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ANSec
Amit Nalin Securities Pvt. Ltd.
Newspaper Publishershigh margins, low capital requirement……
Amit Nalin Securities Pvt. Ltd.
ANSec• During the pre-Independence times, Indian New paper Industry learned to act like a
player in the major league political and socio-economic arena, despite its well-known limitations in terms of reach in society, financial viability, professional training, and entrepreneurial and management capabilities. The First Press Commission noted that in 1953 the circulation of dailies per 1000 in the population was 5.4 against the backdrop of an all-India literacy level of 16.4 per cent. From such a low base, India’s daily newspaper circulation climbed slowly to 3.15 million in 1957 and 5.11 million in 1962. It took the press three decades of Independence to cross the 10 million mark and in a manner of speaking, join the ranks of the `mass media.’
• It took 32 years of Independence for the total circulation of Hindi daily newspapers finally to overtake the total circulation of English language newspapers in India. Today due to growing literacy and new technology India is emerging as the second largest newspaper market in the world, according to latest research by the World Association of Newspapers (WAN).
• The new figures show that the four largest markets for newspapers are: China, with 107 million copies sold daily; India, with 99 million copies daily; Japan, with 68 million copies daily; and the United States, with nearly 51 million.
• Indian newspaper sales increased 11.2% in 2007 and 35.51% in the five year period. Newspaper advertising revenues in India have been up by 64.8% over the previous 5 years.
Newspaper Industry In India
Amit Nalin Securities Pvt. Ltd.
ANSec
New Indian Express
6%
Mid-Day5%
Mumbai Mirror
5% DNA4%
Economic Times
6% Hindu16%
Hindustan Times18%
Times of India40%
The top English dailies (Total readers 342 lakhs)
The top 10 English dailies see The Times of India lead the chart with a total readership of 13.6mn for all its editions put together. The Hindustan Times follows with a readership of 6.3mn. The Hindu with a total readership of 5.6mn is at No. 3. The Economic Times is the only financial daily to have made it to the top English dailies list with a total readership figure of 2mn. It shares the fourth position with The New Indian Express, which too has a total readership figure of 2mn. Mid-Day follows at No 6 with a readership of 1.8mn, Mumbai Mirror at No. 7 with a readership of 1.6mn, and DNA at No. 8 with a total readership of 1.3mn.
Amit Nalin Securities Pvt. Ltd.
ANSec
Dainik Jagran30%
Dainik Bhaskar
17%Amar Ujala
16%
Hindustan14%
Rajasthan Patrika
7%
Punjab Kesari6%
Prabhat Khabar
3%
Navabharat 3%
Aj4%
The top 10 Hindi dailies see Dainik Jagran topping the charts with a total readership of 56.6mn. Dainik Bhaskar follows with a total readership of 31.9mn. Amar Ujala is at No. 3 with a total readership of 29.6mn; Hindustan is on the fourth spot with a total readership of 25.2mn, and Rajasthan Patrika is at No. 5 with a total readership of 13.7mn. Punjab Kesari, with a total readership of 11.1mn, is in the sixth position, followed by Aj at No. 7 with a total readership of 7.4mn. Navbharat Times shares the eighth position with Navabharat (Maharashtra/Chennai), both having a total readership of 5.2mn. Prabhat Khabar is at No. 10 with a total readership of 5mn.
The top Hindi dailies(Total readers 1857 lakhs)
Amit Nalin Securities Pvt. Ltd.
ANSecRelative Valuation & Investment CaseNewspaper readership is still growing in India and is a part of the daily culture of this vast population. It is clear that the demographics points to higher literacy and larger disposable income in the hands of the rural and middle India.Regional and vernacular newspapers have only recently improved their quality of publishing attracting a larger interest amongst readers.In these uncertain times Newspaper publishing offers consistent and profitable growth. Advertising reach of newspapers for many products still remains the preferred choice media.Amongst the three companies listed in the printed newspaper space (all covered in this presentation) it is observed that Jagran Prakashan has developed their business with the most prudent can conservative growth strategy. Radio and/or Internet investments have not been aggressively pursued by Jagran. Thus, the ROCE and ROE performance remains the highest in Jagran.Further, costs and efficiencies again make Jagran the investment choice.
Amit Nalin Securities Pvt. Ltd.
