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Edited Transcript of JAGRAN.NSE earnings conference call or presentation 14-Nov-19 6:30am GMT

Q2 2020 Jagran Prakashan Ltd Earnings Call

Kanpur Dec 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Jagran Prakashan Ltd earnings conference call or presentation Thursday, November 14, 2019 at 6:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Rajendra Kumar Agarwal

Jagran Prakashan Limited - CFO

* Sanjay Gupta

Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director

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Conference Call Participants

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* Abneesh Roy

Edelweiss Securities Ltd., Research Division - SVP

* Ankit Shah

White Equity Investment Advisors - Investment Advisor

* Depesh Kashyap

Equirus Securities Private Limited, Research Division - Research Analyst

* Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst

* Mohit Khanna

Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research

* Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst

* Sarvesh Gupta

Maximal Capital - Founder

* Sneha Jain;SKS Capital & Research Pvt Ltd;Analyst

* Vaibhav Badjatya

Honesty and Integrity Investment - Founder

* Yogesh Kirve

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day and welcome to Jagran Prakashan Limited Q2 FY '20 Earnings Conference Call.

This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict.

(Operator Instructions)

Please note, this conference is being recorded.

I now hand the conference over to Mr. R.K. Agarwal, CFO, Jagran Prakashan Limited. Thank you, and over to you, sir.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [2]

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Dear friends, we welcome you to the conference call for the quarter ended 30th September 2019.

As you all know, the economy has somewhat deteriorated in Q2. But we continued to work hard to contain the de-growth in print and radio revenues, which was the lowest amongst the peers. We also kept at near 0 cost inflation excluding raw materials. Efforts of Music Broadcast Limited are, in particular, notable, as it could significantly reduce the cost at the time of the strong headwinds, and report operating margins of 30,%, which would improve only with the growth in revenues coming back.

Dear friends, you may also like to make a note of the fact that the performance of Music Broadcast Limited once again proves the point that focus on core business take and make the difference when the chips are down. This would also remind you of the fact that, that -- our strategies for radio in Phase 3 are going for geographical expansion as against multiple frequencies was a very prudent strategy, and this is what has helped us in reporting lower de-growth in difficult times than our closest peer. These efforts have paid a dividend overall, and we could mitigate the impact of downturn.

In Q2, there was some impact of newsprint price reduction. But in Q3 and Q4, the benefit will increase significantly, which, in turn, will improve margins and profits. Amongst the [breaker] brands, Naidunia had the steepest de-growth primarily because it had in its base included revenue from MPCG elections. But for this de-growth, our growth in advertisement revenue from print, which is less than 4% and much lower than any of our peers, would have been still lower. On the contrary, I-Next had robust growth in revenue, especially advertisement revenue.

Festive season is over. But unfortunately, it was way below expectations. However, in run-up for festive season, Q2 benefited a bit on account of increased ad spend by auto industry, which had, in this quarter, less than 3% de-growth as against 30% de-growth in Q1. The state governments' spend was also higher. So that overall revenues from government has given us a growth of nearly 15% on Y-o-Y basis, which is heartening. But central government has not yet started to spend on expected lines, nor it is expected that there will be an improvement worth mentioning, at least in the current fiscal. This [is why] it is difficult to be printing in an economically difficult environment, but we are working hard to recoup as much as possible. However, we are hopeful of reporting better results for the current year at the back of cost control, fall in newsprint prices and tax rate cuts.

As far as balance sheet is concerned, we continue to strengthen the same and have reduced the debt to negligible level at group level, with net cash and liquid assets worth nearly INR 400 crores as at the end of the second half.

We now open the floor for discussion.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

We have a first question from the line of Abneesh Roy from Edelweiss.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [2]

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Sir, whenever advertising slowdown happens, print companies are more focused on the circulation. And now with the newsprint prices correcting further in second half, will you have the conscious strategy of increasing circulation so that there could be some benefit on the advertising front also?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [3]

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Mr. Roy, our CEO will explain and throw light on this. But prior to that, let me clarify. In fact, these are difficult times. Correlation between the circulation and advertisement revenue or correlation of readership with the advertisement revenue, both have got lost. In fact, if one were to pay for the readership and the circulation, which Jagran had, probably Jagran would have had 30% more advertisement revenue than anybody else.

Now I would request you to throw light on it, on future (inaudible).

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [4]

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So Agarwal really captured the essence of the industry that it is not exactly leadership in circulation. It is the perception of the brand and how advertising agencies view language barriers compared to [whether we say] English, where our lower leadership gets away with a much higher cost per thousand.

Having said that, yes, low pricing of newsprint is a very compelling thought to start increasing circulation. But then, as we have been always emphasizing, that our circulation growth is always focused towards markets where we see a potential of monetizing advertising very fast. So currently, there are no greenfield projects in our pipeline. So for the next quarter, 2 quarters or even 1 or 2 years, for that matter, and we are operating at optimal circulation levels. Few markets are there we operate at a little below par, and we may focus on those areas. But they entirely depend on the scale of monetization that we can actually foresee going forward.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [5]

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Sir, that was useful. My question was also on the cover price. In the past, we have seen a higher increase or some increase...

