Result Update November 13, 2017

Rating matrix Rating : Hold Jagran Prakashan (JAGPRA) | 170 Target : | 185 Target Period : 12 months Potential Upside : 9% Weak set of numbers… What’s changed?  Jagran Prakashan reported topline of | 566.5 crore vs our Target Changed from | 210 to | 185 EPS FY18E Changed from | 12.2 to | 11.5 expectations of |586.7 crore. The ad revenue performance of (0.3% EPS FY19E Changed from | 14.2 to | 13.1 YoY, vs our expectation of +5% YoY) was weak compared to DB Rating Changed from Buy to Hold Corp (+6.1% YoY), but was better than HMVL (-7.7% YoY). The circulation revenues came in at |106.3 crore (down 0.7% YoY) vs our Quarterly performance expectations of 108.8 crore. The radio revenues reported a growth of Q2FY18 Q1FY17 YoY (%) Q4FY17 QoQ (%) 10% YoY, vs our expectation of 12% YoY growth, albeit better than Revenue 566.5 564.4 0.4 562.0 0.8 ENIL (reported de-growth in ad revenues during the quarter) EBITDA 138.6 155.8 (11.1) 144.1 -3.8  EBITDA came in at | 138.6 crore, below than our expectations of | EBITDA (%) 24.5 27.6 -314 bps 25.6 -117 bps 154.4 crore, owing to weaker topline performance. The consequent PAT 69.5 83.8 (17.0) 81.1 -14.3 EBITDA margins, therefore, came at 24.5%, lower than our Key financials expectations of 27.1%. FY16 FY17 FY18E FY19E  PAT came in at | 72.2 crore (vs. expectation of | 80.4 crore) owing to Net Sales 2,079 2,283 2,405 2,603 lower operating performance EBITDA 590 640 656 732 Ad growth is being impacted by lower spending by UP Government PAT 350 348 357 409 EPS 10.7 10.6 11.5 13.1 The regional print segment continues to remain tepid as it struggles to recover from headwinds such as demonetisation and legislation led after Valuation summary effects. During Q2FY18, Print ad witnessed a muted growth of 0.3% YoY FY16 FY17 FY18E FY19E to | 363.5 crore. The growth was impacted by GST related hiccups and P/E 15.9 16.0 14.8 12.9 slower spending by the UP government. We believe since government Target P/E 17.2 17.4 16.1 14.1 and retail together contributes 55-60% of the revenue, continued lower EV / EBITDA 9.6 8.3 7.8 6.6 P/BV 3.4 2.6 2.3 2.1 spending by UP govt. could impact the ad revenue growth going ahead. RoNW 19.6 16.1 15.3 16.0 We expect the print ad revenue to grow at 8.2% CAGR (vs. earlier RoCE 21.8 20.1 20.3 21.4 estimates of 8.9%) over FY17-19E to | 1627.9 crore. Circulation revenues are expected to grow at 3.7% CAGR over FY17-19E to | 465.1 crore. Stock data Radio continue to outperform peers Particular Amount Market Capitalization | 5549.3 Crore The radio business continues to witness strong traction. The quarter saw Total Debt (FY17) | 133.4 Crore radio revenue growth of 10% YoY to | 75.8 crore which was better than Cash (FY17) | 349.1 Crore the peer ENIL who witnessed revenue decline of 2.5% YoY. The EV | 5304.3 Crore company’s strategy of balancing volume and realisations vs market 52 week H/L 213 / 162 leader’s strategy of pricing premium at the cost of volumes resulted into Equity capital | 65.4 Crore the outperformance. We expect strong improvement in profitability of the Face value 2.0 radio business on account of new stations break even. We build in 14.2% CAGR over FY17-19E YoY to | 353.9 crore with margins of 34.4% by Price performance FY19E. 1M 3M 6M 12M HT Media 2.6 20.3 17.9 23.9 Slow ad growth & competitive intensity a concern; Downgrade to HOLD DB Corp -3.6 -0.1 -1.8 -2.3 The print remains of the weakest segment in terms of recovery tailwinds Jagran Prakashan -2.6 -1.3 -13.0 -8.1 as localised advertisement coupled with key segment such as local advertisers as well as retail remains subdued. Moreover, Jagran’s key Research Analysts market has seen tepid government ad spending coupled with increased competitive intensity in terms of cover pricing. We also note that Jagran’s Bhupendra Tiwary performance vis-à-vis regional print peer remains mixed (reported a [email protected] muted print ad growth ~0.3% YoY vs. DB Corp which reported relatively Sameer Pardikar better growth of 6.1%YoY and HMVL has reported de-growth of 7.7%, [email protected] respectively). We believe that print ad recovery is likely to be a gradual affair. We, therefore, downgrade the stock to HOLD rating with a target price of | 185 on the SOTP basis. We have valued the core business at 12x FY19E (20% discount to the peer DB Corp) earnings as Jagran has been historically trading at a discount to DB Corp. We value radio business at 30x FY19E earnings.