ANSecComparative AnalysisROE(%)
11.41
21.38
9.65
14.91
19.9618.21
12.33 11.8
25.22
4
10
16
22
28
34
Jagran Prakashan Deccan Chronicle HT MediaFY06 FY07 FY08
Capital Employed (Rs. Cr)
865.77907.5
603.23
929.97
1558.23
617.83
2108.82
1076
617.82
300
600
900
1200
1500
1800
2100
2400
Jagran Prakashan Deccan Chronicle HT MediaFY06 FY07 FY08
Net Profit Margin (%)
5.98
20.29
6.69.06
28.22
12.74
33.92
8.513.09
05
10152025303540
Jagran Prakashan Deccan Chronicle HT MediaFY06 FY07 FY08
7
ANSec
Amit Nalin Securities Pvt. Ltd.
Jagran Prakashan Ltd.
CMP: Rs 49.20 Fair Value: Rs 86 Rated: Buy
Amit Nalin Securities Pvt. Ltd.
ANSecEquity Data
60
80
100
120
140
160
DEC '07 MAR '08 JUNE '08 SEPT '0813500
14300
15100
15900
16700
17500Jagran PrakashanSensex
BSE Code : 532705
NSE Code : JAGRAN
Reuters : JAGP.BO
Bloomberg : JAGP IN
NSE Vol. : 15912
BSE Vol. : 15912
CMP : 49.20
Equity : 60.24
BV : 18.94
Market Cap : 1704.79
52 Week H/L : 169/52.60
Sensex Beta : 0.3766
Foreign4%
Public & Others
10% Institutions
13%
Non Promoter Corporate
Holding22%
Promoters51%
Share Holding Pattern
Amit Nalin Securities Pvt. Ltd.
ANSecCompany OverviewJagran Prakashan Limited (JPL), has been in the newspaper publishing business since 1975. The Company is engaged in printing and publishing of newspapers, magazines, journals and media related businesses.
BRAND PORTFOLIO
Amit Nalin Securities Pvt. Ltd.
ANSecBusiness SegmentsJagran
Prakashan
InternetJagran.com(co-branded with Yahoo)
Jagran Engage (OOH)
(Covers 900+ towns spread across
370 districts in 27 states)
Jagran Solution(Provides marketing
solutions)
J9(SMS Service)
i-next (Readership 2.75 lakhs)
Dainik Jagran(Readership
56.6 mn)
City Plus(Readership 1.72 lakhs)
Magazines(Sakhi &
Jagran Varshiki)
Amit Nalin Securities Pvt. Ltd.
ANSec1. Dainik JagranDainik Jagran is a brand that is the choice of millions of Indians as they start their day. With a readership of 56.6 mn, it has been the largest read daily of India for the last consecutive 10 rounds of the Indian Readership Survey (IRS). With 37 editions, Dainik Jagran covers 11 states of India. It has been declared by the World Association of Newspapers (WAN) as the largest read daily in the world. Dainik Jagran has also been voted as the most credible source of News in a BBC Reuters survey.
2. i-nexti-next, is India’s fastest growing compact daily in bilingual format, it has caught the pulse of the young heart. It has captured the imagination of people who look out for newer opportunities and seek deeper probes into the more relevant issues of changing India of today. It now covers 9 prominent cities in 4 states of India through its various editions and infrastructure.
3. City PlusCity Plus is the weekly English tabloid from the group. It is an English-News Information-Entertainment paper with 11 editions targeting the geographic communities within a city. It also covers a variety of topics from Food, Fashion, Lifestyle, etc. Apart from this, it also has reader interactivity through Contests, Coupons, Puzzles, Quiz, Crossword, Games, Polls, Suggestions.
4. SakhiSakhi is a premium women’s magazine targeted at upwardly mobile & outgoing women in the upper segment of the socio-economic class. The magazine highlights the role of women in modern times.
PRINT MEDIA
Amit Nalin Securities Pvt. Ltd.
ANSec1. Jagran Engage
Jagran Engage is the OOH division of JPL which specializes in Out of Home media solutions across India. Jagran Engage covers 900+ towns spread across 370 districts in 27 states. It provide solution to prospects & customers through its bouquet of offerings of Hordings & Billboards, Unique Street Furniture, Transit & Mobile Media besides innovative & ambient to suit specific client requirements.
2. J 9J9 is the value added services division of Jagran Prakashan Ltd. which is working in the field of mobile value added services & home shopping in an active manner. It has made a foray into digital business with an initiative in Short Code Messaging Service (SMS)
3. jagran.comThe group foray into the internet space has been through “jagran.com” which is the largest Hindi portal its category. The companies has entered into a strategic alliance with Yahoo India and have launched a co-branded website with a motive to reshape the online Hindi news and current affairs landscape, in terms of compelling customer experience and user engagement.