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [6]

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So Jagran is probably the only -- one of the major publishing groups which always focuses on increasing cover pricing, and we are still maintain -- we still maintain that there is a huge headroom in increasing cover pricing. But then, as a publishing house, we will only increase cover pricing if competitors have made -- we may increase cover pricing towards -- marginally more than the competitor but not outprice ourselves so that we lose circulation.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [7]

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Absolutely right. And in any case, let me also clarify, our management is really mindful of the fact that we do not lose our market position in any of the key markets, which we have not.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [8]

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In terms of advertising in your key markets, what would have been the industry growth rate, any idea? Because you would be doing that differently to benchmark. Any trends -- what would have been the growth in each state, if you can clarify?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [9]

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Industry growth, if you talk about sectors, no one has grown.

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [10]

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Yes. No one has grown.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [11]

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No one has grown. So there is no growth. Forget about the print industry. Talk of any other industry also, I mean, like if something -- giants have grown by 1% or 2%, the smaller ones have de-grown. So really, there is a challenge as far as the growth in the total advertisement pie is concerned. If you talk about digital also, right, forget those transaction -- the size -- gaining size, et cetera. But that size, relating to the news and current affairs, they are also not growing.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [12]

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Right. And sir, Q2 GDP growth rate most likely will be lower than even the Q1 -- Of course, volume Q2 data number is already out. My question is, is your take on the economy -- is it in any more positive versus, say, earlier? Why I'm asking this is we have seen liquidity improve. Government has taken a lot of steps. So will Q4 be a quarter wherein I think recovery will start for you, advertising in general? Or it will be more FY '21?

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [13]

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Advertisement revenue growth comes within that when there is a cloud of overall economic growth. So it is difficult to say that the growth to us would come back in Q4 or growth to media industry would come back in Q4, right? I would say safely, it is 2021 which we should look at.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [14]

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And sir, last one, bookkeeping question on tax out-go for this year. Now the new corporate tax rate cut has come so, and you've got some write-offs. So how much would be the tax out-go we should build in our model for FY '20?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [15]

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Yes. Abneesh, for Jagran, it is going to be 25.17%, right? And for MBL, it is going to be 29%. They have not availed this option because they have a map which is to be utilized. But for Jagran, there is no benefit which we are losing. And therefore, we have opted for that option. For the current year, however, tax rate would be much lower than 25% because we had a steep -- we had a very huge amount of deferred tax liability in the beginning of the year, which is giving us a benefit of nearly INR 30 crore to INR 40 crore in the current year.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [16]

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Okay. So we should adjust that INR 30 crore, INR 40 crore to the 25% number?

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [17]

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Yes. Correct.

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Operator [18]

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We have the next question from the line of Gaurav Agrawal from Bowhead Investment Advisors.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [19]

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Sir, you mentioned some comments about the government's spending on advertising. I couldn't get that. Can you please reiterate that once again? What was the contribution from central and state and how it's been so far in Q3?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [20]

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What I mentioned was state government's spend was higher, so that overall revenues from government had a growth of nearly 15% on a Y-o-Y basis. So I would like the breakup of this, I'm not having revenue, but there is a clear de-growth in spend by central government.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [21]

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Yes, sir, it's fine. I'm worried obviously like central is 40% of your government expenditures. So like 20% of your advertising is government of which 40% is from central government.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [22]

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30% to 40% is the central, yes, 40% is the central.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [23]

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Okay. Okay. Got it. Sir, any indication from them in Q3 in the month of October?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [24]

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No, I was mentioning in my opening remarks, central government increasing the spend is a big question mark, right? So we are all gearing ourselves fast to recover as much as we can from other sources of revenue, which is, of course, difficult in a very economically difficult time. But this is how we have to lay this. We can't do much. And it is not only for us. It is across -- for all platforms. As you are seeing, even in case of radio, everybody is crying because for them, also, central government was a very, very significant revenue stream.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [25]

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Okay. Okay. Sir, my second question is pertaining to the newsprint cost. So in the given con call, you mentioned your next 3 quarters of newsprint cost estimate for consol. So like for Q2, you mentioned INR 147 crores. So what was the number for Q2? Is it a similar number?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [26]

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Q2? No. Q2, there is a fall on Y-o-Y basis of, I believe...

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [27]

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You mentioned INR 147 crores in Q1. For Q2 FY '20 pertaining to your newsprint cost on consol basis.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [28]

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On consol basis, we mentioned...

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [29]

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Or maybe you can just help me with whatever the newsprint cost was.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [30]

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2Q, -- we -- unlike for the current quarter, the newsprint cost is about INR 147 crore.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [31]

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Okay. Okay. And sir, for the next 2 quarters, for Q3, Q4, where do you see this ?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [32]

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It is going to be -- what I expect, it is going to be less by about INR 15 crore every quarter.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [33]

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Okay. So around INR 130 crore to INR 132 crore, is it?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [34]

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Yes, 1,000 -- between INR 132 crore, INR 135 crore.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [35]

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Okay. Okay. Sir, just one clarification. So consol newsprint cost for FY'19, it was around INR 690 crore, right?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [36]

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Yes.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [37]

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Okay. So do -- will we see a substantial benefit maybe...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [38]

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As I indicated in Q1 call, we are expecting total benefit in the range about INR 40 crore to INR 50 crore. So this is what I am expecting.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [39]

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But sir, the actual benefit comes out to be much higher than that. If you see the overall cost for newsprint was INR 690 crore and now you are indicating something like INR 570 crore kind of a number, so which is like INR 110 crore kind of a delta.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [40]

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No, INR 132 crore. And then last year, it was a INR 690 crores, you're right. But this year, we have already done INR 314 crore.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [41]

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INR 314 crore. Okay.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [42]

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We have already done nearly INR 314 crore, right?

