5th August, 2010 INITIATING COVERAGE

JAGRAN PRAKASHAN LTD. (JPL)

CMP : Rs. 122
TARGET : Rs. 144 RESEARCH
Recommendation BUY ON DIPS

Company Background: COMPANY DETAILS

BSE Code 532705
Jagran Prakashan Ltd(JPL), publishes the Hindi newspaper Dainik Jagran,
NSE Symbol JAGRAN
which is the largest read Hindi daily in India. JPL was founded in 1942 by the Bloomberg JAPG IN
late Puran Chand Gupta. Dainik Jagran is circulated in Northern and Central Market Cap. (Rs. Crs) 3674.28
India. It has 37 editions circulated across eleven states Uttar Pradesh, Free Float 44.66

Uttarakhand, Punjab, Haryana, Bihar, Jharkhand, Himachal Pradesh, 52 Week High(Rs) 142.3
52 Week Low(Rs) 80.25
Madhya Pradesh, Delhi, West Bengal and Jammu & Kashmir. It has been
Dividend Yield -% 1.65
the largest read daily of India for the last consecutive 11 rounds of the Beta 0.7818
Indian Readership Survey. This is a unique record in the history of Indian
media. The popularity of the newspaper can be gauged from the fact that
SHARE HOLDING PATTERN %
almost every third Hindi newspaper reader and every ninth any newspaper
Foreign 8.69
reader in India reads Dainik Jagran. Besides newspapers, the company has
Institutions 15.56
interests in other media viz; Out of home advertising, Internet, Below the Non-Promoter Corp Holding 3.03
Line marketing solutions, and Mobile Value Added Services. Promoters 55.34
Public &Others 17.39
We initiate coverage on Jagran Prakashan Ltd. (JPL) with “Buy on Dips” and TOTAL 100
target price of Rs. 144. Our Buy recommendation is predicated on Jagran's
strong leadership position in North Indian markets, robust top line growth
of 17 percent during FY11E -FY2012E and emerging importance of regional
advertising in India. JPL is publisher of Dainik Jagran, which is the largest
circulating newspaper in India in terms of readership (56.6mn, IRS 2010 R1)
with the leadership position in Uttar Pradesh and presence in all together
11 states, with either No.1 or No.2 position in all states.

Growth in EPS backed by Multiple Drivers

We forecast JPL to deliver 37.5% growth in EPS for FY2011E backed by

multiple growth drivers like strong growth in advertisement volumes on
the back of robust economic growth, sustainable ad rate hikes, increasing
shift toward regional media and takeover of publication business of Mid-
Jagran vs Sensex
Day. The revenues from the new business segments like Out Door 20000 160
18000 140
Advertisement and Event Management Business are expected to add to 16000
120
14000
Jagran's publication earnings. 12000 100
sensex

BSE
10000 80
Jagran
8000 60
Valuation 6000
40
4000
2000 20

We expect a growth of 17% in the top line of the business for the FY2011E & 0 0

FY2012E. This growth is expected to be achieved with the advertisement ANALYST

revenues inflow growing at 17% during the FY2011E and at 15% for the Sakshi Malhotra
FY2012E. sakshi.malhotra@eurekasecurities.com
9830084057 / 91-33-3918 0386 - 87
EUREKA RESEARCH www.eurekasecurities.com
Jagran Prakashan Ltd. (JPL)

5th August, 2010

In terms of earnings we expect JPL to post a healthy growth of 37% and 13% during the FY 11E and FY12E respectively. This
increase is mainly expected to be driven by growth in advertisement revenues and efficient cost management.

Investment Highlights:

Strong hold in areas of operations:

JPL is the publisher of the Hindi daily Dainik Jagran, which is the most widely read newspaper in India (56.6mn average
readership, as per Indian Readership Survey 2010 Round 1 (IRS 2010 R1)).JPL publishes 31 editions in the North Indian states
including Uttar Pradesh, Bihar, Uttaranchal, Jammu and Kashmir, Jharkhand, Haryana and Madhya Pradesh. JPL also
publishes woman's magazine 'Sakhi' and 'Jagran Varshiki', which is an annual general knowledge digest. Dainik Jagran is the
market leader in UP and Uttaranchal (Average Issue Readership (AIR) - 94.7 lakhs) which also gives approx 50% of the
revenues to the publishing business. It is a strong No. 2 player in the states of Bihar and Jharkhand (AIR of 32.04 lakhs) and
15% contribution to the company's revenue inflow pie.

