Q3FY21 Result Update - DB Corp - ICICI Direct

DB Corp's revenues fell 17.4% YoY to Rs. 494.3 crore as prevailing Covid-19 situation continued to impact revenues. Print & digital ad revenue dipped 12.9% YoY to Rs. 337.6 crore while radio ad revenue also registered de-growth of 21.9% YoY to Rs. 29.1 crore. Circulation revenue fell 18.1% YoY to Rs. 108.2 crore mainly due to lower circulation of copies. EBITDA was up 16.9% YoY to Rs. 165.6 crore while margins at 33.5% were up 984 bps YoY. Operating performance improved on the back of cost control measures and soft newsprint prices. Hence, reported PAT was at Rs. 99 crore, up 21.3% YoY.

Valuation & Outlook

Print segment was among the worst hit sectors during the pandemic. Although we expect ad revenue to fully recover only by FY23E, continuous cost cutting initiatives and soft newsprint prices augur well for operating margins in near term. Consistent FCF generation is encouraging. Lowering of pledged shares also provides comfort. We assume healthy dividend payout in normalised scenario (paid dividend of Rs. 10/share for both FY19 and FY20), given the absence of any major capex, which is an attractive proposition. We rollover to FY23 and upgrade to BUY rating (vs. HOLD earlier) considering attractive valuation. We value the stock at 5x FY23E EPS (vs. 6x FY22 EPS earlier) with a target price of Rs. 95 (vs. earlier TP of Rs. 80).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_DBCorp_Q3FY21.pdf

Shares of D B Corp Ltd was last trading in BSE at Rs.80.8 as compared to the previous close of Rs. 79.35. The total number of shares traded during the day was 18112 in over 790 trades.

The stock hit an intraday high of Rs. 83.1 and intraday low of 79.15. The net turnover during the day was Rs. 1474396.

Source : Equity Bulls

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