ICICI Securities Ltd | Retail Equity Research

Variance analysis Q2FY18 Q2FY18E Q1FY17 Q4FY17 YoY (%) QoQ (%) Comments Revenue 566.5 586.7 564.4 562.0 0.4 0.8 The ad revenue performance of (0.3% YoY, vs our expectation of +5% YoY) was weak compared to DB Corp (+6.1% YoY), but was better than HMVL (- 7.7% YoY). The circulation revenues came in at |106.3 crore (down 0.7% YoY) vs our expectations of 108.8 crore. The radio revenues reported a growth of 10% YoY, vs our expectation of 12% YoY growth, albeit better than ENIL (reported de-growth in ad revenues during the quarter)

Other Income 12.5 5.0 9.3 12.8 34.2 -2.2 Raw Material Expenses 165.2 170.8 169.3 155.5 -2.4 6.2 Employee Expenses 99.9 103.0 89.8 95.4 11.3 4.7 Marketing Expenses 162.8 158.4 149.5 167.0 8.9 -2.5 Total Expenses 427.9 432.2 408.6 418.0 4.7 2.4 EBITDA 138.6 154.4 155.8 144.1 -11.1 -3.8 EBITDA Margin (%) 24.5 26.3 27.6 25.6 -314 bps -117 bps Depreciation 34.0 29.3 30.2 35.1 12.7 -3.1 Interest 7.4 3.3 10.2 8.1 -27.6 -8.2

Total Tax 37.5 38.0 40.7 32.7 -7.8 14.8 PAT 69.5 88.6 83.8 81.1 -17.0 -14.3 PAT came in lower owing to lower operating performance Key Metrics Advertisement Growth (%) 0.3 5.0 -0.3 3.8 Ad growth in the quarter was impacted by aftereffects of demonetisation and lower govt. ads Subscription Growth (%) -0.7 3.3 6.6 1.5 The competitive pressure in key markets of UP and Bihar led to lower circulation growth

Source: Company, ICICIdirect.com Research

Change in estimates FY18E FY19E (| Crore) Old New % Change Old New % Change Comments Revenue 2,434.5 2,404.7 -1.2 2,625.6 2,603.0 -0.9 We have realligned our estimates based on H1FY18 performance. EBITDA 679.5 656.4 -3.4 745.3 731.9 -1.8 EBITDA Margin (%) 27.9 27.3 -60 bps 28.4 28.1 -28 bps PAT 380.3 356.7 -6.2 442.6 408.7 -7.7 EPS (|) 12.2 11.5 14.2 13.1

Source: Company, ICICIdirect.com Research

Assumptions Current Earlier Comments FY16 FY17 FY18E FY19E FY18E FY19E Advertisement Growth (%) 6.2 4.8 6.6 10.1 11.7 9.9 We have lowered our ad estimate sand now build in recovery from H2FY18 onwards Circulation Growth (%) 4.7 5.9 0.3 7.2 5.1 4.0 Circulation growth estimates for FY18 have been slightly lowered to incorporate pricing pressure

Source: Company, ICICIdirect.com Research

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Company Analysis

Ad growth recovery recovery delayed FY17 performance across the print media (as well as other media) was impacted due to the demonetisation and its after-effects. Consequently, Jagran also witnessed muted print ad growth of ~5% in FY17.

