X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Jagran Prak.: Depreciation, taxes mar profit growth - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Outlook Arena
  • Jan 30, 2015 - Jagran Prak.: Depreciation, taxes mar profit growth

Jagran Prak.: Depreciation, taxes mar profit growth
Jan 30, 2015

Jagran Prakashan has announced results for the third quarter of financial year 2014-2015 (3QFY15). The company has reported a 3% YoY growth in sales and 2% YoY fall in net profits respectively. Here is our analysis of the results.

Performance summary
  • The sales grew by 3% YoY during 3QFY15.
  • During the quarter, both raw material cost and other expenses as a percentage of sales fell by about 2% each. This contributed to the company reporting an operating profit growth higher than the sales growth.
  • EBITDA margin increased YoY from 22.7% to 26.3% in 3QFY15.
  • Profit after tax for the company de-grew by 2% YoY.

Financial performance snapshot
(Rs m) 3QFY14 3QFY15 Change 9mFY14 9mFY15 Change
Net sales 4,450 4,584 3.0% 12,502 13,137 5.1%
Expenditure 3,440 3,380 -1.8% 9,749 10,013 2.7%
Operating profit (EBDITA) 1,010 1,204 19.2% 2,752 3,125 13.5%
EBDITA margin (%) 22.7% 26.3%   22.0% 23.8%  
Other income 164 130 -20.2% 292 483 65.7%
Interest 95 79 -16.8% 244 236 -3.4%
Depreciation & amortisation 198 266 34.3% 569 749 31.6%
Profit before tax and exceptional items 881 990 12.4% 2,231 2,623 17.6%
Exceptional items - -   - -  
Profit before tax 881 990 12.4% 2,231 2,623 17.6%
Profit before tax margin (%) 19.8% 21.6%   17.8% 20.0%  
Tax 204 323   520 839  
Profit after tax  677 667 -1.4% 1,711 1,784 4.3%
Net profit margin (%) 15.2% 14.6%   13.7% 13.6%  
Share in profit of associates (0.6) 0.3   (2.1) 0.2  
Minority interest 0.3 (1.5)   1.4 (1.4)  
Profit after share of associates & minority interest 677 666 -1.6% 1,710 1,783 4.3%
No. of shares (m)         327  
Reported earnings per share (Rs)*         7.1  
P/E (x)*         18.8  
(*trailing twelve month earnings)

What has driven performance in 3QFY15?
  • Sales growth of the company was driven by advertisement and circulation revenue growth. While the former grew 6% YoY, the latter grew 8% YoY. High growth of 9% YoY was recorded by Dainik Jagran in terms of advertisement revenue. Dainik Jagran circulation revenue grew due to growth in both number of copies and an improvement in per copy realization.

  • The expansion in operating margins were mainly due to a fall in both raw material costs as well as other expenses as a percentage of sales, with the former led by lower newsprint prices.

  • Effective tax rate in 3QFY15 was higher due to benefit of accumulated losses of the Naidunia print business not being available. Thus the higher effective tax rate compared to the previous year's quarter as well as a jump in depreciation charges together took away from the bottomline growth during the current quarter.
What to expect?
While the fall of 22% YoY in the revenues from the non-print business brought down the overall revenues during the quarter, this was due to the management's attempt not to pursue un-profitable growth in this business. Consequently, this also indirectly led to the substantial improvement in performance at the operating level.

As far as the outlook over the next few quarters is concerned, the management has pointed out to the fact that even if there is an improvement in overall economy and business sentiments, it will take some time before it gets translated into higher advertisement spend for the company.

At the current price of Rs 134, the stock is trading at 16.9 times our FY17 earnings estimates for the stock. Considering these expensive valuations, we maintain a SELL rating on the stock.

To Read the Full Story, Subscribe or Sign In



DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group.
BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.
DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.
GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.
DETAILS OF ASSOCIATES:
  1. Quantum Information Services Private Limited (QIS) having its registered office at 103, Regent Chambers, Nariman Point, Mumbai 400021 is registered under SEBI (Investment Advisers) Regulations, 2013 vide Registration No. INA000000680. QIS provides information on mutual funds and personal financial planning, financial markets in general, and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services through its website www.personalfn.com
  2. Agora Holdings (Cyprus) Limited having its registered office at Akropolis, 59-61, 3rd Floor, Office 301 Strovolos 2012 Nicosia Cyprus belongs to Agro group (Agora) which owns www.agora-inc.com and is one of the largest and most successful consumer newsletter publishers in the world.
  3. Common Sense Living Private Limited (CSL) owns www.commonsenseliving.co.in and is an initiative that provides straightforward lifestyle and wealth-building ideas from wealth coach Mark Ford. CSL is 100% subsidiary Company of Equitymaster.
DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any financial interest in the subject company.
  2. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
  3. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research report.
DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:
  1. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
  2. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
  3. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  4. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  5. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
GENERAL DISCLOSURES:
  1. The Research Analyst has not served as an officer, director or employee of the subject company.
  2. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.
Definitions of Terms Used:
  1. Buy recommendation: This means that the investor could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
  2. Hold recommendation: This means that the investor could consider holding on to the shares of the company until further update and not buy more of the stock at current market price.
  3. Buy at lower price: This means that the investor should wait for some correction in the market price so that the stock can be bought at more attractive valuations keeping in mind the tenure and the objective of the service.
  4. Sell recommendation: This means that the investor could consider selling the stock at current market price keeping in mind the objective of the recommendation service.
Feedback:
If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

JAGRAN PRAKASHAN SHARE PRICE


Dec 12, 2017 09:39 AM

TRACK JAGRAN PRAKASHAN

  • Track your investment in JAGRAN PRAKASHAN with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON JAGRAN PRAKASHAN

JAGRAN PRAKASHAN 5-YR ANALYSIS

COMPARE JAGRAN PRAKASHAN WITH

MARKET STATS