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.: Ads boost overall revenues - 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?  

Jagran Prak.: Ads boost overall revenues
Feb 11, 2012

Jagran Prakashan has announced results for third quarter of financial year 2011-2012. The company has reported a 13.3% YoY growth in sales and a 21.5% fall in net profits. Here is our analysis of the results.

Performance summary
  • Top line increased by 13.3% YoY during the quarter. The same witnessed a similar rise of 12.2% in the 9 month period ended December2011.
  • Operating expenditure was up by 21.7% YoY thereby resulting in a fall in operating profits by 5%.
  • Operating margins fell drastically from 31.4% to 26.3% during the quarter.
  • Net profits fell by 21.5% in this quarter. The same fell by 16.5% for the year till December 2011.


Standalone financial snapshot
(Rs m) 3QFY11 3QFY12 Change 9mFY11 9mFY12 Change
Net sales 2,860 3,240 13.3% 8,327 9,341 12.2%
Expenditure 1,963 2,389 21.7% 5,619 6,873 22.3%
Operating profit (EBDITA) 897 851 -5.2% 2,708 2,468 -8.8%
EBDITA margin (%) 31.4% 26.3%   32.5% 26.4%  
Other income 55 (42) -175.4% 177 69 -60.8%
Interest 21 44 112.3% 47 100 113.0%
Depreciation & amortisation 146 165 12.9% 404 475 17.7%
Profit before tax 786 600 -23.6% 2,433 1,962 -19.4%
Profit before tax margin (%) 27.5% 18.5%   29.2% 21.0%  
Tax 259 187 -27.9% 796 594 -25.4%
Profit after tax  526 413 -21.5% 1,637 1,368 -16.5%
Net profit margin (%) 18.4% 12.7%   19.7% 14.6%  
No. of shares (m)         316.27  
Diluted earnings per share (Rs)*         5.7  
P/E (x)         17.7  
* trailing 12 months

What has driven performance in 3QFY12?
  • Jagran Prakashan’s overall revenues grew by 13.3% YoY during the quarter. The growth in advertising was a healthy 14.9% while subscription revenues were up by 9.3%.

  • Revenues from digital business stood at Rs 23.2 m up by 15.65% YoY over the same quarter last year.

  • Higher newsprint costs (up by 15%) hurt the operating profits of the media company. Raw material costs consisting mainly of newsprint costs are 35% of the total sales of the company. The operating profits were thus down by 5% YoY during the quarter. For the 9 month period, operating profits were down by 8.8%.

  • Operating margins fell drastically from 31.4% to 26.3% during the quarter. During the 9 month period too, operating margins were down by around 6%.

  • Higher depreciation charges (up by 13%) impacted the bottom line of the company. Net profits were down by 21.5% YoY during the quarter. The same were down by 16.5% during the year till December 2011.

    Cost break-up
    (% of sales) 3QFY11 3QFY12 Change 9mFY11 9mFY12 Change
    Raw materials consumed 863 1,135 31.4% 2,421 3,200 32.2%
    % sales 30.2% 35.0%   29.1% 34.3%  
    Staff cost 363 407 11.9% 1,064 1,175 10.4%
    % sales 12.7% 12.5%   12.8% 12.6%  
    Other expenses 736 848 15.2% 2,134 2,499 17.1%
    % sales 25.7% 26.2%   25.6% 26.7%  
    Total expenditure 1,963 2,389   5,619 6,873  

What to expect?
Jagran Prakashan continues to expand its digital operations. The company this quarter was impacted adversely due to volatility in foreign exchange rates along with higher newsprint prices. Although the newsprint prices are expected to stabilize in near future, growth in topline is still hard to achieve. The company performed the best among all peers in terms of advertising revenue growth (14.9%). Innovative strategies adopted by the management helped in boosting revenues during the quarter. But, profit margins were hit badly. At the current price of Rs 100, the stock is trading at 15 times our expected FY14 earnings. At current valuations, we maintain our negative view on the stock.

To Read the Full Story, Subscribe or Sign In


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


Feb 20, 2018 09:23 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 - MT EDUCARE COMPARISON

COMPARE JAGRAN PRAKASHAN WITH

MARKET STATS