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Unidentified Company Representative, [43]

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Yes. Yes.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [44]

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So that's for the next 2 quarters, if you say INR 270 crores, then how much it is? INR 620 crores, approximately.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [45]

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Yes. INR 584 crores. INR 584 crores: INR 314 crores -- INR 300 crores and INR 314 crores you did in Q1 and Q2. INR 270 crores you were going to do in the next 2 quarters, so that is INR 584 crores and...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [46]

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INR 584 crores. Like I said, INR 600 crore.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [47]

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Yes. So INR 100 crore kind of a benefit should come.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [48]

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INR 90 crore. INR 90 crore. INR 90 crore. INR 80 crore to INR 90 crore would come, but that is not entirely because of a reduction in prices. This, as I mentioned, is going to be about INR 50 crore to INR 60 crore. INR 25 crore, INR 30 crores will come on account of slightly lower circulation also.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [49]

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Okay. Got it. Got it. Sir, if I just squeeze one more question. So when you say INR 20 crore, INR 30 crore of lower circulation revenue, but I think, in the last 2 quarters, you have done flattish kind of a number for circulation. So are you expecting your circulation revenues to fall as...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [50]

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No. It will not fall. When you have seen the flattish revenue, that is already accounted for some falling circulation. We don't expect further fall in circulation.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [51]

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So it will maintain at INR 103 crore, INR 104 crore kind of a number?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [52]

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Yes.

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Operator [53]

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(Operator Instructions)

We have a next question from the line of Vaibhav Badjatya from HNI Investments.

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Vaibhav Badjatya, Honesty and Integrity Investment - Founder [54]

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So in terms of central government advertising, I believe you have indicated that the outlook is not quite good. And I think for current quarter also, you're not seeing any revival. But I just wanted to understand like what is the reason behind this sharp slowdown? Is it fiscal deficit or is it some other changes within central government as to how well they want to spend money? Or what is driving this slowdown so that we can assess when this can derive?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [55]

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So, clearly, we should also look at -- we could look at the government also. These days, if you look at any other corporate, whenever there is a pressure on profit, we reduce the added spend. In the same way, government has to manage their fiscal deficit as well. So unlike -- in the light of following elections, if we expect that they would increase any discretionary spend, probably that would be our mistake.

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [56]

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So let me also clarify here. That is because we are comparing quarter-to-quarter or even with last year. Last year, the government was going into an election mode. So it was spending through the roof. So there is now -- they have just formed a government, and ministries are taking shape, et cetera, et cetera. And there is a slowdown in economy. But the government spends are likely to pick up than anything the government wants to portray to the public. So if you see the government is still into a kind of a strategy mode, where we are wanting to come up with new things and announce them slowly.

So as and when the new government starts picking up public announcements and/or start unveiling public schemes, the spends are likely to go up, which are likely to go up probably by next year, as we -- Agarwal has said, that I expect the government spends to start slightly increasing after probably in the next financial year, not before that, because the government is just about, what, 5 months old. It seems not...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [57]

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So again, very, very important point the CEO has just made, we have to understand this also very, very clearly. We had a high rate because of the fact that the government was -- the government was going for election.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [58]

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Yes. Yes. Got it. And in terms of different ministries that is central government, any particular ministry which is not spending or it is across the board that is in central?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [59]

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Across the board, at the moment, on [variable], as Sanjay has mentioned, they have to make an announcement. They were satisfy that.

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Operator [60]

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We have next question from the line of Yogesh Kirve from B&K Securities.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [61]

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Sorry, needed a clarification again on the government spend. So the 15% growth, is it in the state government spend or the overall government spend?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [62]

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Overall government spend. It means state government in this quarter has driven much higher growth.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [63]

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Okay. And sir, any particular reason that we see -- I mean, for the bounce in the state government ad spend because I don't think there were any elections or anything out that was lined up during the quarter?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [64]

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There are reasons of -- in our areas of operation, a couple of states are -- were in a national mode.

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [65]

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Yes.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [66]

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Okay. Right. So this also indicates that are the nongovernment advertisements, I mean, the decline was sort of higher than what we have reported. Overall number decline was 4%, at least for corporate. So what was the nongovernment ad spend decline, if you can just confirm?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [67]

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On -- see, 15% when we say on the overall government ad spend, it amounts to 3% of overall growth, 2.5% to 3% growth. And on an overall basis, it's there is a 4% or 3.75% de-growth. On commercial, you can assume a de-growth of about 6% to 7%.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [68]

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Okay. Okay. This is helpful. Sir, secondly, in terms of number of copies, what's the trend on Y-o-Y basis?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [69]

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There was a de-growth, and that is a planned de-growth because we have taken increases in cover prices in line with our strategy, as the CEO has explained a few minutes ago.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [70]

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Is it possible to quantify, I mean, the amount of de-growth in copies?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [71]

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As I mentioned, 4% to 5%.