STATE RANK AIR OF DAINIK JAGRAN

Himachal Pradesh 3 1,884,000
UP & Uttaranchal 1 9,470,000
Madhya Pradesh 5 458,000
Bihar & Jharkhand 2 3,204,000

Widening Gap between Dainik Jagranand other Competition Source: Indian Readership Survey 2010,Q1.

In the Hindi-speaking North Indian states, Dainik Jagran primarily competes with Dainik Bhaskar, Amar Ujala, Hindustan etc.
However, given the strong editorial content in JPL it has maintained its circulation in all its key markets way above its
competitors. The gap between Dainik Jagran and its closest competitor Dainik Bhaskar almost has a gap of 77 percent in
terms of readership.

The top 25 English papers have a combined readership of 48.7 million as against 56.6 million readers for Dainik Jagran. Other
inferences in favour of the Hindi print media is that the results of the Indian Readership Survey show that 6 out of the top 15
newspapers and the top 4 newspapers in terms of readership belong to the Hindi category.

Readership (in crs)

6 5.43
5
4 3.34
2.94 2.87
3 2.33 2.06
1.67 1.53 1.47 1.42 1.34
2 1.29 1.26 1.14 1.05
1
0

Source: Indian Readership Survey 2010,Q1.

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Jagran Prakashan Ltd. (JPL)

5th August, 2010

Strong Revenues from Advertising and ability to take price hikes

Jagran is clearly witnessing a strong up-tick in advertising. March 2010 has been an excellent month and the company is
confident of strong growth in FY2011E. New emerging sectors like FMCG, Auto and Real Estate have led to volume recovery.
The advertising revenues from the educational sector are also likely to pick up during the admission season. Along with this
the national advertisers have also come back and are increasing their investments in publication business. Driven by
increased readership and the buoyancy in the advertising market, JPL has been able to execute consistent price hikes over
the last few years. Even with the slowdown in the economy in 2009 the company managed to do an advertisement rate hike
of 10%. This trend is expected to continue, and on a conservative basis, we expect the company to increase advertisement
rates by 10 percent during the period FY11 and 12E.

Increasing Colored Advertisement in the total advertisement pie to trigger the top line and bottom line of the business

The share of colored advertisement in the entire advertisement pie is expanding for JPL over the years mainly because of
increased demand and Jagrans increased capacity to publish such advertisements. We see the share of color advertising for
JPL used to be about 20-25% around 4-5 years back and it has slowly improved to reach 45% of the entire advertisement
pool. JPL has been focusing more on color advertisements as they command a 25-40% premium on an average to black and
white rates. Yields on color advertising are thus very high as the incremental cost for color advertising is not proportionate to
the advertising rates.

Mid day acquisition a Positive Step towards a wider portfolio

JPL Ltd acquired the newspaper business of Mid-Day Multimedia Ltd in a share swap deal. Mid Day has 4 publications in its
kitty, Mid Day Mumbai, Pune, Bangalore and Delhi, Sunday Mid-Day, Gujarati Mid-Day and The Inquilab (largest read Urdu
newspaper in the country). With the takeover of this company the horizon of JPL will get broadened. JPL earlier had reach
only in northern India, but with the takeover of the publishing business of Mid Day they will be able to gain access in western
India and Mid Day will benefit from larger scale of operations and huge pool of resources of Jagran. With the synergy
between the two media companies, they will also fill the gaps in each other's portfolio. As JPL instead of being only a Hindi
Group will have English, Hindi, Gujarati and Urdu language newspapers in its kitty.

