Wednesday, March 14, 2012

>PRINT SECTOR: Top-2 dailies register decline in readership

Pecking order remains largely unchanged

 Lokmat makes a comeback as it climbs up to rank 7th from rank 8th (Lokmat had slipped to rank 8th from rank 6th in IRS 2Q 2011 survey) with an AIR (Average Issue Readership) of 7.6mn. Saving this reshuffling, the pecking order remained unchanged. The top-2 dailies, Dainik Jagran and Daink Bhaskar registered AIR decline on ror (readership over readership) basis of ~0-2%, while, Hindustan registered marginal increase of 0.1% ror in its AIR

■ Jagran Prakashan (flagship daily Dainik Jagran (DJ), other dailies Mid Day and Inquilab) maintained its leadership with AIR of 16.4mn, while, DB Corp ( flagship daily Dainik Bhaskar) registered an AIR of 14.6mn. DB Corp’s strategy of increasing urban readers has paid rich dividends, with consolidated DB Corp (dailies Dainik Bhaskar (DB), Divya Bhaskar, DB Star and Business Bhaskar) increasing its urban readership by 0.7% ror to 12.8mn, however, rural readership of Dainik Bhaskar registered decline of 5% ror to ~5mn. Hindustan maintained its 3rd rank albeit on a flattish growth rate with AIR of ~12mn

■ We have highlighted the urban readership numbers for the companies under our coverage (refer Exhibit 4 and Exhibit 5), as we believe dominant presence in urban areas is a good indicator for the companies to garner higher advertisement revenue

■ We maintain our Neutral recommendation for Jagran Prakashan (CMP Rs103, fair price of Rs104/share) and HT Media (CMP Rs141, fair price of Rs143/share). We are Reduce on DB Corp (CMP Rs209) with Target Price of Rs174/share as we believe, that the market is not factoring : 1)slower GDP growth rate of India resulting in lower advertisement revenue recognition (as DB Corp is primarily an urban play) and 2) numerous new launches (launched Divya Marathi), which will be a drag on the company’s balance sheet.

To read full report: PRINT SECTOR