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Yogesh Kirve, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [72]

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4% to 5%. Right. And sir, can you just tell us what is the absolute number of copies that we have as of now?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [73]

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Let us not go in those details for strategic reasons.

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Operator [74]

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We have the next question from the line of Rushabh Dalal (sic) [Rushabh Sharedalal] from Pravin Ratilal Share And Stock Brokers.

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [75]

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I just wanted to know that your receivables as a percentage of revenue from 2016 to 2019, they have continuously increased. Like in 2016, it was 21.5%, your receivables, as a percentage of revenue, which has gone up to 22% in '17. And now it's almost close to 27%. Can you just explain as to what is the reason behind it? And why is there a problem in managing of that cash flow?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [76]

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It is concerning us also. But we have taken 3 years' data. I'll comment on that later, but you will kindly appreciate the efforts which have been made to bring it down on Y-o-Y basis, right? They have fallen, and we are continuously working on reducing them. Now when we talk about the reasons why we the debts have increased, clearly, there is an increase in debt because of delayed payments by government. It is only because of government that the debt has increased to this extent. There is no problem whatsoever as far as how much we'll get back is concerned.

Here, I would also like to mention that, because of delayed payments, as per company's policy, we had to provide for, in first half, nearly INR 15 crores for bad and doubtful debts. Out of which, nearly INR 10 crore to INR 11 crore relates to only government debt, and INR 3 crore to INR 4 crore is normal, this is not abnormal.

So -- and very, very nicely, you have taken data from 2016 because problem for all of us has started since then only, for the reasons which you know best.

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [77]

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And yes, I'd just like to squeeze in one more question.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [78]

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Here, you must also know the #1 thing, whenever we are calculating percentage, we tend to forget one very important thing. These debts include GST elements also, which was not there in 2016, right? So -- and in revenue, there is no GST included. So therefore, I would say this 21% has gone to 27%. Part of it has gone up because of inclusion of GST also.

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [79]

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But sir, how much percent of that would be impacted because of GST? And in 2016, it was 21.5%. And now it is 27%.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [80]

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That is what I'm saying. So 5% is on the total revenue. So entire data -- out of entire data, whatever debts are outstanding, if to work out 5% of that, delete it from the debtors and work out percentage. It may be 25%.

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [81]

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Okay. Okay. And if you could throw some light on the digital newspaper that you are working with. If you can give some light on it about the revenue and stuff.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [82]

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Not only digital paper we are working on, we have complete digital offerings ranging from health to fact-checking websites. And there's so many other news portals, and I would request you to throw light on that.

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [83]

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Can you just repeat your -- elaborate your question?

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [84]

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Yes, I mean what percentage of revenue comes from the digital mode? And how do you look the market in...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [85]

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In terms of revenues if you are talking, then that is arising and not (inaudible). Otherwise, in the first half, we have done nearly INR 50 crores of revenue from digital.

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Rushabh Sharedalal;Pravin Ratilal Share and Stock Brokers Ltd;Analyst, [86]

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Okay. Okay. And in the coming -- I mean, the second half of the year, I mean, how much do you expect?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [87]

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That it should be more.

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Operator [88]

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We have a next question from the line of Ankit Shah from White Equity.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [89]

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Sir, my first question is on the circulation numbers that are published by ABC. Sir, over the last 2, 3 years, the numbers suggest that our circulation is down from 43 lakhs, 44 lakhs in 2017 to about 34 lakhs in 2019. Sir, can you help us understand in which geographies this fall has largely come from? And what could be the reasons around it?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [90]

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Sorry. Let me correct my answer. Let me correct myself on digital revenues. I'm extremely sorry, I gave the figure of INR 50 crores. In fact, it [fell] INR 22 crores, INR 23 crores for the group for first half.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [91]

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Okay.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [92]

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Now please, can you repeat the question.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [93]

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Yes. Yes. Sir, circulation numbers, I have a question on that. Sir, the numbers published by ABC suggest that our circulation is down from about 43 lakhs, 44 lakhs in 2017 to about 34 lakhs in 2019. Sir, can you help us understand in which geography this fall has come from? And what would be the reasons attributable to the same?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [94]

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Figure of 43 lakhs, 44 lakhs, whatever you are telling, right, I'm a little confused with those numbers because there has never been a fall of 1 million copies. As I mentioned, we are down just by 4% to 5% as compared to last year. So I don't know the 43 lakhs, 44 lakhs is what. As I guess, if you are talking about the group circulation...

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [95]

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Yes. Yes.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [96]

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If you are talking about group circulation, it includes many brands. For example, it is Delhi Jagran. Then there is a variance called Delhi Jagran I-Next, right? Then number three is Naidunia. Number four is Punjabi Jagran. Then number five is Midday English, then Inquilab, then Midday Gujarati. So all these brands are there. All put together, we are way above 4 million copies, even now.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [97]

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Okay. All right. Sir, in your understanding, over -- even over last 2 years, our circulation cut has not been more than 10%, 12%.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [98]

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I never said that even 10%. As far as mother brand is concerned, our circulation may have grown by, say, in 2 years 5% to 6%, 2% of which has fallen in the current year and 5% to 6% maybe in 2 years.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [99]

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Okay. Okay. Got it. Sir, on the...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [100]

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Not all. It's strategic call in the light of increased newspaper costs and pressure on advertisement revenues, as you as an operator (inaudible).