OTHER MEDIA
Amit Nalin Securities Pvt. Ltd.
ANSec1. Jagran International
Jagran International is the international division of JPL responsible for marketing JPL products outside of India.
2. Jagran Pehel (Corporate Social Responsibility)JPL supports a specifically dedicated organization, Pehel to discharge its social responsibilities and provide social services by organizing workshops/seminars to voice different social issues, health camps/road shows for creating awareness on the social concerns and helping unprivileged masses.
3. Jagran Research Centre (JRC)Jagran Research Centre is an independent multidisciplinary research & consulting organization. JRC has undertaken various projects like accruing vital market data, organizing strategic planning process for improving customer satisfaction and enhancing competitive advantage.
4. Jagran SolutionJagran Solutions is the division that leads work below the Line Marketing Solutions or Experiential Marketing area. Jagran Solutions specializes in providing versatile, complete and measurable solutions by ensuring an immersive, interactive and experiential integrated marketing plan applicable to activations, corporate events, conventions, product launches, meetings, conferences, exhibitions and contests.
OTHER
Amit Nalin Securities Pvt. Ltd.
ANSecHighlights of the Year 2007-08
The operating revenue, operating profit and net profits grew by 25.32%, 36.68% and 28.74% respectively. Return on Equity improved from 14.91% to 18.21%, a growth of 22.13%.Advertisement revenue grew by 28.48% and growth in circulation (no. of copies sold) was 9.22%, which helped company strengthen its position vis-a-vis its competitors in the states of Bihar, Jharkhand and Haryana.Capex of Rs.86.82 crores was incurred to enhance the printing and publishing capabilities and to modernise certain processes. I-Next and City Plus launched during the previous year were expanded to other markets and I-Next became No.2 newspaper after Dainik Jagran in couple of markets in a short span of time. Six more editions of Dainik Jagran viz. Ayodhya, Raibareilly and Mathura in Uttar Pradesh, Haridwar in Uttarakhand and Patiala and Bhatinda in Punjab were launched during the year.It has entered into a joint venture with Television Eighteen India Limited to launch a business paper in Hindi and other Indian languages across the country. Jagran Solution, an Event Management arm of the company has won two awards at Promotion Marketing Awards of Asia (PMAA) for Promotion Marketing excellence. J9 has progressed satisfactorily during the year and revenues registered a growth of 354.53% over previous year.
Amit Nalin Securities Pvt. Ltd.
ANSecConcerns
• Inflation: Newsprint forms the major raw material for the business and represents a significant portion of companies expenses. For the years ended 31st March 2008 and 31st March 2007, newsprint costs represented 32.51% and 35.07% of the total income respectively. The price of newsprint has seen an upward trend since Jan 2008.
• Ad Revenue remains a main source of income:Ad-spend by customers depends on the newspaper’s ability to attract new customers which in turn depends on circulation, readership of newspapers. The preference of advertising for one media over another depends on products and demographics. National advertising, the geographical reach of newspapers is a major criteria for advertisers in selecting their news media. A slowdown in the economy will have an adverse impact on budgets of the advertisers which could adversely affect results.
Scrap and waste paper
1%
Revenue from other operating
activity8%
Ad Revenue
67%
Newspaper24%
Amit Nalin Securities Pvt. Ltd.
ANSec• Fall in circulation and readership: Circulation and readership significantly
influence ad-spend by the advertisers and companies advertising rates. Circulation and readership are dependant on the quality of the newspapers, the reach of newspapers and the loyalty of the readers towards the newspapers. Any failure by the company to meet the readers’ preferences and quality standards could adversely affect circulation and readership. Circulation in the Indian market is also affected by price and therefore the circulation of the newspapers may be adversely effected if company fail to meet any price competition.
• Competition: The Indian newspaper industry in general and Hindi newspaper industry in particular have become intensely competitive. In every markets, company is facing competition from other newspapers for circulation, readership and advertising. In addition, company also face competition from other forms of media, such as, television, radio and internet.
Amit Nalin Securities Pvt. Ltd.
ANSecIncome Statement (Rs. in Cr.)
