2025-11-19 01:05:28
Latest Post
SeQuent Scientific and Viyash Lifesciences Receive NCLT Approval for Transformational Merger
NTPC Renewable Energy Ltd commissions 75.5 MW solar pv project
IT survey at Waaree Energies Ltd
Hazoor Multi Projects Ltd receives LOA from NHAI
SIDBI and Bank of Baroda sign MoU to Strengthen Credit Delivery for MSMEs and Startups
Research
Maintain Buy on DB Corp - Weaker ad growth; FY13 focus to be on consolidation - BRICS
Posted On : 2012-05-07 10:56:49( TIMEZONE : IST )
DB Corp (DBCL) reported a 14% yoy revenue growth driven by 5% growth in advertising and 16% growth in circulation revenue. EBITDA margin contracted 407bps yoy to 21% due to higher expenses on account of new launches (including a one-time new-launch-related expense of Rs12.5mn). The radio business reported a revenue growth of 10% to Rs146mn. We tweak our estimates and increase target price to Rs254 (From Rs250). Maintain Buy.
Challenging market impacts advertising growth:
Low confidence among the national advertisers led to a weaker-than-expected advertising growth of 5%. However, retail segment continued strong growth (19%)contributing 64% to print advertising revenue. New launches and a cover-price hike led 16% higher circulation revenue. Other income was boosted by a Rs140mn revenue from its subsidiary, MP Printers.
Increased competition in MP and Chhattisgarh:
Jagran Prakashan's recent entry in MP and Chhattisgarh through acquisition of 'Nai Dunia' and continued expansion of 'Patrika' will increase competitive intensity leadingto pressure on cover price and advertising rates. However, management believes that the cover price difference between 'Dainik Bhaskar' and competition is not high enough for the subscriber to make a switch.
FY13 to be a year of consolidation:
DBCL will focus on monetising its Maharashtra and Jharkhand businesses and will defer its Bihar launch till FY14. Expansion in these markets will be limited to smaller spillover launches. The losses from emerging markets will also be curtailed in FY13 due to an absence of one-time launch-related expenses.
Outlook and valuation:
The stock trades at a P/E of 14x FY13 and 11x FY14 on our estimates. We tweak our estimates and revise our target to Rs254 (from Rs250) assigning 16x P/E to our average FY13-14 EPS. Despite higher competition in its home market, we maintain Buy, based on stronger growth expectation in Hindi advertising, leadership position in key Hindi states and urban centers, and increasing profitability with rising motorisation of emerging editions.
