Motilal Oswal is bullish on Jagran Prakashan has recommended buy rating on the stock with a target price of Rs 156 in its research report dated 02 Aug 2018.
Motilal Oswal's research report on Jagran Prakashan
revenue grew 2% YoY (+10% QoQ) to INR6b (in-line), driven by radio and other operating revenue; print business revenue was flat YoY. Newsprint prices increased 10% YoY; however, a 4-5% decline in circulation copies and the use of old (low-priced) inventory restricted the rise in newsprint cost to a meager 3% YoY (+10% QoQ). EBITDA, thus, grew 1% YoY (+36% QoQ) to INR1.6b (in-line), with the margin down 15bp YoY to 27.1%. PAT declined 1% YoY (+45% QoQ) to INR854m (in-line) due to lower other income.
Outlook
However, we believe that a revival in ad spends, coupled with strong growth from the radio business, bodes well for JAGP. At CMP, the stock trades at a P/E of 10x/8x FY19/20; ex-Music Broadcast earnings, the stock is trading at an attractive P/E of 7x on FY20 EPS. Maintain Buy.
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