3QFY2013 Result Update | Media February 4, 2013

Jagran Prakashan
Performance Highlights
Quarterly data (Standalone)
(` cr) Revenue EBITDA OPM (%) PAT
Source: Company, Angel Research

BUY
CMP Target Price
Investment Period
% yoy 7.8 7.4 (8)bp 59.5 2QFY13 322 78 24.3 69 %qoq 6.1 7.3 29bp (5.1)

`106 `125
12 Months

3QFY13 342 84 24.6 66

3QFY12 317 78 24.6 41

Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Media 3,338 296 0.5 118/78 34,965 2 19,751 5,987 JAGP.BO JAGP@IN

For 3QFY2013, Jagran Prakashan (JPL) reported a robust 59.5% yoy growth in net profit to `66cr aided by tax benefit (due to accumulated losses at Nai Dunia). JPLs gross margin expanded by 129bp yoy to 65.5% as newsprint prices stabilized and Indian currency fluctuation minimized. However, the OPM came in flat yoy at 24.6% due to forex loss of `5.5cr. Moderate top-line growth: For 3QFY2013, JPL reported a moderate top-line growth of 7.8% yoy to `342cr, in-line with our expectation of `344cr. In spite of the festive season, the company posted a modest 7.1% yoy growth in its advertising revenue to `239cr (due to high base effect). The increase in circulation and 5% hike in cover price led to 12.2% yoy growth in subscription revenue to `70cr. During the quarter, the companys non-publishing businesses comprising event, outdoor and digital media grew by 6.6% yoy to `33cr. Outlook and valuation: At the current market price, JPL is trading at 14.5x FY2014E consolidated EPS of `7.3. We maintain our Buy view on the stock with a revised target price of `125, based on 17x FY2014E EPS, valuing it at 10% premium to our Sensex target valuation multiple. Downside risks to our estimates include 1) sharp rise in newsprint prices, 2) higher-than-expected losses on account of increase in turnaround period for Nai Dunia/ Mid-day.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 59.7 14.2 12.9 13.2

Abs. (%) Sensex JAGP

3m 5.3 4.9

1yr 12.2 4.3

3yr 21.7 (18.3)

Key financials (Consolidated)

Y/E March (` cr) Net Sales % chg Net Profit % chg OPM (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010 942 14.4 176 92.0 30.0 5.6 19.0 5.2 30.0 30.0 3.6 12.0

FY2011 1,221 29.6 210 19.4 29.2 6.6 15.9 4.8 31.6 33.6 2.7 9.3

FY2012 1,356 11.0 178 (15.1) 21.9 5.6 18.7 4.4 24.5 18.6 2.7 12.5

FY2013E 1,511 11.5 204 14.1 23.2 6.4 16.4 4.1 25.9 16.7 2.4 10.5

FY2014E 1,698 12.4 231 13.4 23.4 7.3 14.5 3.6 26.6 18.8 2.1 9.0
Amit Patil 022-39357800 Ext: 6839 amit.patil@angelbroking.com

Please refer to important disclosures at the end of this report

Jagran Prakashan | 3QFY2013 Result Update

Exhibit 1: Quarterly performance (Standalone)

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM Interest Depreciation Other Income PBT (excl. Ext Items) Ext Income/(Expense) PBT (incl. Ext Items) (% of Sales) Provision for Taxation (% of PBT) Recurring PAT PATM Reported PAT Equity shares (cr) FDEPS (`) 3QFY13 3QFY12 % yoy 2QFY13 % qoq 9MFY13 9MFY12 % chg 342 118 34.5 43 12.6 97 28.3 258 84 24.6 8 17 6 66 66 19.3 0 0.0 66 19.3 66 32 2.1 317 113 35.8 41 12.8 85 26.7 239 78 24.6 4 17 3 60 60 18.9 19 31.2 41 13.0 41 32 1.3 59.5 59.5 59.5 9.8 9.8 74.2 0.4 7.9 7.4 14.1 6.2 7.8 3.9 322 111 34.4 44 13.8 89 27.5 244 78 24.3 6 16 13 69 69 21.6 0 0.0 69 21.6 69 32 2.2 (5.1) (5.1) (5.1) (5.1) (5.1) 31.2 2.9 5.7 7.3 9.0 (2.6) 6.1 6.3 981 342 35 129 13 270 27 740 241 24.5 21 47 19 191 191 19.5 0 0.0 191 19.5 191 32 6.0 934 320 34.3 117 12.6 250 26.7 687 247 26.4 10 111.3 48 196 196 21.0 59 (100.0) 30.3 137 14.6 137 32 4.3 39.7 39.7 39.7 (2.6) (0.1) (2.6) 7 172.0 7.7 (2.4) 7.9 9.4 5.1 7.0