However, coming into FY18, the recovery was expected but the legislation led uncertainty (GST, RERA) coupled with longer than expected recoup from demonetisation and slower govt. spends have pushed the same. During Q2FY18, Print ad witnessed a muted growth of 0.3% YoY to | 363.5 crore. The growth was impacted by GST related hiccups and slower spending by the UP government. We believe since government and retail together contributes 55-60% of the revenue, continued lower spending by UP govt. could impact the ad revenue growth going ahead. We expect the print ad revenue to grow at 8.2%

CAGR (vs. earlier estimates of 8.9%) over FY17-19E to | 1627.9 crore.

Exhibit 1: Ad growth trend

1,800 12.0 1,600 10.0 1,400 10.1 1,200 8.0 6.6

1,000 5.1 4.8 | Crore |

6.0 (%) 800 6.2 600 4.0 400 2.0 200 1,247.1 1,324.0 1,387.6 1,478.5 1,627.9 0 - FY15 FY16 FY17 FY18E FY19E

Ad Revenue YoY Growth

Source: Company, ICICIdirect.com Research

Exhibit 2: Ranking in certain Hindi speaking areas States Top three Hindi newspaper with Average Issue Readership ( in thousand) Bihar Hindustan (4814) Dainik Jagran (2913) Aj (245) Chandigarh Dainik Bhaskar (170) Amar Ujala (73) Punjab Kesari (38) Chhattisgarh Dainik Bhaskar (899) Nava Bharat (Mah/Chh) (617) Hari Bhoomi (895) Delhi Navbharat Times (1808) Hindustan (1028) Punjab Kesari (608) Haryana Dainik Bhaskar (1282) Dainik Jagran (1006) Punjab Kesari (975) HP Amar Ujala (445) Punjab Kesari (371) Divya Himachal (211) J&K Amar Ujala (114) Punjab Kesari (40) Dainik Jagran (27) Jharkhand Hindustan (1678) Prabhat Khabar (1322) Dainik Jagran (869) MP Dainik Bhaskar Group (4124) Nai Dunia (1055) Nava Bharat (MP) (131) Rajasthan Rajasthan Patrika (6733) Dainik Bhaskar Group (6234) Dainik Navjyoti (490) UP Dainik Jagran (8900) Amar Ujala (6646) Hindustan (4233) Uttaranchal Amar Ujala (829) Dainik Jagran (710) Hindustan (388)

Source: IRS December 2012, Company, ICICIdirect.com Research

Circulation revenues to grow at 3.7% CAGR in FY17-19E

The company’s prices in leadership markets are already above its peers. Hence, further price hikes would still be away. However, increased penetration of its other publications such as Nai Duniya, Mid Day would add to circulation revenues as demand picks up.

ICICI Securities Ltd | Retail Equity Research Page 3

On the circulation front, the increase in competitive pressure in UP and Bihar, led to some drop in cover prices, thereby leading to 0.7% decline in circulation revenues during the quarter. We have consequently, lowered our circulation revenues growth estimates. Circulation revenues are expected to grow at 3.7% CAGR over FY17-19E to | 465.1 crore.

Exhibit 3: Circulation revenue

480 10.0 9.0 460 8.0 440 7.0 420 6.0

| Crore | 5.0 % 400 4.0 380 3.0 2.0 360 390.1 408.6 432.5 433.8 465.1 1.0 340 - FY15 FY16 FY17 FY18E FY19E

Circulation revenue YoY growth

Source: Company, ICICIdirect.com Research

Radio growth remains robust The radio business continues to witness strong traction. The radio business continues to witness strong traction. The quarter saw radio revenue growth of 10% YoY to | 75.8 crore which was better than the peer ENIL who witnessed revenue decline of 2.5% YoY. The company’s strategy of balancing volume and realisations vs market leader’s strategy of pricing premium at the cost of volumes resulted into the outperformance.

The company has successfully completed the launch of all newly acquired stations in FY17, and new station traction would drive the radio ad growth. We expect strong improvement in profitability of the radio business on account of new stations break even. We build in 14.2% CAGR over FY17-19E YoY to | 353.9 crore with margins of 34.4% by FY19E.

