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Deccan Chronicle + Jagran Prakashan Result Analysis

January 30, 2008

Deccan Chronicle Holdings: DCHL’s 3Q FY08 net profit was up 112%, driven by 48% sales growth and a 1,700bp margin expansion. Advertising revenues grew 46%, while circulation revenues grew 5%. The EBITDA margin of 65% was the strongest ever as DCHL continues to benefit from low raw material prices and an appreciating rupee.

DCHL has won the bid for the IPL’s 10-year Hyderabad franchise for US$107m. Management has indicated breakeven or a modest profit in FY08 for IPL, but our base-case estimates for sponsorship revenues call for a loss of Rs80m in FY08 and FY09.

Jagran Prakashan: Advertising revenue growth of 29% in 3QFY08 was driven by an increase in the advertising space on the back of new edition launches (I-Next and CityPlus) as well as ad-rates hikes undertaken last year.

Newly launched bilingual newspaper format I-Next, which now operates through 6 editions, has gained the number two position in the cities of Kanpur and Varanasi. Jagran’s 50:50 JV with Network18 is set to launch India’s first Hindi language business daily, which will be followed by other language business dailies.

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