Source: Company, Angel Research

Moderate top-line performance

JPL reported a moderate top-line growth of 7.8% yoy to `342cr, in-line with our expectation of `344cr. In spite of festival season, the company posted a modest 7.1% yoy growth in advertising revenue to `239cr (due to high base effect). The increase in circulation and 5% hike in cover price led to 12.2% yoy growth in subscription revenue to `70cr. During the quarter, the companys non-publishing businesses comprising event, outdoor and digital media grew by 6.6% yoy to `33cr.

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Exhibit 2: Top-line growth at 7.8%

400 350 300 250 (` cr) 200 150 100 279 276 298 305 317 303 318 322 50 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 342 5.0 16.6 12.4 10.3 25.0 13.7 10.1 6.6 5.5 7.8 30.0 25.0 20.0

Exhibit 3: Ad revenue growth at 7.1% yoy

300 250 200 (%) (` cr) 150 100 50 Ad-revenue 3Q12 4Q12 Circulation revenue 1Q13 2Q13 3Q13 Non-publishing business 62 63 64 67 70 31 30 26 29 33 239 224 221220 210

15.0 10.0

Top-line (LHS)

yoy (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Gross margin expands, however OPM remains flat yoy

JPLs gross margin expanded by 129bp yoy to 65.5% as newsprint prices stabilized and Indian currency fluctuation minimized. However, the OPM came in flat yoy at 24.6% due to forex loss of `5.5cr. The company has undertaken stringent cost control measures such as improving pagination efficiency, reducing wastage and improving ad-edit ratio, among others.

Exhibit 4: OPM contracts 162bp yoy

80 70 60 50 40 30 20 10 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 69 67 67 65 64 64 64 66 66

Exhibit 5: Robust net profit growth at 59.5% yoy

80 70 60 50 (` cr) 15.7 (17.5) (21.6) 32.5 1.8 12.1 51.7 59.5 70.0 60.0 50.0 40.0 30.0 20.0 10.0 (10.6) 53 42 50 46 41 43 56 69 66 (10.0) (20.0) (30.0) 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 (%)

(%)

30

23

25

26

25

19

25

40 30 20 10 -

24

25

OPM

Gross margins

PAT (LHS)

yoy growth (RHS)

Source: Company, Angel research

Source: Company, Angel research

Robust net profit growth yoy aided by tax benefit

For 3QFY2013, JPL reported a robust 59.5% yoy growth in net profit to `66cr aided by tax benefit (due to accumulated losses at Nai Dunia). During 9MFY2013, the losses in Nai Dunia and Mid-Day stood at `4.2cr and `3cr respectively. MidDay achieved EBIT breakeven during the 3QFY2013.

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Investment rationale
Healthy ad revenue FY2012. Unlike its advertising revenue of advertisements. 8-12% yoy. growth: JPLs ad revenue grew by ~10% to `938cr in peers, JPL continues to post good growth in national due to innovative terms of offerings and presentation For FY2013, we expect ad revenue to grow by

Recent acquisitions to fuel growth: JPL acquired the print business from Mid-Day Multimedia, which has presence in markets such as Mumbai, Delhi, Bangalore and Pune. It acquired Suvi Info Management, the publisher of Nai Dunia, which is present in markets such as Madhya Pradesh and Chhattisgarh. These acquisitions are likely to fill the gap in JPLs portfolio vs its peers HT Media (HT and Hindustan) and DB Corp (Dainik Bhaskar and DNA), which offer English and Hindi publications to their advertisers. With JPLs wider portfolio, we believe the company is well poised to benefit from the steady growth in the print media space.

