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Deccan Chronicle Holdings Ltd.

‘Reset to print growth’ BUY

CMP 1 Year Target Price Expected Appreciation

Rs 191 Rs 275 44%

7% & 29. • • • • .5x & 11. Securitization of receivables & Cash rich company: Rs 7.2 bn cash & cash equivalents as on H1FY08. We initiate “BUY” recommendation with a 12 months price target of Rs. At the CMP of Rs.1% over FY07-09 Highest EBITDA & PAT margins of 46.191.2x of its FY08 and FY09 earnings. Lower capex in coming years to boost profitability further Value unlocking in subsidiaries: Odyssey India & Sieger Solutions Ltd.Deccan Chronicle Holdings Ltd. DCHL trades at a P/E of 14.2% respectively as on FY07 backed by strong ad rates and lower operating cost & lower newsprint cost. Investment Positive • • Fastest growing print media company: expected to register a revenue CAGR growth of 37.275 (16x FY09E EPS).

Indian print media is expected to grow at 13% CAGR during 2006-2011 & to reach a size of Rs 232 bn from its current size of Rs 128 bn. increasing literacy level and potential for higher ad spends as a percentage of GDP are expected to be the key growth drivers for Indian print sector.Deccan Chronicle Holdings Ltd. Changing demographics & lifestyles . • • . Industry • Indian entertainment & media sector is expected to report a CAGR growth of 18% and reach Rs 1 tn in 2011 from current size of Rs 437 bn in 2006.

000 copies per day as on H107. Company Background • • Leading English daily newspaper in Andhra Pradesh & Tamilnadu.” in 2006 with an objective to become the sales agent for DCHL & to make a foray into new media businesses like internet & online portals. having a circulation of around 9. in sep’2005. which is growing at a healthy pace and is expected to reach a total space of 5.50. DCHL entered Chennai region in 2005 in order to increase its spectrum & was successful in breaking the monopoly of “The Hindu” in a short span of one year. Entered into retail with 100% acquisition of Odyssey India Ltd. DCHL also holds 90% stake in Asian Age Holdings Ltd.Deccan Chronicle Holdings Ltd. • • • .02 mn with 173 stores by the end of FY09 DCHL formed a 100% subsidiary “Sieger Solutions Ltd.

• • .4% in FY08 and FY09 from the current level of 29.9% in FY08 & FY09 respectively backed by higher realization. Financials • • Revenues and net profit are expected to report CAGR growth of 37.6% & 63.Deccan Chronicle Holdings Ltd. lower newsprint cost & cost efficiencies.2% during FY07.3% respectively over FY07-09 EBITDA margins are expected to expand to 62. ROCE and ROE are expected to improve to 39% and 31% respectively in FY09 driven by lower capex in coming years and margins expansion.1% & 61.5% & 40. PAT margin is expected to increase to 38.

9 EBITDA margin % 31.4 5.388.6 63.8 8.9 PAT 678.9 Sales% Growth 99.1 EPS (Rs) 3.3 18.6 1.8 5.7 62.7 ROCE (%) 16.8 67.2 .6 10.9 22.308.2 17.0% 22.5 46.6 3.8 8.5 4.2 4.0 3.5 29.613.5 11.Deccan Chronicle Holdings Ltd.7 P/BV 12.252.7% 34.454.1 52.0 6.2 14. Financials (Contd…) Year FY06 FY07 FY08E FY09E Net Sales 3.197.8% 39.0% EV/ EBITDA 11.527.6 13.8 5.1 P/E 64.

8 3422.8 28.0 .65 16.1 25.1 63.5 14.5 32.9% 4197.5% 13.2 191.9 6638.4 11.3 2601.2% 1161.15 675.5% 2187.55 22.2 2627.3 209.55 FY09E 15209.9% 1576.8 FY09E 10388.9 22.9 209.Deccan Chronicle Holdings Ltd.5% 1617.0 39.2 38.3% 26. Valuation Matrix Jagran* FY08E Revenues EBITDA EBITDA% PAT PAT% EPS CMP(as on 30/10/07) P/E x ROE% ROCE% 7905.35 FY09E 9662.6% 6.2 30.4% 9.5 34.5 62.2 31.2 24.6 5291.95 14.7 40.5 22.1 35.8 20.7% 19.9 DCHL FY08E 8454.4% 17.4 1916.1 26.6% 3252.1 191.5 12.65 24.05 29 HT Media* FY08E 12794.2 22.4 14.3 675.3 19.0 21.4 26.

in Retail Sales Satish Pasari Networth Stock Broking Ltd.networthstock.co.com) .co. BUY Contact Persons : Institutional Sales Raj Bhandari / Rameshwar Singh D K Arora / Ninie Singh Networth Stock Broking Ltd. 022-30286405 Email : satish@nsbl. Deccan Chronicle Holdings Ltd. 022-22633020/1/2 Email : dealing@nsbl.in (For full report visit : www.Deccan Chronicle Holdings Ltd.