FY07 FY08 FY09E FY10E FY11E
Net Sales 598.18 749.63 844.54 945.89 1049.94
Other Income 27.82 21.52 15.73 22.13 26.55
Total Income 625.97 771.20 860.27 968.01 1076.49
Total Expenditure 478.59 585.88 640.15 716.96 797.00
PBIDT 147.38 185.32 220.12 251.05 279.49
Interest 8.50 5.98 7.11 9.95 10.85
PBDT 138.88 179.34 213.01 241.10 268.64
Depreciation 23.72 33.59 38.96 49.59 54.74
Profit Before Tax 115.16 145.75 174.04 191.51 213.90
Tax 38.94 47.62 63.81 59.37 65.44
Reported Net Profit 76.22 98.13 110.24 132.14 148.46
Amit Nalin Securities Pvt. Ltd.
ANSecBalance Sheet (Rs. In Cr.)
FY07 FY08 FY09E FY10E FY11E
Sources of Funds:
Share Capital 60.23 60.23 60.23 60.23 60.23
Reserves 450.87 478.52 513.46 555.24 598.28
Total Shareholders Funds 511.10 538.75 573.69 615.47 658.51
Total Debt 106.73 79.07 94.07 109.66 119.53
Total Liabilities 617.83 617.82 667.76 725.13 778.05
Application of Funds:
Net Block 175.58 203.67 259.21 286.12 299.08
Capital Work in Progress 50.57 47.85 34.50 24.32 23.50
Investments 144.59 183.31 167.18 189.46 196.34
Net Current Assets 246.89 182.85 206.88 225.23 259.13
Total Assets 617.83 617.82 667.76 725.13 778.05
Amit Nalin Securities Pvt. Ltd.
ANSecRatio EvaluationFY07 FY08 FY09E FY10E FY11E
Liquidity Ratio'sDebt-Equity Ratio 0.21 0.15 0.16 0.18 0.18
Current Ratio 3.33 1.91 2.00 1.95 1.95
Turnover Ratio'sFixed Assets Ratio 3.41 3.68 3.26 3.31 3.51
Inventory 16.69 17.36 17.33 17.28 17.23
Debtors 5.49 5.50 5.01 5.00 4.98
Investment Ratio'sAdj. EPS 2.53 3.26 3.66 4.39 4.93
ROE(%) 14.91 18.21 19.22 21.47 22.55
ROCE(%) 20.02 24.56 27.13 27.78 28.89
20
ANSec
Amit Nalin Securities Pvt. Ltd.
DECCAN CHRONICLE
CMP: Rs 45 Rated: BuyFair Value: Rs 110
Amit Nalin Securities Pvt. Ltd.
ANSecEquity Data
Foreign
19%
Institutions
13%
Non Promoter Corporate
Holding
Promoters
61%
Public & Others
3%
BSE Code : 532608
NSE Code : DCHL
Reuters : DCHL.BO
Bloomberg : DECH IN
NSE Vol. : 263995
BSE Vol. : 91875
CMP : 42.85
Equity : 48.98
BV : 46.06
Market Cap : 1299.19
Week H/L : 270.10/51
Sensex Beta : 0.7810 90110130150170190210230250
DEC '07 MAR '08 JUNE '08 SEPT '0813500
14300
15100
15900
16700
17500Deccan ChronicleSensex
Share Holding Pattern
Amit Nalin Securities Pvt. Ltd.
ANSecCompany Overview• Deccan Chronicle, the flagship newspaper of the company, is the leading English
daily in Hyderabad and Andhra Pradesh. It is the fourth largest circulated and read English daily in India. The company was initially formed as a partnership firm in 1938, which published the English weekly Deccan Chronicle, and in 1947 it published daily. They also publish Andhra Bhoomi in Telugu, which are daily, weekly, and monthly magazines. The newspaper takes its name from its place of origination, the Deccan region of India.
• During the year 2006-07, the company promoted a 100% subsidiary under the name of Sieger Solutions Ltd with an investment of Rs.2511 lakhs for the business of buying and selling advertisement space and to explore alternate media space.
• The Chennai Chronicle that has recently initiated an alliance with Sulekha.com titled `Blogprint' creates a platform for local bloggers to be printed in the paper.
• During June 2008, the newspaper of the company had formed a business news partnership with the International Herald Tribune. The IHT would publish a branded business section in the Deccan Chronicle.
• DECCAN Chronicle acquired the South-based retail chain, Odyssey India Ltd(Odyssey) for Rs 61.2 crores, in a cash deal. Odyssey is a one of the fastest growing leisure retail chain which sells books, music, toys, greeting cards and FMCG products of leading domestic and international brands.