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [101]

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Right. Right. Okay. Sir, on -- slightly, again, on this cover price hike. Sir, in Bihar market, have you been able to take any cover price hike? Or it's not -- you set a roadmap on that.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [102]

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No, not yet. It all depends on the new entrant. So we are very keen to take the increase in cover price hike, and we have taken also in certain areas. But we have not been able to take it to the desired extent.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [103]

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Okay. Okay. Sir, the last one is on the cash position post the acquisition of Big FM by MBL. Can you help us better understand the trajectory over the next 1 or 2 years on the cash payment? And how do we plan to manage the balance sheet? If you can give me some color.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [104]

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There is no question on -- as far as Jagran is concerned, there is no problem in managing the balance sheet at all, even post-RBNL, because we already have nearly INR 600 of cash -- INR 600 crores of cash as of today. And net of debt, we have over INR 400 crores.

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Ankit Shah, White Equity Investment Advisors - Investment Advisor [105]

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Sir, right. Considering that, are we going to kind of part-fund the acquisition? And from that perspective, wanted to understand more on the cash on the books piece. Sir, are we going to use this up or we are going to leave it on the books? Or how -- what's the plan around that?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [106]

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We are very clear as far as distribution to the shareholders is concerned, we are not going to compromise on that, number one. Whatever is the surplus cash net [with a deal] out of the IPO money, plus whatever is the accumulation on account of depreciation over past 3 or 4 years, that is what we will utilize for acquisition of RBNL. And the rest will be represented by the debt in the books of RBNL, which will be carried forward. RBNL is self-sufficient to subsidize that. So we have maybe that they need some assistance from MBL, but that assistance there also will not be granted beyond the amount of depreciation because that is the money that you cannot distribute in any case to the shareholders.

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Operator [107]

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(Operator Instructions)

We have next question from line of Mohit Khanna from Future Generali.

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Mohit Khanna, Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research [108]

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My question is related to the cash returned to the shareholders. I mean, what is your plan for share buyback, considering the share price has come off so much in the recent few months?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [109]

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Yes, it is good opportunity to do the buyback.

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Mohit Khanna, Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research [110]

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I mean, any plans? Or is there any Board resolution coming up in the upcoming meetings?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [111]

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At the moment, it will be premature to talk about this. But yes, it is very much possible and doable.

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Mohit Khanna, Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research [112]

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Because you're sitting on approximately INR 700 crores -- INR 750 crores-plus of cash on the book, and with net cash here also...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [113]

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See, otherwise, you cannot grow when one is spending the entire cash on buyback because there are limitations up to which you can buy, right? Of course, I'm like -- it will all depend on (inaudible) proposal also whether they would like to dilute at this stage or they would like to increase this at this stage. This is something which needs to be discussed with the promoter. So we are at least very clear. As I mentioned, Jagran has been making aggressive distribution to the shareholders, and Jagran will continue to do that so long as it does not need it in business. And as you have just mentioned, we do not have any green -- plan for any greenfield projects. So we can expect the aggressive distribution by Jagran to continue.

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Mohit Khanna, Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research [114]

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Okay, sir. Sir, my second question relates to the receivables. When you mentioned that because of -- because the receivables get dated, you write it off as...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [115]

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No. I make provision. I don't write off. I do not write it off till our last breath.

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Mohit Khanna, Future Generali India Life Insurance Company Limited - Sr. Manager of Equity Research [116]

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So you make -- also, you make provisions. Sir, can you please share your experience as how have you recovered some money and you made provisions in FY '18 and '19?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [117]

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'18 and '19 -- recovery in '19, '20, I think that, that may not be an appropriate question because given the fact that the money ends up with the government. From then, '18-'19, '19-'20, that was no different. Then the debt collections are not coming. Their budgets are as it is still. So, I mean, they were in no better position in '19-'20 to clear the '18-'19 debts. So it continues to be in the follow-up. Like that, we have not recovered some amount, but we are -- but at the same time, we have not recovered any significant amount for the simple reason why it got provided for.

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Operator [118]

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We have next question from the line of Sneha Jain from SKS Capital.

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Sneha Jain;SKS Capital & Research Pvt Ltd;Analyst, [119]

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Since my questions most have been asked, I wanted to ask a macro question. As in currently, due to the slowdown and everything, the real estate and the auto has been pushing a lot for the advertisement on advertisement front. What do you have to comment about that? Like how is the advertisement trend going on right now?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [120]

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Real estate is not advertising.

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Sneha Jain;SKS Capital & Research Pvt Ltd;Analyst, [121]

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And auto?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [122]

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Auto, as I mentioned in my remarks, in Q1, we had a de-growth of 13%, which went down to 2.5% in Q2. But let me tell you, auto industry is not yet out of the trouble. So the trend of what we witnessed in Q2 may not sustain in next 6 months.

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Operator [123]

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We have next question from the line of Sarvesh Gupta from Maximal Capital.

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Sarvesh Gupta, Maximal Capital - Founder [124]

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So sir, first question, I was going through the India Readership Survey. So they have done it for 2019 Q1 and 2019 Q2. And in their data, they have mentioned a 10% decline for Delhi Jagran from Q1 to Q2, while the same for Hindustan has been 15% decline. And Bhaskar and Amar Ujala have basically been at the same level. So if you can comment on that? Why -- what do you make sense of this data that they have given?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [125]

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It makes sense. We are not disputing those data at all. As you were mentioning in the beginning, we forecast our circulation readership market position in the key markets. So if someone has put their circulation in irrelevant markets or markets which are not mattering for revenue, we don't chase them, number one.

