Jagran Prakashan :: Angel Broking Diwali Top Picks (Diwali Muharat)

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 We expect Jagran Prakashan (JPL) to register a healthy net sales CAGR of ~8%
over FY2014-16E, supported by strong growth in circulation revenue and
improvement in advertising revenue. Further, we expect the company to report
CAGR of ~12% over FY2014-16E in circulation revenue owing to combination of
increase in cover price and volume growth. Also, we expect revenue from
advertisements to pick up due to improvement in GDP growth.
 We expect the company to report an operating profit CAGR of ~12% over
FY2014-16E to `479cr on back of improvement in margin due to lower news print
costs and effective cost management strategy. We expect a net profit CAGR of
~12% over FY2014-16E to `282cr on back of decent sales numbers and healthy
operating profit.
 Considering Dainik Jagran's status as the most read Hindi newspaper and its strong
presence in the rapidly growing Hindi markets of Bihar, Haryana, Jharkhand, Punjab,
Madhya Pradesh and Uttar Pradesh, we expect JPL to benefit from an eventual
recovery in the Indian economy. At the current market price of `122 the stock trades at
a PE of 15.9x and 13.5x its FY2015E and FY2016E EPS of `7.7 and `9.1, respectively.
Hence, we maintain our Buy rating on the stock with a target price of we maintain our Buy rating on the stock with a target price of ```154. 154.