Jagran Prakashan reported revenue of Rs 2112.5m (growth of 6%), EBITDA of RS 390.5 m (30% growth) & PAT of Rs 218 (growth 41%). Topline growth came on the back of 5.5% growth in advertising revenues coupled with substantial 18% growth in circulation revenues as the company undertook cover price revision in the current period. International newsprint prices have come down from range of 950$/ton to around 560 $/ton, due to this sharp decline in newsprint prices, the operating margins improved by 380 bps yielding EBITDA growth of 30%. A sharp increase in other income by about 95% the PAT increased by 41%.
For the full year FY09 the company reported 10% growth in topline, a decline of 4% in EBITDA & 6.6% decline in PAT clocking an EPS of Rs 3. Jagran declared Rs 2 as dividend per share. At the CMP of Rs 80 the stock is trading at 22x FY10E consensus EPS of Rs 3.6. We do not have a formal coverage on this stock but given the current improving macro economic environment we expect the growth in advertising should revive. The full benefit of declining newsprint prices will also start showing in numbers by next quarter. Thus we have a positive view on the stock.
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