I-Next and City Plus: Adding strength in Current Publishing Portfolio

To increase the strength of the present publishing offerings JPL launched two new newspaper formats, I-Next and City Plus,
in existing as well as new markets. I-Next is India's first bilingual compact Hindi daily targeted at the youth. City Plus is the
Weekly English Tabloid from the group. It has a unique market and is distributed at up-market residential areas, malls,
airports, etc.

Diversification into Out of Home (OOH) advertisement

JPL forayed into the Out-of-Home market in 2004. It offers solutions to prospects & customers through its bouquet of
offerings of Hoardings & Billboards, Unique Street Furniture, and Transit & Mobile Media. This broadening of its advertising
offering will not only enable JPL to offer comprehensive and integrated advertising solutions to its clients but will also reduce
dependence on publishing revenues and enable it to participate in the OOH market growth in India. We are forecasting
revenue for this segment to increase by 25% during the FY11 and FY12.

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5th August, 2010

Industry Overview:

According to the PwC-FICCI 2008 report on Indian Entertainment and Media industry ,the Indian print media industry is
projected to grow by 14% CAGR in the period 2008-2012 .The newspaper advertising segment is expected to reach Rs 170
billion 2012 from Rs 80 billion in 2007. India has low Advertisement to GDP Ratio (0.47) compared to other countries like USA
(1.34), UK (0.95) and China (0.54). Even though the Advertisement to GDP is low in comparison to most of the developed
counties and neighboring countries it has consistently been showing a slow and steady increasing trend. This shows huge
untapped potential for the newspaper advertising industry. JPL with its wide reach and dominant position is best placed to
exploit this opportunity.

(in %) (in %)

Rs billion 2004 2005 2006 2007 2008 2009 2010 2011E 2012E CAGR
(2008-12)
Newspaper publishing 86 96 111.5 130 148 169 195 219 243
% change 12 16 17 14 14 15 12 11 13
Magazine publishing 11.8 13.5 16.5 19 21.5 25 28.7 32.5 38
% change 14 22 15 13 16 15 13 15 15
Total print industry 97.8 109.5 128 149 169.5 194 223.7 251.5 281
% change 12 17 16 14 14 15 12 12 14
Advertising revenues 54.4 62.7 78 94 111 129 152 175 200
Newspaper ad. 80 170
Magazine ad. 14 30
% change 15 24 21 18 16 18 15 18 16
Circulation revenues 43.4 46.8 50 55 58.5 65 71.7 76.5 81
Newspaper circulation 50 73
Magazine circualtion 5 8
% change 8 7 10 6 11 10 7 9 8
Total 97.8 109.5 128 149 169.5 194 223.7 251.5 281
% change 12 17 16 14 14 15 12 12 14
Source: PwC-FICCI 2008 report on Indian Entertainment and Print industry.

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Jagran Prakashan Ltd. (JPL)

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Circulation revenues of the newspaper industry are expected to grow to Rs 73 billion in 2012 from Rs 50 billion in 2007. (PwC-
FICCI 2008 report) This would be contributed by increasing literacy levels in the country. Low levels of literacy in some of the
states of India has placed a limitation on the percentage growth of people reading newspapers, compared with the
percentage of population that is exposed to other media such as television and radio. With the literacy levels increasing over
the years in the states JPL is operational, it further increases the scope of the print business which the publishing business of
JPL is expected to take advantage of.
STATES Literacy Rate (%) - NFHS-3 Literacy Rate (%) - 2001 Census
Himachal Pradesh 81.3 76.48
Madhya Pradesh 76.5 70.53
Uttarakhand 75.7 71.62
Punjab 74 69.65
West Bengal 71.6 68.64
Haryana 71.4 67.91
Jammu and Kashmir 66.7 55.52
Uttar Pradesh 61.6 56.27
Jharkhand 58.6 53.56
Bihar 54.1 47
Source: NFHS 3
Mid-day to fill the gap in JPL portfolio