Outlook and valuation

At the current market price, JPL is trading at 14.5x FY2014E consolidated EPS of `7.3. We maintain our Buy view on the stock with a revised target price of `125, based on 17x FY2014E EPS, valuing it at 10% premium to our Sensex target valuation multiple. Downside risks to our estimates include 1) sharp rise in newsprint prices, 2) higher-than-expected losses on account of increase in turnaround period for Nai Dunia/ Mid-day.

February 4, 2013

Jagran Prakashan | 3QFY20 Result U n n 013 Update

Exhibit 6: Peer valuation

Compa any HT Me edia JPL orp. DB Co Reco o Buy Buy Accum m Mcap (` cr) 2,416 3,338 4,387 CMP (`) 103 106 239 TP P (`) 121 125 266 Upside (%) 18 18 11 P/E (x) FY13E 14.0 16.4 20.2 FY1 14E 12.5 14.5 16.5 EV/Sales (x) FY13E 0.8 2.3 2.6 FY14E 0.7 2.0 2.3 RoE (%) FY13E 11.3 25.9 21.4 FY14E 11 1.4 26 6.6 22 2.4 CAG GR Sales 6.5 11.9 11.0 PAT 8.3 13.8 14.8

Source: Company, Ange Research el

Exhibit 7: Angel v consensu estimates vs. us s

Top lin (` cr) ne Angel estimates Consensus Diff (% %)
Source: Company, Ange Research el

FY2013E 1,511 1,558 (3.0)

FY2014 4E 1,69 98 1,72 20 (1.3 3)

EPS (`) E Angel estimates A s Consensus C Diff (%) D

FY201 13E 6.4 6.5 (1 1.0)

FY2 2014E 7.3 7.2 1.4

Exhibit 8: Return o JPL vs. Se of ensex

140% Sensex Jagra an

Exhib 9: One-y bit year forward P/E band d

18 80 16 60 Share Price (`)
14x 17x 1 20x x 23x

120%

14 40 12 20 10 00 80 8 60 6

100%

80%

60% Oct-10 Oct-11 Feb-11 Feb-12 Dec-10 Dec 10 Aug-11 A 11 Aug-10 Aug-12 Oct-12 Apr-11 Apr-12 Apr 10 Apr-10 Jun-10 Jun-11 Jun-12 Dec-11 Dec-12

Jun-11

Feb-11

Aug-11

Feb-12

Jun-12

Aug-12

Oct-10

Apr-11

Oct-11

Dec-10

Dec-11

Oct-12

Source: Company, Ange Research el

Source Company, An e: ngel Research

Company Backgrou y und

Dainik Jagr with AIR of ~16.4mn i the most re newspape in India published ran o is ead er by Jagran Prakashan (J JPL). The com mpany enjoy a leadership position in Uttar ys n he w. pany is Pradesh, th largest Hindi market for almost a decade now The comp present in t rapidly gr the rowing Hindi markets in Bi ihar, Delhi, Haryana, Jhar H rkhand, Punjab and Uttar Prades Apart from its comman d sh. m nding position in print med JPL n dia, is also pres sent in the inte ernet, OOH a event management bu and usinesses.

Februa 4, 2013 ary

Dec-12

Apr 12 Apr-12

Jagran Prakashan | 3QFY2013 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Total operating income % chg Total Expenditure Cost of Materials SG&A Expenses Personnel Others EBITDA % chg (% of Net Sales) Depreciation& Amortization EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Prior Period & Extra Exp/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings. of asso. Less: Minority interest (MI) PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg
previous year numbers

FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 823 823 823 9.8 667 341 93 107 126 157 (4.3) 19.0 38 118 (9.1) 14.4 6 23 16.8 135 (7) 135 44 32 92 92 92 (6.6) 11.1 3.0 2.9 (6.6) 942 942 942 14.4 660 296 99 121 144 282 80.1 30.0 51 232 95.6 24.6 7 34 13.2 259 92 259 83 32 176 176 176 92.0 18.7 5.8 5.6 92.0 1,221 1,221 1,221 29.6 865 359 134 173 199 356 26.3 29.2 65 291 25.7 23.8 9 26 8.4 308 19 2 306 98 32 208 208 210 19.5 17.2 6.6 6.6 19.4 1,356 1,356 1,356 11.0 1,059 461 164 194 240 296 (16.9) 21.9 71 225 (22.6) 16.6 16 46 18.0 256 (17) 256 77 30 178 178 178 (15.1) 13.2 5.6 5.6 (15.1) 1,511 1,511 1,511 11.5 1,160 487 192 217 264 351 18.5 23.2 101 250 11.1 16.6 26 25 10.0 250 (2) 250 46 18 204 204 204 14.1 13.5 6.4 6.4 14.1 1,698 1,698 1,698 12.4 1,301 532 222 243 304 397 13.1 23.4 111 286 14.3 16.8 27 23 8.2 282 13 282 51 18 231 231 231 13.4 13.6 7.3 7.3 13.4