Number two, you must not forget, Bhaskar entered in to Bihar only, I think, second half of the last year. So a reflection of the new circulation takes time, which has got reflected in Q2.

Number 3, now, Jagran's variant, which is Delhi Jagran, I-Next, there you will see a very huge jump in readership. So now (inaudible) have further streamlined and started capturing the variant readership separately and more accurately. That is what would answer your question.

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Sarvesh Gupta, Maximal Capital - Founder [126]

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Understood, sir. And sir, for the -- from the balance sheet, so right now, you said INR 600 crore is the group cash. And against that, we have INR 200 crores of group debt.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [127]

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It should be less than INR 200 crore. I broadly said maybe from INR 550 crore, INR 600 crore, and debt is about, I think, INR 100 crore, INR 150 crore for the group.

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Sarvesh Gupta, Maximal Capital - Founder [128]

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For the group. And if we exclude the radio business, just for the print business, how much?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [129]

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For the print business, there is no debt whatsoever, except for INR 50 crore, INR 60 crore, and we have a cash of about INR 250 crore, INR 300 crore -- INR 300 crores.

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Sarvesh Gupta, Maximal Capital - Founder [130]

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Okay, sir. Sir, any plans on distribution till the end of this financial year?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [131]

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What do I say? Otherwise, I'm not authorized to comment about this till we go to the Board. That's it. But yes, we are more than pleased.

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Operator [132]

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(Operator Instructions)

We have next question from the line of Gaurav Agrawal from Bowhead Investment and Advisors.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [133]

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Sir, just a few clarifications. You mentioned that state government has done very well for you. So are those numbers still true for Q3? Do they continue to make good expenditure on the advertising even in Q3?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [134]

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In Q3 also.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [135]

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Okay. So -- and so in Q3, at least on that front, on the government side of the equation, we may not have to post any de-growth.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [136]

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That I cannot comment because, as I mentioned earlier, Q2 benefited from a couple of states' elections also, right? So in Q3 also, one of our states is going for election. In Q4 also, one of the states is going for election. So I would like -- ideally speaking, I should not expect any de-growth -- further de-growth in overall government spend for the year.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [137]

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Okay. And sir, how about the nongovernment expenditure? Can you just share your feeling to it? How are you seeing this Q3 or Q4 within your overall advertising expectations?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [138]

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If we don't talk any de-growth, we would be more than happy. But Q4 will have a challenge. Last year, Q4 had some election benefit. This will be the same this year.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [139]

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Okay. Okay. And sir, just last question, the other revenue, which includes the outdoor events business, it has declined by 20% Y-o-Y or INR 8 crore decline, not -- in the overall scheme of things, it's a small number.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [140]

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No, no. Let me explain about it to you.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [141]

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Very well. Actually, the Bangalore base thing and you have...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [142]

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No, no. Let me come back to that. Let me explain here. It has got 2 components. One is our Board, and the other is the event. In case of the event, we had already budgeted 40% less revenue this year because we wanted to focus on profitability, right, and which is what we have achieved. There is a complete turnaround in event, right? And as against loss, we had a profit business. That is one. So that is deliberate, right? Out of INR 8 crore, at least INR 3 crores, INR 4 crores has come on account of that. Balance INR 4 crore to INR 5 crore has come from the events, as you just mentioned, that is Bangalore, it is bad. But we are pretty hopeful that we'll recover this in next 6 months. In fact, October has gone very well for our Board.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [143]

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Okay. So sir, this INR 40 crore , INR 45 crore kind of figure, is it achievable for Q3, Q4? Or it will be lower, as you mentioned about the events business, which is like 2.5% of the revenue?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [144]

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Sorry, which INR 45 crore you said?

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [145]

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Sir, this INR 45 crore of quarterly run rate which we do for these -- the overall category other, will it -- can you...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [146]

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No, no. It is -- other, as far as other is concerned, that, that has now 3 components: one is outdoor, another is event, the third one is (inaudible), right? These are the 3 major ones, right? And that is what gives me a revenue of about INR 35 crores -- but that has given me revenue of about INR 35 crores in -- INR 37 crores in Q2, right?

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [147]

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Sir, I'm asking about -- I'm asking for your number expectations for Q3, Q4. Is it like INR 34 crores, INR 37 crores is the new normal or is it...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [148]

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No, no. I expect Q3, at least here -- as it is, otherwise, it is not evenly distributed. On this Q3, Q4 has better numbers. So I expect at least, in these 2 parts -- in these 2 quarters, INR 80 crores. What did you say (inaudible)?

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Unidentified Company Representative, [149]

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Yes, sir.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [150]

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In these 2 quarters, we will do in the outdoor and event about INR 80 crores.

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Gaurav Agrawal;Bowhead Investment Advisors Pvt Ltd;Investment Analyst, [151]

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Got it.

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Unidentified Company Representative, [152]

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Yes, yes. So, yes, near about.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [153]

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I mean, (inaudible) is included. (inaudible) is included in this. The outdoor event was (inaudible).