In order to expand its geographical reach, JPL acquired Mid Day in FY10. As mentioned earlier, Mid Day has 4 publications in
its kitty, Mid Day (Mumbai, Pune, Bangalore and Delhi), Sunday Mid-Day, Gujarati Mid-Day and The Inquilab (largest read
Urdu newspaper in the country). With the takeover of this company the horizon of JPL will get broadened. JPL earlier had
reach only in northern India, but with the takeover of the publishing business of Mid Day they will be able to gain access in
western India and Mid Day will benefit from larger scale of operations and huge pool of resources of Jagran. In FY 10 we saw
that the print business of Mid Day has experienced a de-growth in its top line from Rs 102 crs in FY09 to Rs 94.9 crs in FY10,
this was mainly because of loss in readership as it was facing immense competition from its competitors like HT Mumbai and
the likes. Even with falling revenues the company witnessed strong growth in EBIT and EBIT margins. Its EBIT Margin
increased from 13.1% in FY2008-09 to 16.9% in FY2009-10. EBIT increased because of cost efficiencies and low newsprint
prices during the year. The company has not taken over the loss making radio business of Mid-Day.

Particulars FY10 FY09

MID-DAY- Business segments Sales(cr) EBIT(cr) EBIT MARGINS (%) Sales(cr) EBIT(cr) EBIT MARGINS (%)
Publishing 94.9 16.9 17.8 102.0 13.1 (12.8)
Radio (Not taken over by Jagran) 30.3 (13.3) (43.8) 28.0 (16.1) (57.5)
Source: Company, Eureka Research

I-Next

I-Next is a newly launched product. It is India's first bilingual compact Hindi daily targeted at the youth. In just 18 months it
has captured 1.4 Million readers. It covers 9 prominent cities in 4 states of India through its various editions and
infrastructure. It has a cover charge of Re1 and advertisement to editorial ratio of 30:70. I Next has made revenue of 35 crs
during the FY10. This segment is expected to show robust growth in the coming years as the management has a vision of
making I-Next a 220-250 Crores brand in the next 3-4 years.

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City Plus

City Plus is the free Weekly English Tabloid from the group. It is targeted at youth and distributed at upmarket residential
areas, malls, airports, etc. It is English News-Information- Entertainment paper with 16 editions from Delhi, NCR, Bangalore
and Pune, targeting premium localities. It's a special publication with an advertisement to publication ratio of 40:60. In the
FY2010 it has an approx readership of about 0.4 million and revenue inflow of Rs. 5 crs with 14 editions and now they plan to
have 24 editions in FY11.

Other Non-Publishing businesses in the Portfolio

Out of Home Advertizing

Jagran Engage is the Out- of- Home (OOH) advertising business of JPL. It was established to provide complete Out-of-Home
advertising solutions to advertisers. Jagran Engage covers 900 + towns spread across 370 districts in 27 states. Engage offers
Out-Of-Home solutions to customers through its bouquet of offerings of Hoardings and Billboards, Unique Street Furniture
and Transit & Mobile Media to suit specific client requirements.

Currently, the division is doing business with leading OOH agencies like Ogilvy, Portland, MOMS, OAP, Initiative, Prime
Outdoor; ad agencies like Triton and Innocean; Fame and Rave multiplex chains; direct clients like Star Health Insurance,
Apollo Hospitals, Titan (sunglasses), Aircel and UB Group's Romanov. Out-of-Home advertisement business recorded de-
growth in FY10 while JPL showed a substantial growth of 13% in this business. The revenues for FY2010 for the Outdoor
advertisement business have also been substantial at Rs 47 Crores.

Customer Relations Arrangements & Event Management

Jagran Solutions, a division of JPL specializes in providing versatile, complete and measurable solutions for organizing
corporate events, conventions, product launches, meetings, conferences, exhibitions and contests, etc.

Out of home advertisement and Event management business put together has recorded a growth of 28% during FY10. Event
management business has reported revenue of Rs 23 crore in FY10.

