Jagran Prakashan rebounds from 52-week low on share buyback plan

The stock opened 5% higher at Rs 164 on the BSE after the company said its board scheduled to meet on Friday, 27th April, 2018 to consider the proposal for buy-back of shares.

Shares of Jagran Prakashan, publishers of ‘Dainik Jagran’ newspaper, have opened 5% higher at Rs 164 per share on the BSE on Wednesday after the company announced a share buyback plan. The stock closed at a 52-week low of Rs 156 on Tuesday.

“The board of directors of Jagran Prakashan is scheduled to be held on Friday, 27th April, 2018 inter-alia to consider the proposal for buy-back of shares,” the company said in a regulatory filing on Tuesday, after market hours.

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares).

In past one year, Jagran Prakashan has underperformed the market by falling 21% as compared to 17% rise in the S&P BSE Sensex till yesterday.

The company had reported 7% year on year dropped in its consolidated net profit at Rs 2,482 million for the first nine months ended December 2017. Operating revenues were up 2% at Rs 17,559 million over the same period last year.

Although there is a flat revenue and some de-growth in profits which is on account of the reasons beyond our control, some recovery has been seen in various discretionary spend sectors, real estate, BFSI and Education. Let us hope that these recoveries are sustained, said Mahendra Mohan Gupta, Chairman and Managing Director, Jagran Prakashan, while announcing December quarter results.

At 09:27 am; it was up 2% at Rs 160 against 0.11% rise in the benchmark index. A combined 363,647 shares changed hands on the counter on the BSE and NSE so far.