Increasing literacy, growing consumerism, entry of global brands in the country and opening of the sector to foreign investors has led to the growth in print media. Print majors are expanding their presence and product offerings. This has led to increasing competition and price wars. In this article, we shall compare the north India newspaper majors Jagran Prakashan and HT Media.
About the companies
Jagran Prakashan:Jagran Prakashan Limited (JPL) publishes Dainik Jagran, which is the largest read Hindi daily in India. It has 37 editions with more than 150 sub editions. It sells 2.7 m copies and has a daily readership of 16.5 m (IRS 2007 R2). It is circulated in Northern and Central India.
HT Media: Started in 1924, HT Media (HTML) is one of India's leading print media companies. HTML is the second largest player in English via its brand, Hindustan Times (HT) and the fourth largest player in Hindi through Hindustan. It covers 65% of the population and has a readership base of 8.6 m (IRS 2007 R2) readers and a daily circulation of 2.25 m copies.
Let us have a look at the financial and operating performance of the two companies in recent times.
Net Sales (FY08)
Sales CAGR - (FY04-08)
Operating margin (FY08)
OPM average - (FY04-08)
Profits CAGR - (FY05-08)
Net margin (FY08)
Return ratios average (FY05- FY08UA)
Debt to equity
Price to earnings (TTM)
Price to book value
Revenues: HT Media has grown at a faster rate than Jagran Prakashan on account of the expansion of its English newspaper into new territories. English papers command higher rates than the Hindi newspapers. With the launch of Hindustan Times in Mumbai and Mint (business daily), HT Media is able to garner higher ad revenues. Ad revenues for FY08 formed around 85% of its sales. In case of JAGP, ad revenues form 65% to 70% of its revenues. The new avenues like radio and internet (in case of HT Media) and OOH and event management (JAGP) are still in the investment phase.
Operating parameters: Jagran Prakashan has been more successful than HT Media in managing costs. HT Media, on account of its different newspaper offerings, has higher staff costs and other expenses. Further, the new ventures of JAGP are less capital intensive. In case of HT Media, for the radio segment, it has to pay license fees, which increases its costs. Also, in recent times the company has looked at acquisitions for its internet ventures, which has led to higher expenses.
On the bottomline front, HT Media reported losses in FY04. Its profits have grown by 51% CAGR over the last 3 years. JAGP's profit has jumped by 88% during the same period on account of higher margins and lower tax outgo. JAGP's average tax rate has been around 27%, while HT Media has a 31% effective tax rate. The management of HT Media has indicated that the same is expected to reduce going forward.
Ratios: While both the companies have a low debt to equity ratio, in terms of return ratios, JAGP gives higher returns. Higher profit margins and effective management has led to better performance by JAGP. HT Media's ventures in radio require more investment than JAGP's OOH and event management and this has been reflected in the profitability numbers.
Jagran Prakashan is trading at a premium as compared to HT Media. Both the companies have plans to continue expanding geographically to bolster growth in the long term. They are expanding their capacities and launching new offerings. Inorganic growth has also been on the radar for both the companies. However, in terms of execution, HT Media faces higher risk. The radio and the Internet venture will take a longer time to breakeven than JAGP's OOH and event management ventures.
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