Online and Mobile based Services

J9 is the online and mobile value added services and home shopping division of JPL. In 2007, through a strategic alliance with
Yahoo, jagran.com was launched as a co-branded site 'http://in.jagran.yahoo.com'. It is the world's largest portal in the
Hindi genre. It has also launched an Online Classified platform 'khojle.in', online Gaming Platform 'jeetle.in'. Mobile add-on
services (wap.jagran.com).

Financial Performance

Jagran has recorded a steady 4 year CAGR growth of 11.6% in sales FY07-FY10 on the back of steady growth in advertisement
revenues. Advertisement revenues have grown from Rs 388 crore in FY07 to Rs 638 crore in FY10 growing at a CAGR of
13.24% in the period. With steady increase in sales, the company has also been able to increase its operating profit margin
from 24% in 2007 to 34% in FY10. Similarly capital efficiency ratio viz. return on capital employed (ROCE) has moved up from
18% in 2007 to 30% in FY10. ROE is expected to improve from 15.8% in 2007 to 30% in FY10.

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Even in FY09 when the economy suffered a slowdown, advertisement revenues showed a growth of 10% over FY08. The total
contribution from advertisement from the publishing business has also been consistent over the years at about 69% of the
total revenues. Looking forward we expect the same trend to continue in next two years. The advertisement contribution is
expected to grow substantially, being on the conservative side we have expected it to grow at a rate of 17% for the FY2010-
11; this figure is inclusive of the growth in volumes as well as rates. For FY12 we expect 15% growth in advertising revenues.
The circulation revenues are expected to grow at a rate for 4% for the coming period.

Break-up of revenue contribution (in crs)

1200

1000 233.19
224.22
800
215.6
195.41
600 181.12 Circulation Revenue

400 858.97 Advertisement Revenue

746.93
638.4
498.79 551.71
200

0
FY08 FY09 FY10 FY11E FY12E

Q1FY11 Result Highlights

! The Top line of the business grew at 14% on a QoQ basis and 16% on an YoY basis this lead to a growth in bottom line of
12.12% on a YoY basis( PAT of 55.5 crore as against Rs 49.5 crore) that is what has resulted in operating profit margins
going up to 33.42% from 30%.

! The advertisement revenue has recorded a robust growth of about 18% on quarter-on-quarter basis due to a
combination of advertisement rate hike and advertisement volume growth. The company hiked advertisement rates by
an average of 10% in April.

! The Inflow from Circulation revenues has been more or less flat with only an increase of 1.45%. The newsprint cost
increased by 8% on a YoY basis and 12% on QoQ basis.

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Q1 FY11 Q1 FY10 % Chg Q1 FY11 Q4 FY10 % Chg FY10 FY09 % Chg

Net Sales 265 228.9 15.78 265 232.1 14.17 927 807.3 14.88
Other Operating Income 4.84 3.01 4.84 4.19 14.5 16.1
Total 269.8 231.9 269.8 236.3 942 823.4
(Increase)/Decrease in SIT &WIP 0.084 0.008 0.084 0.177 0.03 -0.05
Raw Material Consumed 75.56 70.12 75.56 67.58 274 317.9
Employee Expenses 34.74 28.92 34.74 31.95 121 106.5
Other Expenses 69.26 62.31 69.26 73.32 265 242.3
Total expenditure 179.6 161.4 11.33 179.6 173 3.824 660 666.7 -1.06
PBIDT 90.17 70.5 27.89 90.17 63.24 42.57 282 156.7 80.11
PBIDT (%) 33.42 30.41 3.011 33.42 26.77 6.651 30 19.03 10.93
Other Income 5.74 15.66 5.74 6.6 34.3 22.72
Profit before Interest and 95.91 86.16 95.91 69.84 317 179.4
exceptional items
Interest 1.22 1.37 1.22 2.39 6.57 5.9
PBDT 94.69 84.79 94.69 67.45 310 173.5
Depreciation 12.48 12.37 12.48 13.48 50.8 38.32
Tax 26.6 22.93 26.6 17.59 83.3 43.57
PAT 55.61 49.49 12.35 55.61 36.38 52.83 176 91.65 91.91
PAT (%) 20.61 21.35 -0.74 20.61 15.4 5.21 18.7 11.13 7.542
EPS 1.85 1.64 1.85 1.21 5.84 3.04

Conference Call Highlights:

! The company is positive about its results and expects the trend to continue for the rest of the year. Growth in revenues is
likely to be advertisement driven as the key advertisers are back with the education sector and the automobile sector
along with local retailers forming the key customers.

