Jagran Prakashan: Wealth Creation by Better Capital Allocation

We had recommended Jagran Prakashan on 22Mar18 with the report titled Jagran Prakashan: Numero Uno in Print Media. Below is the small update on the same.

On 24th April 2018, Jagran Prakashan board has approved the buyback of 1,50,00,000 (1.5 crores) equity shares at a price of Rs.195 per share under tender offer method. This represents 4.82% of total outstanding equity capital. Being a high cash generating company and having good cash surplus on balance sheet, Jagran Prakashan will utilize Rs.292.50 crores to buyback its own shares from its internal accruals and will not have to borrow funds in any form for paying the buyback consideration. On the procedural front, Jagran Prakashan has sought the approval of shareholders for buyback of shares through the special resolution.

Good Capital Allocation: As mentioned in our earlier report, Jagran Prakashan consistently generates a large surplus of cash every year and has shown capacity to utilize it well for its shareholders by deploying the surplus funds either for acquisition / expansions or for retiring the most expensive source of fund i.e. owners fund by launching buyback.

The proposed buyback is in line with the good capital allocation strategy that the company has been following.

Past Buyback Data:

 

 

 

 

Past Acquisitions and Expansions:

 

 

 

 


Dhruvesh Sanghvi is a Research Analyst registered with SEBI having registration No: INH000000875.
Definitions of Rating system:
1. Explanation of Type of Report 
  • Fresh Recommendation Reports: These reports are first-time initiation reports on the concerned stock. Usually, these reports are followed by updates on the same.
  • Update Reports: These reports include result update, event updates, annual report analysis and/or any other information that may be useful for the investor in relation to the concerned stock. Most of these update reports will have our current view on the same.
2. Explanation of Time Horizon: All the Fresh Recommendation reports in the investing section have a view of 3-5 years.
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  • Buy: This means buying the concerned stock at current market price.
  • Buy on Dips: This means buying the concerned stock on the explained fall in price.
  • Hold: This means holding the concerned stock until further update.
  • Sell Partial: This means selling half of the existing position in the concerned stock.
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4. Explanation of Indicative Target Price: Achievement of Target Price does not imply Exit / Sell Partial. We will explicitly release Exit/ Sell Partial Report at an appropriate time. If required, Indicative Target Price could be revised based upon business performance, market environment or any other important event.
DISCLOSURES by RESEARCH ANALYST UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 is as under: 
• Introduction: Prospero Tree Financial Services is an independent equity research proprietorship firm of Mr Dhruvesh Sanghvi.
• Business Activity: Prospero Tree Financial Services is committed to providing honest views, opinions, and recommendations on financial markets opportunities.
• Report Written by: Dhruvesh Sanghvi
• Disciplinary History: None
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• Details of Associates: Not Applicable
• Disclosure with regards to ownership and Material Conflicts of Interest:
1. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services, its associates, its Research analysts hold any position in the subject company.
2. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services, its associates, Research Analysts, nor its relatives, have more than 1% ownership of the subject company at the end of the month immediately preceding the date of publication of this report.
3. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services, its associates, Research Analyst nor its relatives, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance.
• Disclosure with regards to Receipt of Compensation: 
1. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services or its associates, or Research Analyst has received any compensation or other benefits from the subject company or the third party in connection with the research report in past twelve months.
2. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services or its associates, or Research Analyst have managed or co-managed public offering or securities for the subject company in past twelve months.
• Other Disclosures: 
1. The Research Analyst has not served as an officer, director, or employee of the subject c
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