Q3 Growth Better Than Expected
He went on to state that the quarter-three number turned out far better than the expectations. Agarwal credited the government’s measures of implementing pay commission and investing in the rural economy that led to improved consumption this year.
He added that the boost in consumption in the current year was mainly on account of both containment of inflation and income growth. However, Agarwal anticipates consumption pick-up next year to be largely driven by growth in income.
Future of print remains bright
Meanwhile, Agarwal has a positive outlook for the print industry despite a fast-evolving digital media. He explained that the print industry has grown based on the comparison of what it was five years ago and what it will become five years from now. According to Agarwal, the growth of digital media will be higher but relatively lower than what it had shown over the last four years. On the flip side, Agarwal brushed off the growth concerns that print industry may face as a result of burgeoning digital media.
He went on to explain that every media platform is necessary and complements each other. He pointed out to the total media entertainment spend that is still hovering around 0.35% - 0.4% of India’s GDP, lower than the global average of 1%. Resultantly, Agarwal is firm that there is nothing of concern about media platform in the country. He added that there has not been any hard-core evidence to show that people are shifting from print to digital platforms.
It is to be noted that the company is progressing towards establishing a radio network, comprising of 39 stations fright after the radio auctions as Agarwal reiterated their expansion plans. He concluded stating that the company is targeting 15% growth over the next five years.
Acquisition of Radio City with frequencies in top metros and print business in tier 2 and 3 cities provides the right balance to JPL. The stock trades at Ev/Ebitda of 11x. Healthy dividend payout and reasonable valuations back our positive stance on the stock. Maintain accumulate.