Jagran Prakashan: Q4FY14 Result Analysis

Jagran Prakashan has posted operating revenue of Rs 391.51 crore in Q4FY14 against Rs 342.85 crore during Q4FY13. The company generates most part of its revenue from advertisement and circulation. The income from advertisement was up by 16.31% on yearly basis to stand at Rs 264.74 crore during the last quarter of FY14. Whereas the revenue from circulation was up by almost 13% to Rs 86 crore for the quarter ended 31 March, 2014 as compared to the corresponding quarter of previous year.

The EBITDA of the company during Q4FY14 stood at around Rs 80 crore, reporting a jump of 47% on yearly basis. While the EBITDA margin stood at 20.34%, showing a rise of by 455 basis points on yearly basis for the quarter ended 31 March, 2014. On yearly basis, the increase in gain from foreign exchange fluctuation and reduction in employees cost and other expenses helped the company to post growth in margin for the quarter ended 31 March, 2014.

Other income of the company came in at Rs 34.16 crore and income from the exceptional items went up to Rs 25.54 crore (on net basis). This helped the company to post a net profit of Rs 58.14 crore during Q4FY14 as compared to the same quarter of previous year. The interest and tax expenses of the company stood at Rs 9.47 crore (up by 44.8% on yearly basis) and Rs 26.51 crore respectively during Q4FY14 as compared to the same quarter of previous year. The net profit margin during Q4FY14 rose by 360 basis points to 14.85% as compared to the corresponding quarter of previous year.

On sequential basis, the performance of the company was quite disappointing. The topline and the bottomline of the company plunged by more than 8% and 15% respectively in Q4FY14 as compared to Q3FY14. While on the margin front, the EBITDA margin and net profit margin plunged by 515 basis points and 119 basis points respectively.

Commenting on the financial performance of the company, M.M Gupta, CMD, Jagran Prakashan, said, “In continuation of Q3FY14, Q4FY14 once again witnessed a steep growth of 17% in advertisement revenue with further improvement in per copy realisation. On cost front, we continued to keep check. However, increase in newsprint prices partially due to depreciating rupee was unexpected and it lowered the operating margins by 3%. I expect the prices to remain stable at current level.”

At current market price (CMP) of Rs 115, the company recommended a total dividend of Rs 4 per share for the fiscal year 2014 at a dividend yield of 3.5%. The stock discounts its TTM earnings by 15.8x. The scrip of the company opened at Rs 116.6 and closed at Rs 115.1 on BSE today, up by 0.09% from its previous close.