Jagran Prakashan - Will Shine Bright

Jagran Prakashan - BUY

Jagran Prakashan Ltd (JPL) is the publisher of the Hindi newspaper Dainik Jagran. JPL publishes 25 main editions and 200 sub-editions of Dainik Jagran in 10 States in the Hindi heartland of India - Jammu and Kashmir, Punjab, Rajasthan, Delhi, Uttaranchal, Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh and Chattisgarh.

The National Readership Survey (NRS) 2005 and Indian Readership Survey (IRS) 2005 (Round 2) gave Dainik Jagran a readership of 2.12 crore and 1.92 crore respectively, which is more than the readership of all English dailies put together. JPL has diversified into other media spaces also. In 2003-2004, JPL launched Jagran Solutions that provides outdoor advertising, loyalty and incentive programmes, school and college contact programmes, road shows and event management services. This division earned revenues of Rs1.58 crore during Apr-Sep 2005. JPL launched the integrated voice recording/automatic speech recognition (IVR ASR) service on short code 7272 in Jan 2005 and SMS service on the same short code in Mar 2005. From these services, JPL earned revenues of 68.5 lakh during Apr-Sep 2005.

JPL also has a monthly Hindi magazine called Sakhi for high- society women. The magazine earned revenues of Rs33.9 lakh during Apr-Sep 2005. JPL has introduced two vans on a trial basis for mobile outdoor advertising and plans to buy 250 more vans in the coming two years.

JPL's advertising revenues have increased by 135 percent from Rs99 crore in 1999-2000 to Rs233 crore in 2004- 2005. JPL's gross income increased by 20 percent from Rs312.78 crore in 2003-2004 to Rs377.47 crore in 2004-2005. Its operating profit decreased by 37 percent to Rs26.93 crore from Rs42.87 crore owing to a 30 percent increase in operating expenses. During Apr-Sep 2005, JPL recorded a profit of Rs31.4 crore as compared to a profit of Rs26.93 crore earned during Apr-Sep 2004.

Jagran Prakashan will invest Rs 298 crore for major expansion in the country, of which Rs 80 crore would be exclusively for acquisitions of and strategic investments in other journals and magazines. "Our dream is to make Jagran the number one publishing house not only in terms of revenue but also in the respect of readers," Jagran Prakashan Ltd chairman Mahendra Mohan Gupta said on Tuesday. Asked if the publisher of 'Dainik Jagran' hindi newspaper is planning to acquire dailies and magazines, he said: "It will depend on the strategic alliance. We are open to buy out any language journal and magazine." The group has set up an internal selection committee to screen the offers already coming from various newspapers and magazines, he said.

With a readership of over 2.12 crore and pan-India infrastructure, the group is also looking for strategic alliance and ties with newspapers for revenue sharing. "Many newspapers are number two or three in their regions but lack ad revenues. We would like to tie up with them for sharing ad revenues to the tune of 25-33 per cent and providing them strategic and financial package," Gupta said. He said the group, which has editions in 25 centres, has earmarked Rs 298 crore for expansion of which Rs 137 crore will be capital expenditure for colour printing, quality improvement and minimising newsprint wastage through automation of operations. The group has created a war chest of Rs 80 crore for acqusition and Rs 40 crore for working capital expenses and another Rs 40 crore for outdoor expansions. Apart from planning new editions for Chandigarh and Shimla, the publishing house is planning major brand-building exercise.

Recently, Indrajit Sen, President, Primesite, the integrated Out-of-Home solution arm of Mudra Communications, who has put in his papers yesterday has joined the out of home media solutions division of Jagran Prakashan. He will be begin his innings with Jagran Engage, the OOH division of Jagran Prakashan from March 01, 2006.

In his last assignment, Sen was the President of Primesite, Mudra's ooh agency division, for the last 6 years or so. There he was responsible for turning around the loss-making division and bringing it to within the top 3 position in the OOH industry and the largest revenue -earner amongst the Mudra Group brands this year. A post-graduate from BITS, Pilani, Sen had spent 10 years with The Times Group as Response Head in various territories. Prior to that, he has extensive experience in marketing with different verticals in Indian and foreign markets.

At Jagran Engage, Sen will lead a national team which will be in the OOH business from the media owning perspective. The difference from traditional media owners will be in its offerings to the market - Engage will offer complete OOH media solutions to its' clients nationally and not only sell individual sites. This means, Engage will provide brands with OOH media planning and consolidation services - besides creative adaptations, maintenance and monitoring - at very competitive rates. In doing all this, Engage will get the unstinted support of The Independent Group plc, who has major interest in the largest out-of-home companies in Australia and South Africa.

Jagran Prakashan Limited, it may be recalled, has already declared its commitment to the OOH business and its intention to be a long term and dominant player in this media segment. Engage will execute this business intention by occupying niches and developing the capability of offering solutions with a national footprint with a rapid scale-up model. To enable Engage to do so, Sen is putting together a team of very experienced and seasoned players from the industry. Jagran Prakashan Limited also expects synergistic effect of its other media divisions, including that of the Event Marketing Division - Jagran Solutions, to contribute in making the OOH plans a great success in a short time frame, to add to the Group's overall capabilities to offer unique and effective pan-media communication solutions to its clients.

I feel Jagran Prakashan can be accumulated at around Rs.220-240 and kept for long term. Those who got allotment in IPO should not panic and can even buy more. The promoters are very experienced and are also foraying into new ventures keeping pace with time. Entrepreneurship of the promoters can be judged by the fact that CNN IBN has acquired 50 per cent stake in Channel 7, a Hindi news channel promoted by Jagran TV Private Ltd, for about Rs 60 crore in an all-cash deal. Click Here to read full article about the deal. Further, Jagran Prakashan has raised the cover price ranging from 0.50 paise to Re 1 per copy of most of the editions of its Hindi daily newspaper “Dainik Jagran” from the current month which will improve the profitability in coming quarters.