Amit Nalin Securities Pvt. Ltd.
ANSecHighlights of FY08 Results
Deccan Chronicle (DCHL) has reported consolidated revenues of Rs8.95bn, EBITDA of Rs5.5bn and PAT of Rs 3bn in FY08.The growth was driven by 45% growth in advertising revenues and Rs720mn contributed by Sieger Solution (the internet business). Subscription revenues grew by 8% at Rs 440mn.DCHL during the year marked its entry into Bangalore. It has also launched its financial newspaper – Financial Chronicle in the markets of Mumbai, Bangalore, Hyderabad and Chennai. EBITDA margins during the year have expanded from 46.7% in FY07 to 61.2% in FY08 on the back of rapidly growing advertising revenues and lower marketing spends.DCHL has securitized Rs 2bn of its receivables with ICICI taking a one time head cut of Rs250mn. This helps in bringing down DCHL’s receivables days to 90 days.DCHL’s internet business – Sieger Solutions has entered into agreement with New York Times to give back end support and manage NYT’s web business. Management believes that this would add Rs1.5bn of incremental revenues.DCHL owns Hyderabad team in IPL (at USD107mn). As per the management, they have clocked in revenues of Rs1.07bn and incurred expenses to the tune of Rs 880mn (will be included in financials of FY09).DCHL has posted 44% ad revenue growth in FY08, led by increase in card rates. The company has increased card rates by a further 30% in 1QFY09, which would be the key driver for 14% CAGR in ad revenue growth over FY08-10. Company estimate Bangalore edition ad revenue contribution at Rs260mn in FY09 and Rs530m in FY10.
Amit Nalin Securities Pvt. Ltd.
ANSecDCHL reported 15% decline in newsprint cost due to lower international newsprint prices and stronger rupee in FY08. However, it has reported margin pressure in 1QFY09 due to rupee depreciation and sharp increase in newsprint prices. Management expects newsprint prices to soften post 3QFY09.DCHL has posted a sharp decline in debtor days from 201 in FY07 to 114 in FY08. Debtors have declined to Rs2.4bn in FY08 from Rs4bn in FY07 due to securitization of receivables (Rs1.65bn) and change in business strategy (allowing only 90-100 days of credit). Management has indicated that debtor days of 90-100 would be maintained, going forward, allaying concerns regarding high debtors.Odyssey currently has 50,000 sqft of retail space in 12 locations out of six cities (Chennai, Hyderabad, Trichy, Coimbatore and Salem in South and Varanasi in North) with daily footfall of 5400 customers. Odessey will add another 100,000 sqft in northern India (Delhi, Lucknow, Nodia, Chandigarh, Ludhiana, Jaipur and Ahemdabad).Company is expecting a revenue of Rs 150 crores from Odyssey for FY09.
Amit Nalin Securities Pvt. Ltd.
ANSecConcerns
• Uncharged IPL: Known as the Deccan Chargers, the Hyderabad team owned by DCHL showed a poor performance only to get last place in the league though it was considered as the best team on paper. In the current season they have reported a net loss of approximately Rs. 20 Crores.
• Foray into Bangalore: DCHL has finally forayed into Bangalore after its announcement which was made way back in FY07. Bangalore will be a tough market to crack and DCHL will find it difficult to recreate its magic in Bangalore as it did in Chennai with the biggies like Times of India who has 45% of the market (and has already fenced its margins with launch of Bangalore Mirror) and Deccan Herald which has 30% of the market share in Bangalore.
• Launch of TOI in Chennai: Times of India (TOI) has entered the Chennai market with a very attractive offer which will affect the DCHL edge of low pricing. With the entry of TOI in Chennai, not only will the circulation get affected but with the attractive offering given by TOI, it will lead to a price war too.
• Price of Newsprint: DCHL imports 98% of its newsprint raw material. The international prices for raw material has increased in 2008 and are expected to further rise. Moreover the strengthening of dollar has added woes to the price of newsprint. This hike in price of the key raw material will only add to the pressure on its margins.
• Fund Raising much ahead of Capex: DCHL has also announced a buy back offer for 4% of its equity at Rs. 250 per share which will require Rs. 2.5bn.
Amit Nalin Securities Pvt. Ltd.
ANSecIncome Statement (Rs. in Cr.)