Exhibit 4: Radio financials FY16 FY17E FY18E FY19E Radio Revenues (| Crore) 225.5 271.4 306.4 353.9 EBITDA (| Crore) 78.1 91.3 98.5 121.6 EBITDA % 34.6 33.6 32.1 34.4 PAT (| Crore) 27.6 36.7 51.1 66.5 Source: Company, ICICIdirect.com Research

Conference call highlights: GST Related uncertainty continues to hurt ad spending, lower spending by UP Govt is a concern: Management attributed current subdued performance to GST related hiccups and lingering effect of demonetization. Though the company has witnessed 20% ad growth in the month of Sep, the growth in earlier two months was subdued. As per management frequent changes in GST rates would only increase the uncertainty going forward. RERA regulations didn’t impact much since real estate is a small category for the company. Management also mentioned that UP govt related spending has been on the slow lane and which also has been impacted its Q2 growth. As per management, there

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was a loss in the tune of |8 to 8.5 crore attributable to slow spending by the UP Government. There was an additional impact of municipal elections on the ad growth.

As per management IRS survey has been delayed by couple of months, expects to be more tamper-proof this time: As per management IRS survey has been delayed by couple of months and expects to be completed by Dec’17, and results would be out early next year. Management didn’t expects any litigation on the survey results this time, since the survey is being carried out in in a more stricter manner.

Management guided for 20-25% CAGR growth for the next 5 years in Digital revenues: As per the management, Digital revenues grew by 34% YoY, while there was a de-growth for the peers. Management has attributed this growth to strategic initiatives taken last year to make product centric approach for news. The management indicated that the split of direct and indirect channels of ad is 60:40. The management said that their endeavour is to command ~7% share in digital ad, similar to what they are commanding in print ad.

Management planning to increase circulation in Madhya Pradesh, no plans for any acquisition: Management confirmed that they are planning to increase circulation in Madhya Pradesh. As per management, they have been moved to no 2 position in MP from earlier 3. Nai Dunia has registered a growth of 16% YoY, on the back of circulation share improvement in Bhopal, Gwalier and Raipur. As per management they are not looking for any acquisition in the print segment, however they are looking for acquisition in radio segment.

Other Highlights: The company reported 10% growth in commercial ad YoY. The ad realization growth was 3-4% in H1FY18. The newsprint cost is expected to increase by 6-7% in FY18 vs earlier guidance of 4-5% because of closure of the one newspaper print facility till the end of FY18. Management expects cover prices to remain stable in Bihar.

ICICI Securities Ltd | Retail Equity Research Page 5

Valuation The print remains of the weakest segment in terms of recovery tailwinds as localised advertisement coupled with key segment such as local advertisers as well as retail remains subdued. Moreover, Jagran’s key market has seen tepid government ad spending coupled with increased competitive intensity in terms of cover pricing. We also note that Jagran’s performance vis-à-vis regional print peer remains mixed (reported a muted print ad growth ~0.3% YoY vs. DB Corp which reported relatively better growth of 6.1%YoY and HMVL has reported de-growth of 7.7%, respectively). We believe that print ad recovery is likely to be a gradual affair. We downgrade the stock to HOLD rating with a target price of | 185 on the SOTP basis. We have valued the core business at 12x FY19E (20% discount to the peer DB Corp) earnings as Jagran has been historically trading at a discount to DB Corp. We value radio business at 30x FY19E earnings.

Exhibit 5: SOTP based valuation Particulars FY19E PAT (| Crore) P/E (x) Amount (| Crore) Core Business 362 12 4341.2 Radio Business 66 30 1993.7 Jagran's holding into MBL 70.6% 1407.1 Targeted Market Capitalization 5748.3 No. of Shares Outstanding (Cr) 31.1 Per Share Value (|) 185 Core business includes print business and all other ex-radio revenues. Source: Company, ICICIdirect.com Research

Exhibit 6: Valuation Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE (| cr) (%) (|) (%) (x) (x) (%) (%) FY16 2079.2 3.9 10.7 33.6 15.9 9.6 19.6 21.8 FY17 2282.7 3.9 10.6 33.6 16.0 8.3 16.1 20.1 FY18E 2404.7 5.3 11.5 7.7 14.8 7.8 15.3 20.3 FY19E 2603.0 8.2 13.1 14.6 12.9 6.6 16.0 21.4 Source: Company, ICICIdirect.com Research

