Post a weak FY20, FY21E outlook also looks challenging for the print industry considering the extended lockdown in Q1FY21E, stretched fiscal (impacting government ads) and dislocation at local business levels. We believe a recovery in ad volume will take time. Among positives, DB Corp has maintained good dividend payout (| 10/share in FY20). Softened raw material prices with cash of | 135 crore will support operational performance in the near term. The stock price has sharply corrected since our last recommendation but we remain wary of promoters' pledge (~35.3% of...

Key sectors remain weak dragging down print ad Print ad continues to be hit sharply as ad spend of the central government for 9MFY20 has declined 40-50%, given no major schemes were launched. For Q3FY20, overall government (state+ central) and auto sectors fell 810%. On a positive note, the management said their market share of ad volume has increased 15-20% in all states in the last two years. We note that the company has refrained from guiding on print ad growth given the overall uncertainty. Going forward, post a washout FY20 (decline of ~7% YoY), we are baking in print and digital ad growth CAGR of 5% in FY20-22E to | 1659...

DB Corp's revenue for the quarter came in lower than our expectations on account of muted print ad revenues from some of its key sectors like automobile, education, lifestyle, etc. We note that the company did not disclose digital revenues separately and clubbed it with print revenues. (Print + digital) revenues came in at | 404.8 crore, down 4.4% YoY (steeper than expected decline of 3% YoY). Circulation revenues came in at | 131.4 crore, down 2.3% YoY, largely led by clamping down on some copies in key markets of Gujarat and Bihar. Radio revenues grew a strong 19% YoY....

DART view: Likely revival in ad growth key re-rating trigger DBCL's 1QFY20 performance was weak due to a 4% YoY decline in advertising revenue. However, RM tailwinds (-6% YoY) and costs efficiencies (-12% YoY) supported EBITDA (+4.4% YoY). IndAS 116...

revenue declined 4% YoY to INR6.1b (9% miss) due to weak print ad growth (-5% YoY) and lower circulation revenue (-2% YoY). EBITDA increased 4% YoY to INR1.8b (14% miss), benefiting from a PAT declined 4% YoY to INR937m (22% miss) owing to (a) lower other income and (b) reallocation and higher cost of depreciation/interest cost of INR92m based on Ind-AS 116. Radio segment performance was the only silver lining with healthy revenue/EBITDA growth of 19%/84% YoY. (c) The focus on cost reduction will continue against the backdrop of weak revenue performance. Given weak ad spending by both national and local advertisers, management refrained from providing any guidance. Yet we build in revenue/EBITDA growth of 3%/16% for the year in view of low newsprint cost and the strong focus on reducing cost. Despite the cut in earnings, PAT is estimated to grow at 12%/19% in FY20/21, given the sharp reduction in opex.

DB Corp's (DBCL) flagship daily, the Dainik Bhaskar is the 2nd most widely read Hindi daily. However, DBCL is the overall leader in ad revenue. It enjoys a higher readership and thus revenue share in high-yielding urban markets. Led by a recovery in ad revenue growth and benign newsprint costs, we estimate revenue/EBITDA/earnings to grow at a CAGR of 5.4/21.5/25.3% over FY19-21E. DB Corps (DBCL) 4QFY19 operating performance was marginally ahead of estimates. This was led by 8% advertising revenue growth in print, modest decline in newsprint (NP) prices with lower other opex YoY. Maintain BUY with TP of Rs 291 (+59%) @ 12x FY21E EPS (a discount of ~35% to 3/5/10 years avg PE).

DB Corp reported largely in line revenue numbers in Q4FY19 but a beat on EBITDA (margin of 17.7% vs. 16.7% expected), driven by lower-thananticipated newsprint as well as employee costs. Overall revenues at | 588.5 crore, up 5% YoY, were driven by print ad growth of 8.2% YoY and radio revenue growth of 7.7%. Circulation revenues came in at | 127.3 crore (up 1.7% YoY) with growth being largely volume led. Digital revenues, on the other hand, declined 24.1% YoY to | 9.9 crore, with the company focusing on building direct traffic to site and doing away with low paying inventory....

Overall revenues came in at | 659.7 crore (up 10.2% YoY), much ahead of our estimates of | 639.8 crore, on account of superior print and radio ad revenues. Print ad revenues came in at | 420.8 crore, up 11.5% YoY ahead of our expectation of ~9.5%, with delta possibly contributed by festivities and elections led boost. The key surprise was on radio ad revenues front, which were at | 46.5 crore, up 38.4% YoY (vs. our expectation of 15% YoY growth). We await clarification on such growth. Print circulation revenues, however, were slightly...

24 January 2019 DBCL continued to see pain due to higher newsprint prices; though the pain was lower-than expected. revenue grew 10% YoY to INR6.6b (+13% QoQ, 2% beat) led by healthy 11%/3% YoY growth in print ad/circulation revenues and strong 39% YoY growth in radio revenue. This coupled with lower other operating cost helped EBITDA to remain flat YoY (+51% QoQ, 31% beat) at INR1.4b, even as newsprint cost spiraled 34% YoY. (1) Healthy 11% ad growth in 3QFY19 was driven by 2% election related advertisement while rest was due to a favorable festive season.(2) In FY20, ad growth should be better due to high contribution from election ads as well as due to the government rate hike. (3) Against the peak of USD750/ton, newsprint prices are down to USD560-565/ton and are likely to decline further due to capacity addition globally in Russia and China; we expect 23-24% fall in prices but the benefit will be seen from 1QFY20.

