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. DCHL trades at a P/E of 14. • • • • .Deccan Chronicle Holdings Ltd.275 (16x FY09E EPS).2x of its FY08 and FY09 earnings.191.2 bn cash & cash equivalents as on H1FY08.2% respectively as on FY07 backed by strong ad rates and lower operating cost & lower newsprint cost. We initiate “BUY” recommendation with a 12 months price target of Rs. Investment Positive • • Fastest growing print media company: expected to register a revenue CAGR growth of 37. Securitization of receivables & Cash rich company: Rs 7.1% over FY07-09 Highest EBITDA & PAT margins of 46. Lower capex in coming years to boost profitability further Value unlocking in subsidiaries: Odyssey India & Sieger Solutions Ltd. At the CMP of Rs.

• • . 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. 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.Deccan Chronicle Holdings Ltd. Changing demographics & lifestyles . 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.

• • • .50.000 copies per day as on H107. DCHL also holds 90% stake in Asian Age Holdings Ltd. having a circulation of around 9.02 mn with 173 stores by the end of FY09 DCHL formed a 100% subsidiary “Sieger Solutions Ltd. Entered into retail with 100% acquisition of Odyssey India Ltd. Company Background • • Leading English daily newspaper in Andhra Pradesh & Tamilnadu.Deccan Chronicle Holdings Ltd. in sep’2005. which is growing at a healthy pace and is expected to reach a total space of 5.” in 2006 with an objective to become the sales agent for DCHL & to make a foray into new media businesses like internet & online portals. 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.

9% in FY08 & FY09 respectively backed by higher realization.Deccan Chronicle Holdings Ltd. lower newsprint cost & cost efficiencies.5% & 40.1% & 61.6% & 63.3% respectively over FY07-09 EBITDA margins are expected to expand to 62.4% in FY08 and FY09 from the current level of 29.2% during FY07. PAT margin is expected to increase to 38. ROCE and ROE are expected to improve to 39% and 31% respectively in FY09 driven by lower capex in coming years and margins expansion. • • . Financials • • Revenues and net profit are expected to report CAGR growth of 37.

308.5 29.3 18.9 EBITDA margin % 31.7% 34.8 8.6 1.1 52.9 Sales% Growth 99.6 63.8 5.1 P/E 64.6 13.9 22.2 17.Deccan Chronicle Holdings Ltd.4 5.0% 22.7 P/BV 12.5 4.527.0% EV/ EBITDA 11. Financials (Contd…) Year FY06 FY07 FY08E FY09E Net Sales 3.8 5.5 11.9 PAT 678.7 62.2 4.8 8.0 6.2 .8% 39.8 67.197.454.6 10.5 46.2 14.252.7 ROCE (%) 16.613.0 3.1 EPS (Rs) 3.6 3.388.

5% 13.5 12.05 29 HT Media* FY08E 12794.2 31.6% 6.6 5291.5% 2187.8 FY09E 10388.2 30.3 19.6% 3252.4 26.2 22.55 22.65 16.15 675.0 39.5 14.5 62.2 24.5% 1617.5 32.9 DCHL FY08E 8454.8 28.8 20.5 34.2 2627.9% 4197.Deccan Chronicle Holdings Ltd.2 191.4% 17.4 1916.1 25.3 2601.2% 1161.35 FY09E 9662.4 14.3 209.0 .95 14.9 6638.1 63.5 22.65 24.3 675.1 191.2 38.7% 19.7 40.9 209. Valuation Matrix Jagran* FY08E Revenues EBITDA EBITDA% PAT PAT% EPS CMP(as on 30/10/07) P/E x ROE% ROCE% 7905.1 35.8 3422.4 11.55 FY09E 15209.3% 26.9 22.0 21.1 26.4% 9.9% 1576.

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

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