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Recommendation history vs. consensus estimate 250 100.0

200 80.0

150 60.0

(|) (%) 100 40.0

50 20.0

0 0.0 Nov-15 Jan-16 Mar-16 Jun-16 Aug-16 Nov-16 Jan-17 Apr-17 Jun-17 Aug-17 Nov-17

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date Event May-10 Acquires the print business of Mid-Day Multimedia, that owns the English language afternoon daily Mid-Day, in a cashless transaction. The acquisition gives the company entry into three languages - Gujarati, Urdu and English Jun-11 In a bid to cater to Gurmukhi-reading Punjabis, Jagran Prakashan launched its Punjabi daily Punjabi Jagran, on June 18. The 16-page daily is printed in Jalandhar and Ludhiana, and circulated across every district of Punjab Apr-12 Jagran Prakashan acquired Suvi Info Management (Indore), which owns the brand “Nai Dunia”. Nai Dunia is the third largest Hindi daily in Madhya Pradesh and Chhattisgarh (MPCG) market with a revenue of ~ | 100 crore and EBITDA loss of | 25 crore in FY11 Dec-12 Raises | 150 crore through non-convertible debentures FY13 EBITDA margin contracts to 19.4% owing to aggressive growth strategy by the company, which took a toll on its profitability Jan-14 Company completes buyback of about 50 lakh equity shares for total consideration of about | 47.5 crore FY14 Company completes merger of Nai Duniya into its financials Jun-15 Jagran completes acquistion of Radio City, which has about 20 radio stations across seven states Sep-15 Jagran buys 11 frequencies in Phase 3 auction at an outlay of | 62.6 crore.

Source: Company, ICICIdirect.com Research

Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) (in %) Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 1 Jagran Media Network Investment Pvt. Ltd. 30-Sep-17 60.63 188.8 0.0 Promoter 60.76 60.76 60.76 60.85 60.85 2 HDFC Asset Management Co., Ltd. 30-Sep-17 8.80 27.4 5.3 FII 15.68 15.35 14.31 14.54 10.54 3 Franklin Templeton Asset Management (India) Pvt. Ltd. 30-Sep-17 6.32 19.7 1.6 DII 12.59 12.43 11.98 11.44 13.96 4 ICICI Prudential Life Insurance Company Ltd. 30-Sep-17 4.86 15.1 0.9 Others 10.97 11.46 12.95 13.17 14.65 5 Franklin Advisers, Inc. 31-Aug-17 3.71 11.5 0.0 6 NTAsset (Cayman) Ltd. 30-Jun-17 3.45 10.7 -0.8 7 DSP BlackRock Investment Managers Pvt. Ltd. 30-Sep-16 1.44 4.5 2.5 8 ICICI Lombard General Insurance Company Ltd. 30-Sep-17 1.42 4.4 4.4 9 Pari Washington Company Pvt Ltd A/c Pari Washington India Master30-Sep-17 Fund Lt 1.34 4.2 4.2 10 Pari Washington Co., Pvt. Ltd. 30-Jun-17 1.34 4.2 0.0

Source: Reuters, ICICIdirect.com Research

Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares HDFC Asset Management Co., Ltd. +14.54M +5.31M NTAsset (Cayman) Ltd. -2.39M -0.84M ICICI Lombard General Insurance Company Ltd. +12.13M +4.43M UTI Asset Management Co. Ltd. -0.61M -0.22M Pari Washington Company Pvt Ltd A/c Pari Washington India Master+11.45M Fund Lt +4.18M DHFL Pramerica Asset Managers Private Limited -0.35M -0.13M Franklin Templeton Asset Management (India) Pvt. Ltd. +4.40M +1.61M Baroda Pioneer Asset Management Company Limited -0.11M -0.04M Comgest S.A. +3.14M +1.15M Dimensional Fund Advisors, L.P. -0.07M -0.02M