FY07 FY08 FY09E FY10E FY11E
Net Sales 587.59 894.77 974.77 1043.00 1116.01
Other Income 34.44 39.57 40.75 41.11 42.76
Total Income 622.03 934.34 1015.52 1084.12 1158.77
Total Expenditure 321.84 347.28 510.15 474.83 515.64
PBIDT 300.19 587.06 505.37 609.29 643.14
Interest 36.14 88.62 88.80 89.86 90.76
PBDT 264.05 498.44 416.58 519.42 552.38
Depreciation 16.80 30.00 31.20 35.13 38.04
Profit Before Tax 247.25 468.44 385.37 484.30 514.34
Tax 81.99 164.78 130.51 166.53 173.71
Reported Profit 165.80 303.52 254.87 317.76 340.62
Amit Nalin Securities Pvt. Ltd.
ANSecBalance Sheet (Rs. In Cr.)
FY07 FY08 FY09E FY10E FY11ESources of funds:Share CapitalEquity Capital 47.81 48.98 48.98 48.98 48.98
Preference Capital 0.00 101.40 101.40 101.40 101.40
Reserves 782.83 1052.89 1196.85 1348.25 1439.32
Total Shareholders Funds 830.64 1203.27 1347.23 1498.63 1589.70
Total Debt 726.62 903.86 905.67 916.54 925.70
Total Liabilities 1558.23 2108.82 2252.89 2415.16 2515.40Application of Funds:Net Block 627.17 640.68 721.24 781.03 842.86
Capital Work in Progress 12.46 58.72 90.24 130.52 142.44
Investments 23.14 23.14 27.69 78.21 82.68
Net Current Assets 874.94 1364.28 1413.72 1425.40 1447.42
Total Assets 1558.23 2108.82 2252.89 2415.16 2515.40
Amit Nalin Securities Pvt. Ltd.
ANSecRatio EvaluationFY07 FY08 FY09E FY10E FY11E
Liquidity Ratio'sDebt-Equity Ratio 0.87 0.75 0.65 0.60 0.57
Current Ratio 17.77 8.75 5.41 4.49 3.85
Turnover Ratio'sFixed Assets Ratio 0.94 1.40 1.35 1.33 1.32
Inventory 6.48 5.72 6.87 6.84 6.94
Debtors 2.12 2.68 3.76 3.73 3.73
Investment Ratio'sAdj. EPS 6.94 12.39 12.16 12.86 13.79
ROE(%) 19.96 25.22 21.41 20.47 20.76
ROCE(%) 18.19 26.42 23.47 23.22 23.54
29
ANSec
Amit Nalin Securities Pvt. Ltd.
HT MEDIA LTD.
CMP: Rs 62.60
Amit Nalin Securities Pvt. Ltd.
ANSecEquity Data
85
135
185
235
285
DEC '07 MAR '08 JUNE '08 SEPT '08135001430015100159001670017500HT Media
Sensex
BSE Code : 532662
NSE Code : HTMEDIA
Reuters : HTML.BO
Bloomberg : HTML IN
NSE Vol. : 10405
BSE Vol. : 3463
CMP : 74.90
Equity : 46.85
BV : 40.70
Market Cap : 1827.15
52 Week H/L : 266/73
Sensex Beta : 0.5841
Foreign18%
Institutions10%
Promoters69%
Public & Others
3%
Share Holding Pattern
Amit Nalin Securities Pvt. Ltd.
ANSecCompany Overview• Hindustan Times was started by the Birla’s in 1924 and inaugurated by none other
than the father of our nation, Mahatma Gandhi. The company was renamed HT Media in the year 2002. HT Media has today grown to become one of India's largest media companies.
• Hindustan Times (English) and Hindustan (Hindi), have a combined daily circulation of 2.25 million copies and a readership base of 31.5 million readers to their credit. Both dailies enjoy a strong brand recognition among readers as well as advertisers.
• To cater to the large readership base, HT Media operates 19 printing facilities across India with an installed capacity of 1.5 million copies per hour.
• In addition to Hindustan Times and Hindustan, HT Media also publishes a national business newspaper, Mint. Mint is a one of its newspaper for which the company has an exclusive agreement with the Wall Street Journal to publish Journal-branded news and information in India. Mint is today the second-largest business newspaper in India with presence in the key markets of Delhi, Mumbai and Bangalore.
• HT Media, through its subsidiary HT Music and Entertainment Company Ltd., has made its foray into electronic media. Diversifying its ambit of operations, the company in a consulting partnership with Virgin Radio, has launched the FM radio channel -Fever 104.
