DB Corp - Q3FY14 Results - Kotak

DB Corp posted yet another strong quarter, with the company beating our EBITDA estimates by 6%. While we appreciate the performance in the past few quarters, we believe the outperformance of the company has been significantly contributed to by elections in several states over the past quarter. Consequently, we think, DB Corp's outperformance to peers, especially JagranPrakashan, is likely to moderate significantly.

In this context, the current premium enjoyed by DB Corp (6 turns on PER FY15E, or about 50%) seems unsustainable. Added to a challenging future that we envision for the newspaper publishers in the medium-term (especially post elections), we see this as a reason to downgrade DB Corp to REDUCE. We set a price target of Rs 300 (cut from Rs 308 earlier), and would look for better entry points in the stock.

Source : Equity Bulls

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