Source: Reuters, ICICIdirect.com Research

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Financial summary Profit and loss statement | Crore Cash flow statement | Crore (Year-end March) FY16 FY17 FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E Total operating Income 2,079.2 2,283.0 2,404.7 2,603.0 Profit after Tax 349.8 347.7 356.7 408.7 Growth (%) 17.5 9.8 5.3 8.2 Add: Depreciation 121.9 128.9 134.7 130.1 Raw Material Expenses 628.7 652.5 683.2 748.0 Add: Interest Paid 54.5 35.0 28.7 9.2 Employee Expenses 322.7 374.0 399.8 420.3 (Inc)/dec in Current Assets -87.1 -94.2 -39.3 -34.5 Administrative Expenses 537.4 617.0 665.3 702.8 Inc/(dec) in CL and Provisions -153.1 174.7 26.7 43.4 Other Expenses 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 Total Operating Expenditure 1,488.8 1,643.5 1,748.3 1,871.0 CF from operating activities 286.1 592.1 507.5 556.9 EBITDA 590.4 639.5 656.4 731.9 (Inc)/dec in Investments 0.6 -172.2 -130.0 -130.0 Growth (%) 31.0 8.3 2.6 11.5 (Inc)/dec in Fixed Assets -750.6 -129.5 -80.0 -80.0

Depreciation 121.9 128.9 134.7 130.1 Others -38.4 248.7 2.2 2.7 Interest 54.5 35.0 28.7 9.2 CF from investing activities -788.4 -53.0 -207.8 -207.3 Other Income 49.9 41.2 48.6 50.0 Issue/(Buy back) of Equity 1.9 0.0 -3.1 0.0 Exception Items -44.0 0.0 0.0 0.0 Inc/(dec) in loan funds -33.1 -381.4 -100.0 0.0 PBT 507.9 516.8 541.6 642.6 Dividend paid & dividend tax 0.0 -133.9 -182.2 -182.2 MI/PAT from associates 0.9 1.6 13.2 20.0 Interest Paid 54.5 35.0 28.7 9.2 Prior Period Items 0.0 0.0 0.0 0.0 Others 36.0 240.1 -57.4 -18.3 Total Tax 157.2 167.5 171.7 214.0 CF from financing activities 59.3 -240.2 -314.0 -191.4 PAT 349.8 347.7 356.7 408.7 Net Cash flow -442.9 298.9 -14.3 158.3 Adjusted PAT 319.5 347.7 356.7 408.7 Opening Cash 493.1 50.2 349.1 334.8 Growth (%) 28.4 8.8 2.6 14.6 Closing Cash 50.2 349.1 334.8 493.1

Reported EPS (|) 10.7 10.6 11.5 13.1

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

Balance sheet | Crore Key ratios (Year-end March) FY16 FY16 FY18E FY19E (Year-end March) FY16 FY17 FY18E FY19E

Liabilities Per share data (|) Equity Capital 65.4 65.4 62.3 62.3 EPS 10.7 10.6 11.5 13.1 Reserve and Surplus 1,565.6 2,089.5 2,264.1 2,490.6 Adjusted EPS 9.8 10.6 11.5 13.1 Total Shareholders funds 1,631.0 2,154.9 2,326.3 2,552.8 BV 49.9 65.9 74.7 82.0 Total Debt 514.8 133.4 33.4 33.4 DPS 0.0 4.1 5.9 5.9 Others 227.5 450.4 452.6 455.3 Cash Per Share 1.5 10.7 10.8 15.8 Total Liabilities 2,373.3 2,738.7 2,812.3 3,041.5 Operating Ratios (%) EBITDA Margin 28.4 28.0 27.3 28.1 Assets PBT / Total Operating income 22.5 22.4 21.7 23.1 Gross Block 2,001.6 2,131.1 2,211.1 2,291.1 PAT Margin 15.4 15.2 14.8 15.7 Less: Acc Depreciation 766.3 895.2 1,029.9 1,160.0 Inventory days 11.7 15.0 15.0 15.0 Net Block 1,235.3 1,235.9 1,181.2 1,131.1 Debtor days 78.6 82.5 82.5 78.4 Capital WIP 0.0 0.0 0.0 0.0 Creditor days 14.6 23.5 23.5 23.5 Total Fixed Assets 1,235.3 1,235.9 1,181.2 1,131.1 Return Ratios (%) Investments 356.7 528.9 658.9 788.9 RoE 19.6 16.1 15.3 16.0 Goodwill 337.7 337.7 337.7 337.7 RoCE 21.8 20.1 20.3 21.4 Inventory 66.9 93.5 98.5 106.6 RoIC 30.1 25.9 26.6 31.2 Debtors 448.0 515.8 543.3 558.7 Valuation Ratios (x) Loans and Advances 76.1 64.7 68.2 73.8 P/E 15.9 16.0 14.8 12.9 Other Current Assets 50.1 61.3 64.6 69.9 EV / EBITDA 9.6 8.3 7.8 6.6 Cash 50.2 349.1 334.8 493.1 EV / Net Sales 2.7 2.3 2.1 1.9 Total Current Assets 691.3 1,084.4 1,109.4 1,302.2 Market Cap / Sales 2.7 2.4 2.3 2.1 Creditors 83.2 146.7 154.5 167.3 Price to Book Value 3.4 2.6 2.3 2.1 Provisions 178.5 287.6 303.0 327.9 Solvency Ratios Other Current Liabilities 63.5 65.6 69.1 74.8 Debt/EBITDA 0.9 0.2 0.1 0.0 Total Current Liabilities 325.2 499.9 526.6 570.0 Debt / Equity 0.3 0.1 0.0 0.0 Net Current Assets 366.1 584.5 582.8 732.1 Current Ratio 2.0 1.5 1.5 1.4