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Other long term liablities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Long term loans and adv. Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Other non CA Total Assets
previous year numbers

FY2009 FY2010 60 500 560 141 52 60 552 612 121 58

FY2011 FY2012 63 639 702 174 62 6 63 689 752 8 643 70 6 9 1,488 1,217 351 865 66 248 137 666 100 63 504 368 298 11 1,488

FY2013E 63 755 819 613 78 13 1,523 1,259 452 807 76 228 148 716 105 71 539 314 402 11 1,523

FY2014E 63 856 919 540 78 13 1,551 1,306 563 743 78 238 165 809 123 81 605 329 480 11 1,551

753 480 151 328 71 157 360 83 87 190 162 198 753

792 564 194 369 25 167 417 85 98 235 186 231 792

944 730 257 473 52 200 134 519 35 55 429 303 217 3 944

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Cashflow Statement
Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Interest / Dividend (Net) Direct taxes paid Others Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Interest / Dividend (Net) Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances
previous year numbers

FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 135 38 (7) (2) 44 16 136 (111) 27 (84) 62 70 (2) (6) 46 37 83 259 51 (12) (9) 83 (21) 185 (38) (10) (48) (20) 123 (9) (135) 2 83 85 310 65 (37) (3) 98 (1) 238 (181) (29) (210) 53 128 (3) (73) (46) 85 35 256 71 (14) 0 77 (3) 233 (149) (79) (228) 185 129 (3) 59 65 35 100 250 101 (110) 8 46 4 205 (52) 20 (32) (30) 130 8 (167) 6 100 105 282 111 (61) 7 51 (1) 287 (50) (10) (60) (73) 130 7 (210) 17 105 123

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post-tax) Leverage (x) Operating ROE Returns (%) RoCE Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) Net Working capital (days) Solvency ratios (x) Net Debt to equity Net Debt to EBITDA Interest Coverage
previous year numbers

FY2009 FY2010 FY2011 FY2012 36.4 24.5 5.7 1.9 4.1 21.7 4.5 3.0 2.9 4.3 2.0 18.6 14.4 0.7 1.7 16.6 0.0 (0.2) 13.0 16.6 24.5 16.7 1.7 14 70 39 51 (0.2) (0.6) 20.1 19.0 14.0 5.2 3.3 3.6 12.0 4.3 5.8 5.6 7.5 3.5 20.3 24.6 0.7 1.8 29.8 0.0 -0.2 24.0 30.0 43.9 30.0 1.7 21 70 50 57 -0.2 -0.5 35.3 15.9 12.2 4.8 3.3 2.7 9.3 3.5 6.6 6.6 8.6 3.5 22.2 23.8 0.7 2.0 32.0 0.0 -0.1 27.2 33.6 46.8 31.6 1.7 19 69 52 52 -0.1 -0.2 32.1 18.7 13.4 4.4 3.3 2.7 12.5 2.5 5.6 5.6 7.9 3.5 23.8 16.6 0.7 1.5 17.1 0.0 0.2 19.8 18.6 24.6 24.5 1.1 21 78 64 51 0.4 1.0 14.3

FY2013E 16.4 11.0 4.1 3.3 2.4 10.5 2.4 6.4 6.4 9.6 3.5 25.9 16.6 0.8 1.3 17.7 0.0 0.4 24.2 16.7 21.7 25.9 1.2 21 73 44 68 0.3 0.8 9.7

FY2014E 14.5 9.8 3.6 3.3 2.1 9.0 2.3 7.3 7.3 10.8 3.5 29.1 16.8 0.8 1.4 19.9 0.0 0.3 25.2 18.8 24.3 26.6 1.3 21 73 42 74 0.2 0.5 10.6

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

February 4, 2013

Jagran Prakashan | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Jagran No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 4, 2013

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