D B Corp hosted a conference call on Oct 19,2022. In the conference call the company was represented by Mr PawanAgarwal-Dy Managing Director, Mr GirishAgarwal-Non-Executive director, and Mr P G Mishra.

Key takeaways of the call

Q2 witnessed robust growth in advertising with many of the muted segments like consumer durables returning in a big way. Both large and medium advertisers are considering print as both trustworthy and effective medium for utilising their advertisement spends.

H1FY2023

Advertising Revenue grew by 51% to Rs 718.1 cr as against Rs 474.2 cr. Circulation Revenue grew by 2% to Rs 231.2 cr as against Rs 226.5 cr. Total Revenue grew by 38% to Rs 1046.4 cr as against Rs  759.2 cr.

EBITDA grew by 55% YoY to Rs 171.5 cr as against Rs 110.5 crafter considering forex loss of Rs 4.2 cr aided by stringent cost control measures & despite high newsprint prices and large digital business investment for future growth.

Net Profit grew 153% to Rs 79.8 cras against Rs 31.5 cr, after considering forex loss of Rs 4.8 cr.

Q2FY2023

Advertising Revenue grew by 26% to Rs 381.2 cr as against Rs 302.9 cr. Circulation Revenue remained flat at Rs 115.6 cr when compared Rs 115.9 cr. Total Revenue grew by 21% to Rs 546.1 cr as against Rs  451.3 cr.

EBITDA stood at Rs 97.7 cr as against Rs 105.4 cr  million after considering forex loss of Rs 2.5 crore.

Consolidated EBITDA margin stood at 18% for the quarter and for print it stood at 21%.

Radio business:

In H1FY2023 advertisement revenue stood at Rs 65.8cr as against Rs 44.3 cra growth of 49% and EBITDA grew by 137% to Rs 20.1 cr as against Rs 8.5 cr in H1FY2022.

In Q2FY2023 advertisement revenue stood at Rs 33.8 cr as against Rs 28.7 cra growth of 18% YoY and EBITDA grew by 22% to Rs 10.6 cr as against Rs 8.7 cr in Q2FY2022.

Digital Business: The daily active users have increased from 2 million in Jan 2020 to 15 million in Aug . The same was around 16-17 million few months back.

The decline in users when compared to last few months could not be identified, but the company expects to regain the same and add to it going forward.

In digital business the company's focus is on app and not web.

Premium plans: The company is working on experiments on select audiences to monetise and expects the result to come in next few quarters.

On account high quality content and highly personalised knowledge experience has helped the company to become no 1 Hindi and Guajarati news app player in the country.

Talent: The company has undertaken all the measures to retain the talent and also provided employee stock option to lot of key positions and employees in the digital business.

News Print: The news print prices were at Rs 47000/ton in Q3FY2022, Rs 53000/ton in Q4FY2022, Rs 66000/ton in Q1FY2023 and Rs 65500/ton in Q2FY2023.

The company expects the news print prices to reduce by 12-15 % and expects the same to go below 60,000/ton in Q4FY2023.

The average consumption cost of newsprint in Q2FY2023 was around Rs 63000-64000/ ton and purchase price was higher by around Rs 1000-1500 higher. There is usually a lag of around 60 days for Indian News print and slightly more for imported news print between purchase and consumption.

Operating Cost:Seamless cost cutting measures undertaken by the company are long lasting and has resulted in reduction of cost by around 10% when compared to FY2020 levels.

Other Expenses: In Q2FY2023, other expenses were higher by 12.5% and in absolute terms higher by Rs 15 cr when compared to Q2FY2022 of which around Rs 4 cr was on account of forex loss and the large increase in was on account of production process. However, the company does not see any further increase in other expenses unless the number of pages goes up.

Advertisement: Except Auto (which has declined by 50%), FMCG (which has declined by 15-18%) and Lifestyle(apparel which has declined by 24%) when compared to pre covid levels all other sectors are seeing good traction and are growing at a healthy rate in double digits. Jewellery has grown by 100% when compared to pre-covid levels.

The company expects auto and lifestyle to come back to growth going forward. In Auto some advertisement is coming from EV space.

Education and Jewellery has better yield.

Add revenue from government in the quarter was around Rs 60 cr which includes from state governments, central government and panchayat. Going forward the company expects the ad revenue to increase. However, the company does not have any target on government expenditure.

Advertisement revenue stood at 104% of pre-covid levels and is driven by volume growth. Right now the company's focus is to increase the volume and the volume is higher when compared to pre-covid levels. Advertisement volume is up 3%.

Growth: The company has seen double digit growth till date in Q3 and expects the same to continue.

Circulation copies: The circulation copies stood at 42 lacs. The pre-covid level circulation stood at 56 lac which was on account of some activities undertaken by the company. The company targets to achieve 45 lac copies and to grow from there.

Cover Price: The cover price of the copy stood at Rs 4.77 per copy up 3% YoY. The company does expect to increase the cover price in the near future.

Receivables: The company as high receivables as it provides 60-90 days credit to its add generators and further the payment from the government side is usually late. The company has made all the required provisions where ever required.

Net cash: The company has a cash balance of Rs 470 cr and is debt free.

Government rates: The industry through its representative body has made representation to the government to increase the advertisement rates. However, the increase has not yet happened and the company expects the increase to happen in short time.

Management Commentary:

Commenting on the performance of the company Mr SudhirAgarwal, Managing Director said: “While the last six months have been news-heavy with major geo-political events dotting the landscape, the Indian Economy with its large consumer base and growing manufacturing sector has shown signs of resilience and revival. Our Industry has been a beneficiary of this momentum and DainikBhaskar, being the industry leader has led the way not only in financial results, but also for furthering the reversion-to-print trend which is being witnessed amidst digitisation of media. Our editorial integrity has always been of paramount importance to us and that has been validated by the increase in advertisers across the spectrum – new age as well as traditional businesses. Our omni-channel news delivery platform, along with a well-oiled machinery on the circulation front, has propelled us to the #1 Indian Language newspaper Company. We continue to focus our energies in building a strong and resilient financial position to ensure that we are able to capitalise on all opportunities that come our way.”