! The advertisement growth is expected to be 17% to 18% for the entire year. On the circulation side the company is
concentrating to increase penetration in the existing areas rather than coming up with new editions and areas. The
companies attempt to increase penetration can be seen even in the first quarter as we see that the number of copies
circulation increased by 2.5% which is 70000-75000 copies per day. Though the cover price has fallen in Jharkhand
towards the end of the quarter we cannot attribute the increase in circulation to this factor.

! Due to pressure from the competitors the management had to reduce cover charges in Jharkhand to Rs.2, but it is
expected that this move should not have any major impact on the bottom line.

! There has been a fall in the Other Income by about Rs. 10Crs. This has been because last year the company made Capital
Gain of Rs 7crs and Profit from foreign exchange of Rs.3 crs which was not the case this year.

! The other business segments like the Out Door Advertisement and Event Management are expected to grow at a rapid
rate of 25% on the Top Line and by next year they are expected to have operating margins of 20%-25%

! The takeover of Mid Day is in track and the investments by Blackstone are also in line with expectations. The company has
already started work on Mid Day by negotiating Newsprint prices, ink, aluminum etc for mid day so that the company can

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reap synergies from the Q4 FY11E onwards.

! Q2 FY10 was the festival season with Diwali falling within that quarter, but in case of FY11, Diwali is a part of Q3. Thus,
going forward it is expected that Q2FY11E when compared on YoY basis will not show very robust results but this slight
expected fall should get compensated adequately in Q3FY11 with ease.

Risks And Concern Of Business

Volatile Newsprint Prices

There is a risk of newsprint prices going up in FY2011. But the margins of the business are not expected to be effected
significantly because the company has entered into long term contracts stretching upto an year with its suppliers to supply
newsprint at $520/MT where the current market price of imported newsprint is at $600-650/MT. Along with this it has also
limited its imported newsprint consumption to about 20% of the total which is substantially lower than that of its
competitors. It approximately has an import-domestic ratio of 20%-80%, this automatically brings the overall cost for
newsprint consumption down as domestic newsprint is cheaper by about 5% to 10% (depending on the quality used)
compared to imports.

Looking forward we expect that the newsprint prices will rise and to approximately reach the level of $700/MT by the end of
the FY2011E. Considering the present situation of the company where JPL has already entered into long term contracts with
foreign suppliers and medium term contracts with domestic suppliers we expect a total of 12% increase in Raw Material
prices for FY11E and 17% for FY2012E.

Competitive pressure

Dainik Jagran is facing stiff competition in the top six cities of Uttar Pradesh from Hindustan and Amar Ujala. To counter the
competition JPL has ventured into city news segment and has launched two newspapers I-Next and City Plus in key markets
of U.P, Bihar and Jharkhand.

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Financial Projections

Income Statement
(Rs crores) FY09 FY10 FY11E FY12E
Net Sales 807.27 927.4 1089.15 1275.16
Other Operating Income 16.1 14.5 14 14
Total Income 823.37 941.9 1103.15 1289.16
Total Expenditure 666.66 659.61 730.79 837.87
PBIDT 156.71 282.29 372.37 451.29
Other Income 22.72 34.25 42.81 53.52
Profit before Interest and EI 179.43 316.54 415.18 504.80
Interest 5.9 6.57 6.06 4.86
PBDT 173.53 309.97 409.12 499.94
Depreciation 38.33 50.75 56.43 59.50
PBT 135.2 259.22 352.69 440.45
Tax 43.57 83.32 99.38 153.18
Reported PAT 91.63 175.9 253.30 287.27
Equity 60.23 60.23 63.09 63.09
EPS 3.04 5.84 8.03 9.1
P/E 20.55 15 13.18