• Internet businesses of HT Media, incorporated under Firefly e-ventures, operate leading web portals Hindustantimes.com and livemint.com in the general and business news categories respectively. The company has recently launched Shine.com, a job portal which has received high appreciation from consumers and industry for its innovative design and usability.
Amit Nalin Securities Pvt. Ltd.
ANSecBusiness Segments
Events And
Marketing Solutions
HT Media
English (Readership
63 lakhs)Hindi
Internet(Shine.com &
DesiMartini.com)
Strategic Partnership
Radio(Fever 104 FM)
Mint Hindustan Times
Magazines(Nandan &kadambini)
Hindustan(Readership 252 lakhs)
Amit Nalin Securities Pvt. Ltd.
ANSec1. EnglishBeing in the mainline daily or business news, HT Media dominates the English print space. Hindustan Times emerges as a natural choice for 6.3 million readers across India be it mega cities like Delhi, Mumbai, Kolkata, or smaller metros like Chandigarh, Patna, Bhopal, Ranchi, Lucknow and Jaipur.
2. HindiA part of HT Media Ltd, the group's Hindi newspaper Hindustan ranks as the third largest read daily in the country. Hindustan has 13 editions across the Hindi belt. They are spread across Delhi, Bihar (Patna, Muzaffarpur and Bhagalpur), Jharkhand (Ranchi, Jamshedpur and Dhanbad), Uttar Pradesh (Lucknow, Varanasi, Meerut, Agra and Kanpur) and Chandigarh.
PRINT MEDIA
1. InternetFirefly e-Ventures Ltd., a 100% HT Media subsidiary, focuses on creating and building brands and businesses in the Internet media space. Firefly aims to combine HT Media’s 84-year old legacy as one of India’s largest and most respected names in the media industry, with the innovation and energy that characterize the Internet space.
2. RadioHT Music and Entertainment Co. Limited is a subsidiary of HT Media Limited that owns the private FM brand Fever 104 FM. HT Music and Entertainment Company Ltd was formed in technical collaboration with the Virgin group. The company entered the private FM radio market in the four main cities of Delhi, Mumbai, Bangalore and Kolkata with the brand Fever 104 FM.
ENTERAINMENT AND OTHER MEDIA
Amit Nalin Securities Pvt. Ltd.
ANSec1. Strategic Partnership
Strategic Partnerships’ is a new division started by HT Media at the start of the year 2008. This division identifies growth companies and enters into strategic partnerships with them. The motive is to cater to the advertising needs of growth companies by providing them a cashless form of advertising and building up their brands, thereby enhancing the value of the business.
2. Events and Marketing SolutionsThe two divisions have been created to offer clients alternate ways of standing out from the clutter to build meaningful salience for their brands.The primary focus of HT Events is to create IPRs that will grow in size and scale over time - a primary example being the Hindustan Times Leadership Summit. In a short time, HT Events has mounted some large scale events like HT City Delhi Shopping Fest, Fever 104 A. R. Rahman Concert, Miss India Worldwide, HT Polo, HT I Love Delhi and Mint HT Luxury Conference.HT Marketing Solutions has been formed to offer holistic solutions to clients aiming for a complete and effective connect with the target consumers. HT Marketing Solutions builds a powerful and appropriate idea for a brand after which mass media, activation and PR are used to provide an impactful implementation of the core idea.
OTHER SERVICES
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ANSecHighlights of the Year
Strong growth in ad revenues: A combination of higher advertising rates and expansion into new geographies saw a healthy 19% improvement in ad revenues for the quarter under review. ‘Hindustan’ launched in Dehradun and Chandigarh: Hindustan started a printing location in Dehradun, in May 2008 that will reach cities including Dehradun, Rishikesh, Haridwar, Roorkee and Saharanpur. In Q1 FY09, ‘Hindustan’ attained the No. 1 position in Lucknow and Jharkhand. Going forward, the Company will continue to expand into new geographies given the long term opportunity in the Hindi segment.Launch of Corporate Website: In June 2008 the Company launched its corporate website “htmedia.in”. The website is based on Web 2.0 technology and incorporates some of the most innovative technological features and is considered one of the best-designed corporate websites.Marketing Spend: This quarter there was an aggressive spend in advertising in television media promotion and high visibility campaign of Hindustan. Hoardings, billboards, and other print mediums of advertising were also used to promote the relaunch of HT City. The supplement has been reintroduced with a completely new and youthful style and structure.