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Operator [154]

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So we have next question from the line of (inaudible) from Entrust Family Office.

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Unidentified Analyst, [155]

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This is Bhaskar. I mean, in your experience, have you seen a slowdown, this protracted kind of slowdown in the print media before?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [156]

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In 15-year time in the industry, I have not. Now CEO should tell you.

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Unidentified Analyst, [157]

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Okay. So that, Mr. Agarwal, actually leads us to the next question that -- I mean, is this a more structural thing that we are witnessing rather than something that the...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [158]

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I was expecting this. No structural change is happening because it is not happening to print only, it is happening to everything. Whenever it's analyzed, whichever the discretionary spend sector you talk about, it is happening to that. For this, discretionary spend factors, the kind of FMCG growth in volumes you are seeing, at least in India, you never expect it, right? In a country where you still you have 60%, 70% people who do not consume many of the basic things, and if you have FMCG volume growth line growing by (inaudible) 3% to 4% or 5% it has attained, which nobody would have expected, right? So there is no structural change at cash. If there is a structural change, it is structural change in the economics.

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Unidentified Analyst, [159]

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But Mr. Agarwal, you mentioned FMCG. But FMCG companies are reporting lower volume growth, yes, but significant ad expense reduction is not being reported. And even on the electronic media side, again, the ad revenue growth has come down. But they haven't dipped into the negative territory, which are...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [160]

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Have you looked at (inaudible) results, very recently, which have come out? Just look at renews, they have reported de-growth of 17%. And (inaudible), they have reported de-growth. (inaudible) so these channels which you are referring to, they have benefited from World Cup and (inaudible), right? And there also -- I mean, there cannot be any bigger (inaudible) than these, forget about a (inaudible) because we don't know the figure which is available in public. What reports in [GE] what kind of growth they reported, that is very, very low single-digit growth.

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Unidentified Analyst, [161]

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That's right. So that is the point that -- I mean, growth rates have definitely come up substantially, but the movement seems to be more in the print media.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [162]

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That is what I am repeatedly saying, right? If there are 10 electronic players who are reporting 15% to 20% de-growth and 2 are reporting 2% growth, what does that mean? It means the overall electronic industry has gone down? No. So what we have reported is just (inaudible).

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Unidentified Analyst, [163]

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So -- okay. So the point -- I mean, you are not seeing any decrease in wallet share of the advertisers. Is that a fair assumption?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [164]

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I'm coming to that. Please bear with me. Actually, this kind of thinking only has done a great damage, right? Please bear with me. I'm explaining you everything. I'll give you at least 10 evidences to remove your doubts. First of all, let me explain that point. If the electronic industry 10 players have de-grown and 1 player has grown, it is not a growth. In the same way, if we have reported 4% de-growth in advertisement revenue, right, and PRI reported 12% de-growth, right? What does that mean? So other than that, 2% growth is neither attractive nor 3%, 4% de-growth is that disappointing in this environment because both remain to be -- whether it electronic media or it remains newspaper, everywhere advertisement spend is discretionary.

So you tell me, if you are an advertiser and as -- you are advertiser. If you have to spend INR 1 and you want the reach, where do you want to spend it first? You would spend first in electronic media because of higher reach. Understood? But so as to push really sale, you would spend in the print as well, with the radio as well. This is why when the auto industry was not advertising, right, we had a de-growth of minus -- we had a de-growth of 30% in Q1, right? Now once they advertise in Q2, they had much better retail sales. This is where they went wrong. So they continue to advertise on both these channels, but they did not have any impact on sales. Once they started advertising with the newspaper and the leaders like Jagran, they had much better sales in certain event. (inaudible) for the first time has reported 8% growth in number of vehicles sold.

Number two -- others also have reported lower de-growth, number one. Number two, what -- you said, the volumes may have increased by only 4% to 5% to 5%, in case of FMCG. That is a huge concern for India. The reason is, as I mentioned, when 60%, 70% of the population do not consume basics, how come those basic items' volume growth is at 4% to 5%?

Number two, it's worth asking about advertisers continue to cut their wallet. Yes, they have cut down. National advertisers are not doing well for the simple reason that they have a pressure on their bottom line. When they are not able to sell, how will they spend on us, number one? Number two, if you talk about what the champion does, champion does looking for other sources, which is one Jagran did. Jagran added 2,500 new advertisers. Where they have come from? We have to work extra hard. We cannot fill this with vacuum. I mean, (inaudible)

[Audio Gap]

spent the last year, we would have reported growth. It is not because actual advertising is coming as well. Yes, it is de-growing. But then, it has de-grown. But if it has de-grown, where we have -- I mean, like, we could have recovered it if the central government had the spend. Wherever there is a de-growth in the commercial advertising, those we clearly see are picking up.

In this, let me also add, when I am talking about addition of 2,500 new advertisers to our advertiser base, do you know if these -- there are about 2 lakhs advertisers for the print. Jagran has 30,000 advertisers. Past 3 years, we have added nearly almost 3,000 to 3,500 advertisers in these difficult times, almost, only when the growth was muted or there was a de-growth.

So currently, whether they are spending more amounts, but going forward, they are the ones who will spend more. And it is good that unlike every local site which used to be 60%, now also it is 62%, 63%. If it goes up to 80%, that is a [strong return].

