Citigroup has initiated coverage on Deccan Chronicle and Jagarn Prakashan with a BUY Rating. DCHL publishes the fourth-largest selling English newspaper in India and has leadership in the state of Andhra Pradesh. After Chennai, DCHL will expand into the Bangalore market, which will give it a strong foothold in South India.
DCHL is the most leveraged play on Indian print media. Its superior business model rests on: heavy advertising skew which should be sustainable as advertising revenues grow at a 25% 3-yr CAGR; strong profitability (>2x that of listed peers) due to a lean fixed-cost base; and exposure to the English print market, which has higher ad yields. (more…)
