September on a standalone basis. Print and digital division operating margings have increased as well. But this is not being reflected in the stock price. Stock is down 3%… is it because no dividend declared ?
Doe anyone know if the promoters are in some other business which is under stress or something? because the PE ratios arent justified for a stock with ~7% div yield; unless everyone thinks that print is going to die within the next 5 years ( which is definitely not the case in India)
Solid set of numbers. 75 percent in topline recovery and terrific bottom line cover. Still trades at a 1 year forward PE of 4. Massive re-rating coming. Ex-Radiocity investment the PE will drop to 2/3 PE. Can easily be 2x in a year as a base case scenario.
Circulation revenue at 85%, 90% in Bihar, UP and UK, Cost controls aiding solid bottom line. Decent recovery by radio city by gaining solid market share. Very optimistic on the turnaround story
Not able to recall the exact source bt DB Corp mentioned smwhr that the spread of fake news over social media is increasing credibility of newspapers. This, alongside the above piece shared by @HIMSHAH above, is certainly a positive for newspaper industry.
Ultimately i think monopolistic ambitions of digital giants are getting noticed. No country will allow monopoly for MNCs sitting in another country determine how news is presented and opinions are shaped in their country. Governments and politicians probably cant afford that to happen. So ultimately they will ring fence news industry so that domestically it is controlled. With such large local languages and local content, it is likely that some of the main players like jagran or DB corp transition to digital and still survive over longer term. My thought is that governments are slow to learn tricks of trade of digital world in controlling them, but they will ultimately manage it when it comes to their own survival.
It appears a case of extreme pessimism of multi year under performance and derating, technical break out with price volume action suggests a turn around in mkt perception
Because the company is undervalued they should buy as much as they can, it’s good for them as well as for the stockholders (if you hold for the long term).
Jagran seems like a great promoters, no growth type stock.
Music broadcast has declared 100rs cr worth NCRPS to its minority shareholders - This is exceptional move & shows their intent for creating minority value.
Company is generating super cool 100+cr cash every quarter. On a yearly basis it’s upwards of 400cr with very less reinvestment.
3.Entire company is available at 3.5× yearly cashflows & promoter is buying back shares every year and increased their shareholding from sub 50s to 65% now. Post current buyback their shareholding will move to 70%.
15% of the company is already held by HDFC MF
,ICICI MF & Franklin - Highly concentrated shareholding.
They dedicate a slide in their investor presentation to show how much cash they have returned to their shareholders - True commitment to deliver value.
Despite the business is dying, consumer behaviour is hard to change. This business can still generate this level of cashflows for few more years.
Speculation:
There can be one more buyback next year which can move the promoter shareholding to 75% & HDFC MF, Franklin, ICICI MF holding in excess of 16%.
Promoter has already pledged the entire stake and took a credit line, it makes sense for them to delist the company and buyout other shareholders 1-2 years down the line & this is pretty much possible with the current cash generation ability of the company.
I’m still not entering this stock since the current prices are artificially inflated due to buyback. Post buyback the price will settle down.
Print media is a dying business & Markets usually don’t give much value to such business. It is highly likely that prices will crash from the current 60 level. Would be a super deep value bet if bought at 2× cashflows.
Super deep value bet at 2X Cashflow - That would mean buying Jagran Prakashan at market cap at around INR 750 crore. Are you expecting a 50% drawdown from the current price?
Annualized - I still believe they can make around INR 170 crores+ as net profit in FY22 (assuming covid cases go down in 2 months time) which would mean an EPS of around INR 7. They have a reputation of paying good dividend. Assuming they pay 60% as dividend i.e 4.2 - This equates to pretty good dividend.
Do you think there is an arbitrage between Jagran vs DB Corp because of Jagran buyback. First time in last decade that Jagran Prakashan is valued at more than DB Corp.
And when the economy cycle turns 2 years down the line - This and DB Corp could quite possibly turn out to be 3x+ bet if they manage this cycle well.
Disclosure: Minor tracking position in Jagran Prakshan.