So there is no structural thing. Let us not have any confusion on that. Unlike -- you talked -- we talk about digital growth for the news and current affairs online websites. Who has grown? Nobody has grown. We were the only exception that we have been growing for past 2 or 3 years. There are some others who are having these falling revenue. But this time, we have also -- we also had a stagnant revenue for Q2 and H1. As well, we had some growth. But Q2, we had a stagnant revenue.

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Unidentified Analyst, [165]

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And Mr. Agarwal, when things turn around, hopefully in a couple of quarters, where do you see your growth trend reverting back to? Will it be the 2008 to 2013 kind of...

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [166]

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Of course not. Of course not. I'll not -- because unlike -- I will not sound to be that kind of optimistic, which is not the reality. We, of course, expect 7% to 8% growth year-on-year for next 5 years, very comfortably, and that 7% to 8% growth for me is good enough to report every year 15% growth in net profit.

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Operator [167]

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So we have next question from the line of (inaudible) [Singh] from Inventus Capital.

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Unidentified Analyst, [168]

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Sir, my question was, in the circulation decline that you said of 5% to 6% over the last 2 years.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [169]

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Right.

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Unidentified Analyst, [170]

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Yes. So are there any particular geographies which are seeing a sharp decline or is it overall?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [171]

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There is -- madam, there is no territory where there is anything like sharp decline. It is a strategic reduction in the circulation. I will not [comment] decline because we took increase in the cover prices. So that is -- as I mentioned earlier also, management has not compromised with the market position, right?

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Unidentified Analyst, [172]

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Okay, sir. So would the cover price...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [173]

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So as you may have been, somebody's (inaudible) [IRS] Q2 data, right, again, Jagran came at the top, and Jagran is at the top since 2003 without break. (inaudible) holding the leadership position for 16 years. It speaks volumes of the quality which Jagran supplies.

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Unidentified Analyst, [174]

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Okay, sir. So this cover price increase was taken in which markets?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [175]

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Our price increase, as you said, we keep pitching wherever it is possible. There is no particular area. We have more than 300 editions, sub-editions put together. So maybe that increase in sub-editions, we got about an opportunity to immediately increase the cover price. Maybe then we increase the cover price in all of the editions. So it is -- there is nothing. There is no set rule in general and we're opportunistic about it.

We always endeavor to convince our competitors also because [till] the newspaper is not getting the price it deserves, despite the fact that it has been -- it is the only thing which is the original creator of the content, and everybody picks it up from us.

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Unidentified Analyst, [176]

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Okay. Sir, one last question. Hello?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [177]

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Yes.

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Unidentified Analyst, [178]

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Sir, one last question. Have you imported local share of newsprint, the bind, the change or it remains at [25.75] (inaudible)?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [179]

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Sorry. Can you repeat, please?

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Unidentified Analyst, [180]

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Sir, your newsprint share of imported and local.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [181]

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Yes.

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Unidentified Analyst, [182]

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Has it changed or it remains the same?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [183]

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It changed -- it has changed and it is -- which is because imported is slightly cheaper now.

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Unidentified Analyst, [184]

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Okay. So what would be your share currently for your reduction to...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [185]

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50 to 50. 50-50.

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Unidentified Analyst, [186]

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50-50. Okay. And do you expect to maintain -- that to be maintained for the second half of the year?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [187]

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We will. In fact, in the first half, it is less than 50, but for the year, it will be 50, which means that second half, it will -- we may consume a little more.

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Unidentified Analyst, [188]

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Okay, sir. So you would be seeing some impact of the customs duty on the [earnings stream] and your...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [189]

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Unless we have customs duties, I think it will be prudent to consume imported because it will add quality also.

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Operator [190]

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We have next question from the line of Depesh Kashyap from Equirus Securities.

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Depesh Kashyap, Equirus Securities Private Limited, Research Division - Research Analyst [191]

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Sir, just one question. You already mentioned the newsprint savings you will make in the second half. So can you just tell us what are the rates that are going down? And what is the outlook for FY '21, please?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [192]

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FY -- see, current rates are -- have gone down very, very sharply, which are not sustainable. Let us try to [advise] those low rates maximum for a year or so, until it will start rising. Let us hope by the time they start rising, advertisement revenue growth comes back, and which is what we believe.

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Depesh Kashyap, Equirus Securities Private Limited, Research Division - Research Analyst [193]

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Sir, can you ballpark here like it's around [37,000], something like that, at current price and how it is it?

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [194]

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It should be around that only.

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Depesh Kashyap, Equirus Securities Private Limited, Research Division - Research Analyst [195]

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Okay. And next year, it should rise again because it's...

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [196]

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(inaudible).

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Operator [197]

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Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. R.K. Agarwal for closing comments. Sir, over to you.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [198]

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Thank you, gentlemen.

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Sanjay Gupta, Jagran Prakashan Limited - CEO, Chief Editor of Dainik Jagran & Whole Time Director [199]

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Thank you, everyone.

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Operator [200]

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Thank you very much, sir. Ladies and gentlemen, on behalf of Jagran Prakashan Limited, that concludes this conference call. Thank you for joining with us. You may now disconnect your lines.

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Rajendra Kumar Agarwal, Jagran Prakashan Limited - CFO [201]

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Thank you.