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Analyst Meet / AGM - Analyst Meet

Expects operating profit of Rs 590 crore for FY16

Jagran Prakashan

02-Dec-2015, 10:39

Jagran Prakashan (JPL) held analyst meet to discuss the strategic initiative and business outlook of the group. The meet was addressed by Mr. Shailesh Gupta - Director, Mr. R.K. Agarwal - CFO, Ms. Apurva Purohit - CEO, MBL (Radio City FM business)

Highlights of the meet:

Radio's footprint would expand to 200+ cities from 90 cities on completion of the second part of phase III auctions. This would boost radio's reach, help it better compete with print and television and drive ad market share gains for radio.

For radio industry, presently there are 10000 advertisers in 81 cities. The mgmt expects advertisers can go up to 30000 - 40000 after phase III.

The mgmt said that radio industry will grow in size in coming future and it will have 8-9% share in total advertisement revenue.

Radio City currently has 45 mn listeners.

Radio City garners 25% ad share in its markets (20 cities) and ~10% share in overall radio ad spends. Its reach will extend to 39 more cities in FY17 as it launches in 11 new cities and integrates 8 cities of Radio Mantra. The radio business would contribute 12% to Jagran's revenues in FY17.

Radio City contribution to consolidated operating profit was 15% in Q2.

Internet radio has 7.5 mn listeners.

Radio City rank no. 2 on consolidated basis across country.

The mgmt guided operating profit of Rs 590 crore for FY16 and 15-16% operating profit growth in FY17. The mgmt indicated that its OPM can improve by 300-400 bps to 32-33% if print ad revenue growth accelerates led by a pick-up the economy.

The mgmt said that ad revenue growth has been healthy in the December quarter so far. For print business, 75-80% revenue will continue come from advertisement.

FY17 will see sharper improvement in PAT with fall in interest cost and tax rate coming down.

UP contributes close to 50% to Jagran's ad revenues

On Digital business the mgmt said that no one in media and entertainment industry know how to monetize from content. However, the company will focus on digit business but spend will be cautious. It has rope in consultant for digital business.

The capex for FY17:- Rs 50-60 crore for print business and Rs 20 crore for radio business.