Other non Current Assets 77.5 51.7 51.7 51.7 Quick Ratio 1.8 1.3 1.3 1.2

Application of Funds 2,373.3 2,738.7 2,812.3 3,041.5 Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

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ICICI Securities Ltd | Retail Equity Research Page 8 ICICIdirect.com coverage universe (Media) CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company (|) TP(|) Rating (| Cr) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E DB Corp (DBCORP) 368 395 Hold 6,775 20.4 22.0 26.4 18.1 16.7 14.0 10.4 9.4 7.7 32.2 31.0 31.9 23.5 22.2 22.8 DISH TV (DISHTV) 77 75 Hold 8,234 1.0 0.5 1.5 75.4 156.0 52.4 9.3 9.3 8.0 20.8 17.4 24.4 22.3 9.8 22.5 ENIL (ENTNET) 772 850 Hold 3,679 11.6 11.4 23.1 66.7 67.7 33.4 29.3 25.7 16.8 9.3 8.6 15.3 6.4 5.5 10.9 HT Media (HTMED) 97 100 Hold 2,268 7.3 10.2 10.0 13.3 9.5 9.7 9.9 7.0 6.0 10.9 12.0 12.2 7.6 9.6 8.7 Inox Leisure (INOX) 264 335 Buy 2,535 3.2 7.6 11.0 82.8 34.7 24.1 19.5 13.1 10.2 7.3 13.7 16.7 5.5 11.7 14.4 Jagran Prakashan 170 185 Hold 5,285 10.6 11.5 13.1 16.0 14.8 12.9 7.9 7.4 6.3 20.1 20.3 21.4 16.1 15.3 16.0 PVR (PVRLIM) 1,398 1,440 Hold 6,533 20.5 27.4 37.4 68.2 51.0 37.4 20.3 18.2 14.6 13.7 15.6 18.3 10.2 11.9 14.0 Sun TV (SUNTV) 852 960 Buy 33,587 26.1 29.3 36.9 32.6 29.1 23.1 18.2 16.1 12.7 37.2 38.0 41.4 25.6 26.0 28.4 TV Today (TVTNET) 372 370 Hold 2,222 18.1 19.8 24.6 20.6 18.8 15.1 11.9 9.0 7.2 24.7 27.0 26.7 16.3 17.8 17.6 ZEE Ent. (ZEEENT) 544 565 Hold 52,246 23.1 16.2 18.2 23.5 33.6 29.9 25.1 23.5 18.7 21.2 22.5 23.3 15.0 14.9 15.4 Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 9 RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

ICICI Securities Ltd | Retail Equity Research Page 10 ANALYST CERTIFICATION We /I, Bhupendra Tiwary MBA, Sameer Pardikar, MBA Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com.

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securitiesis is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.

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ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.

ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report.

It is confirmed that Bhupendra Tiwary MBA, Sameer Pardikar, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.

Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.

It is confirmed that Bhupendra Tiwary MBA, MBA Sameer Pardikar, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

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