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ANSecJV with Hubert Burda: HT Media has joined hands with German media group Hubert Burda to tap growing media platforms in Asian countries. The 51:49 joint venture (JV) leverages HT Media's expertise in printing and publishing and Burda's global multimedia operation. It would also enable the Company to bring global best practices and technology to the printing side of our business among other areas and capture opportunities in the booming high-end magazine and catalogue printing space in India and the Asia-Pacific region.
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ANSecFuture Outlook
• The Company plans to enhance and upgrade its printing capacity across several locations in the states of UP, Uttaranchal, Punjab and MP with a view to expanding its footprint and cater to the growing demand for Hindustan among consumers and advertisers.
• The Company continues to focus on strengthening its core business through product improvements and brand initiatives which would enhance the quantum and quality of readership and thereby create value for advertisers.
• Mint: The paper is gradually earning a loyal readership base and has attained number 2 position in Delhi, Bangalore and Mumbai. The Company plans to leverage revenues of Mint through its presence as a national business daily and a quality product.
• Radio: Fever 104 is a choice of 8 million listeners across various cities like Delhi, Mumbai, Kolkata, & Bangalore. The Company believes Fever 104 will continue to build strong brand & listener ship going forward.
• Internet: Backed by successful launch of shine.com in the current quarter and of the social networking website desimartini.com in Q3 of FY’08, the Company plans to expand and grow its social networking and jobs portals and also leverage its print business in these segments. The Company also plans to build real estate and matrimonial verticals in this segment through its subsidiary Firefly e-Ventures Limited.
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ANSecFY07 FY08 FY09E FY10E FY11E
Net Sales 1039.89 1205.80 1292.09 1389.00 1493.18
Other Income 37.17 43.87 28.52 30.51 32.65
Total Income 1077.34 1249.32 1320.61 1419.51 1525.82
Total Expenditure 871.74 1035.56 1123.82 1190.92 1270.07
PBIDT 205.60 213.76 196.79 228.59 255.75
Interest 14.96 17.79 18.59 18.99 19.39
PBDT 190.64 195.97 178.20 209.61 236.37
Depreciation 43.60 56.99 63.07 64.04 64.89
Profit Before Tax 147.04 138.98 115.14 145.57 171.47Tax 54.57 37.65 35.82 52.09 69.41
Reported Profit 94.23 100.65 85.35 97.51 108.09
Income Statement (Rs. in Cr.)
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ANSecBalance Sheet (Rs. In Cr.)
FY07 FY08 FY09E FY10E FY11E
Sources of Funds:
Share Capital 46.85 46.85 46.85 46.85 46.85
Reserves 717.36 806.03 877.32 953.75 1034.44
Total Shareholders Funds 764.21 852.88 924.17 1000.60 1081.29
Total Debt 165.75 223.07 233.07 238.07 243.07
Total Liabilities (including Minority interest) 929.97 1076.00 1157.24 1238.67 1324.36
Application of Funds:
Net Block 462.52 511.85 519.70 526.67 536.12
Capital Work in Progress 30.91 58.92 63.25 65.23 76.52
Investments 229.26 265.64 278.22 299.4 308.82
Net Current Assets 207.21 239.52 296.07 347.37 402.90
Total Assets (Miscell. Expenses not written off) 929.97 1076.00 1157.24 1238.67 1324.36
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ANSecRatio EvaluationFY07 FY08 FY09E FY10E FY11E
Liquidity Ratio'sDebt-Equity Ratio 0.22 0.26 0.25 0.24 0.22
Current Ratio 1.98 1.85 1.90 1.95 2.00
Turnover Ratio'sFixed Assets Ratio 2.25 2.36 2.49 2.64 2.79
Inventory 8.19 9.47 9.40 9.28 9.20
Debtors 1.19 1.16 1.15 1.17 1.18
Investment Ratio'sAdj. EPS 4.02 4.30 3.64 4.16 4.61
ROE(%) 12.33 11.80 9.23 9.75 10.00
ROCE(%) 17.42 14.57 11.56 13.28 14.41
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ANSec
Amit Nalin Securities Pvt. Ltd.142/A, Mittal Tower,Nariman Point, Mumbai 400021
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Email : [email protected]
Research Team:
Amit Dalal
Rujuta Dalal
Vinod Malviya
Moiz Tambawala
Amruta Vaidya
Thank You
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ANSecDisclaimerThis document has been prepared by Amit Nalin Securities Pvt Ltd.
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