The overall revenues came in at | 582.1 crore (up 2.4% YoY), marginally below our estimates of | 589.5 crore, on account of lower than expected print circulation revenue growth of 5.6% YoY (vs. our expectation of 8.2% YoY) at | 131.8 crore. The print ad revenues came in at | 364.1 crore, up by 4% YoY and in line with our expectation, with weakness largely contributed by shifting of festive season. The radio ad revenues were at | 37.7 crore, growth of 8%...

ICICI Securities Ltd | Retail Equity Research Our interaction with the DB Corp management indicates that newsprint prices are expected to remain elevated for the rest of FY19. The pain has been accentuated by a sharp rupee depreciation vs. US$ (11% in FY19 so far). However, on account of additional newsprint supply coming in from a couple of new mills in the global market, newsprint prices are expected to at least stabilise at the current level, if not decline further. We now build in ~30% newsprint cost increase (vs. ~22% earlier) for FY19....

25 July 2018 Management plans to increase circulation in Bihar, Gujarat and Rajasthan by about 100k-150k copies to attain leadership in each region. In 1QFY19, it had reduced copies by 3% QoQ (from 5.96m in Mar- 18 to 5.8m in Jun-18), however, management believes it is opportune time to increase circulation copies when other print cos are curtailing circulation copies to save cost amidst high newsprint price. It also plans to focus on other markets Maharashtra, Punjab once the circulation drive in Bihar, Gujarat and Rajasthan is completed. Out of the combined ad market size of Gujarat, Rajasthan and Bihar at INR22.5b, DBCL is estimated to have about 26%, 49% and 10% market share in the respective markets. With rising dominance in each of the market, management plans to increase ad market share driven by higher volumes and ad yields. In Bihar, it plans to double market share to 20% with a mix of 40% yield and 60% volume.

Overall revenues came in at | 632.4 crore (up 6.7% YoY), marginally below our estimate of | 636.1 crore, on account of lower-thanexpected print ad revenue growth of 5.3% YoY (vs. our expectation of 7% YoY) at | 411 crore. Print ad growth for the quarter was largely driven by volume. Circulation revenues came in at | 134.5 crore, up 10.2% YoY and better than our expectation of growth of 8.1% YoY, due to volume growth across the market. Radio ad revenues were weak at | 31.7 crore, growth of mere 1.6% YoY (vs. our expectation of 7% YoY growth), owing to heavy advertisement by central...

We maintain our BUY rating on DB Corp with a target price of Rs368. We expect the company to post high single digit ad growth for FY19E as key sectors such as real estate, BFSI continue to disappoint with management focus on FMCG and auto to driver growth. Further general election would help in Q4FY19 to drive ad growth. Newsprint price inflation is expected to be ~18-20% for FY19E which would further dampen margins as the current prices are ~$750/MT. High circulation increase in legacy markets and Bihar would further increase newsprint consumption. Turnaround in new Phase-III radio station, lower losses in digital...

We maintain our BUY rating on DB Corp with a revised target price of Rs368. We believe the ad growth for the company in FY19E would be back ended driven by volumes and uptick in selective categories. Further the company would benefit in medium term as the increase in circulation would translate into readership leading to ad yield increase. Circulation revenue would continue to grow at double digit on the back of increase in copies while new radio stations have turned ebidta positive in Q4FY18 translating in margin expansion. We believe near term margins would be impacted with steep increase in newsprint prices....

Overall revenues came in at | 567.3 crore (up 9.7% YoY), marginally above our estimate of | 557.7 crore, on account of a better performance from the radio business and higher other operating revenues while advertisement and circulation revenues were almost in line with our expectations. Print advertisement revenues came in at | 337 crore (up 8.8% YoY), in line with our expectation of 9% YoY growth. Circulation revenues came in at | 132 crore (up 8.5% YoY) vs. our expectation of 8.2% YoY growth. Radio ad revenues were strong...

DB Corp once again disappointed with 15% miss on EBITDA, which was led by 6.2% higher-than-estimated opex. Print advertisement revenue growth of 8.8% was in line with estimate and was aided by a favorable base. Circulation revenue growth of 8.5% yoy was driven by an aggressive expansion strategy in Bihar and other key markets. Circulation expansion strategy and rise in newsprint prices...

We maintain our BUY rating on DB Corp with a target price of Rs435 as we roll forward to FY20E and value the company based on our conservative Adj. OCF based methodology. Ad growth declined during the quarter on the back of early festive season and higher base in last year pertaining to private treaty. We expect the ad growth to bounce from Q4FY18 while circulation revenues would be double digit given the aggressive expansion in the state of Bihar, Gujarat and Rajasthan. Despite decrease in margins, we have modelled margin expansion on...

ICICI Securities Ltd | Retail Equity Research Overall revenues at | 598.6 crore (down 4.6% YoY) were much below our estimates of | 633.8 crore. Print advertisement revenues came in at | 377.5 crore, down 5.8% YoY, below our estimate of 1% YoY growth. We note the print ad decline is disappointing considering that HMVL reported ~5% growth in Q3FY18. The radio ad revenue was also weak with decline of 7.4% YoY (| 33.6 crore) vs. our estimate of 12% YoY growth. Digital revenues, which declined 4.9% YoY, were...