Balance Sheet
(Rs crores) FY09 FY10 FY11E FY12E
Share holders fund
Capital 60.23 60.23 63.09 63.09
Reserves & surplus 499.68 552.26 695.14 871.98
Total Share Holders Fund 559.91 612.49 758.23 935.07
Loan Funds 141.46 121.35 101 81
Deferred Tax Liabilities 52.07 58 58 58
TOTAL 753.46 791.86 917.23 1074.07

Gross Block 479.51 563 643 723

Less: Accumulated depreciation 80.55 169 225.34 284.84
Fixed Assets 398.96 394.08 417.66 438.16
Investments 156.8 166.58 166.59 166.59
Current assets, Loans & Advances
Inventories 31.8 53.33 68.07 79.70
Sundry Debtors 158.57 181.22 208.88 244.55
Cash & bank Balances 82.75 85.17 167.93 378.1
Other Current Assets 21.41 25.87 25 25
Loans and Advances 65.49 71.72 75.31 79.07
Less: Current Liabilities & Provisions
Current Liabilities 88.64 129.57 147.24 175.16
Provisions 73.73 56.58 64.97 66.76
TOTAL 753.46 791.86 917.23 1074.07

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Ratio Analysis

Ratio analysis 2009 2010 2011E 2012E

OPM (%) 19.4 30.4 34.2 35.4
NPM (%) 11.4 19.0 23.3 22.5
ROE 16.7 30.0 37.0 33.9
ROCE 19.7 34.4 42.0 44.7
Debt-equity 0.3 0.2 0.1 0.1
EV/EBIDTA(x) 13.4 10.6 8.7
P/E(x) 20.9 15.2 13.4
P/BV(x) 6.0 5.1 4.1
EBITDA Margin 19.0 30.0 33.8 35.0
Debtors Turnover 5.09 5.12 5.21 5.21
Inventory Turnover 25.36 16.75 16 16

Recommendation

We expect a growth of 17% in the top line of the business for the FY2011E & FY2012E. This growth is expected to be achieved
with the advertisement revenues inflow growing at 17% during the FY2011E and at 15% for the FY2012E. This would come on
the back of 10% hike in Ad rates with a corresponding increase in volumes. The circulation revenues are expected to remain
flat with a small increase of 4% in for FY2011E and FY2012E. Other factors which are expected to further trigger
advertisement growth are the increasing importance given by the Education Sector on advertisement and consumers
preferring colored advertisements to black and white. Since colored advertisement rates are higher in comparison to the
black and white by almost 15%, this would further increase the advertising revenues.

In terms of earnings we expect JPL to post a healthy growth of 37% and 13% during the FY 11E and FY12E respectively. This
increase is mainly expected to be driven by growth in advertisement revenues and efficient cost management. Acquisition
of the publishing business of Mid Day is a positive step and we expect benefits of the synergies to start flowing in from FY12.
We recommend a "Buy on Dips" on the stock with a target price of Rs 144 which is 16(x) FY12E EPS of Rs. 9.1.

DISCLAIMER : The information in this report has been obtained from sources, which Eureka Research believes to be reliable, but
we do not hold ourselves responsible for its completeness in accuracy. All estimates and opinions in this report constitute our
judgement as of this date and are subject to change without notice. Eureka Research will not be responsible for the consequence
of reliance upon our opinion or statement contained herein or for any omission. Any feedback can be mailed to the following ID.

Analyst : Sakshi Malhotra

Email : sakshi.malhotra@eurekasecurities.com
Phone : 9830084057 / 91-33-3918 0386 - 87
Registered Office : 7 Lyons Range, 2nd Floor, Room No. 1, Kolkata - 700001
Corporate Office : B3/4, Gillander House, 8 N S Road, 3rd Floor, Kolkata - 700001
Phone : 91-33-2210 7500 / 01 / 02, Fax: 91-33-2210 5184
e: helpdesk@eurekasecurities.com
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Phone : 91-22-2202 5941 / 5942
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