DB CORP is one of the largest print media company of Indi, publishes 8 Newpapers with 65 editions in 4 main Regional languages i.e. English, Hindi, Gujarati and Marathi across 13 states in India. Their brand name is Divya Bhaskar (in Gujarati), Dainik Bhaskar (in Hindi), DNA (in English) Divya Marathi (in Marathi).
They also have Radio FM that is “MY FM” under their brand “JIYO DIL SE” “frequency is 94.3” they are currently operating in 7 states and 17 cities. And they also have their mobile application under their brand name “DB DIGITAL”. They also run various portals in their own name for various subjects they cover.
Print- media: In print media revenues comes from two modes i.e. Print - ads and newspaper circulations. The circulation business is like an annuity business and is consistently grown 15% where volume contributes 5% and price is 10%. And according to the concall of previous year they have clearly said that they won’t erode price in advertisement business but to increase volume they can maintain or reduce some price in newspaper circulation. In circulation business they have expanded in regional footprint and have launched new editions in Bhagalpur, Gaya and Muzaffarpur besides 7 districts edition and extended presence in Bihar.
Radio Business operates in 17 cities under the brand name MY FM and they have acquired 14 stations in phase 3 auctions. They are likely launching their newly acquired stations in a phased manner. They are expecting 17% CAGR in Radio business. In Digital business, they are bullish on the readership base and will also start homeonline.com – a real estate portal with many new features timeline is August 1, 2016.
Equity is 18.34 crores face value is RS 10
Promoter holding 69.95%
Long term debt of 154.91 crore and short term debt is 176.67 crore.
Company has Cash and bank balance of 92.39 crore and short term loans and advances of 56.03 crore.
Year 12 13 14 15 16 Q1 FY 17 Assumption
Sales 1451.51 1592.32 1859.76 2009.57 2051.86 570.39 2280
Np 202.11 218.14 306.65 316.34 296.65 103.96 415.84
EPS 11.03 11.9 16.72 17.23 16.15 5.66 22.64
Dividend 3.75 5.35 6.5 7.75 11 4.25 -
Company is basically in two business i.e. newspaper and digital (includes radio). The company has been operational in Gujarat, Rajasthan, Madhya-Pradesh, Chattishgardh where elections are coming and they have good presence.
Coming with the economy revival and the introduction of 7th pay commission, the print-ad revenue is likely to increase as the auto, FMCG, Ecommerce companies is likely to increase their spend. So they had increased their prices and will also increase their volumes in print ads segment.
They are also entering into newer markets for circulations business. Long-term newspaper contract to hedge any spike in newspaper cost, which constitute 31% of revenue.
The circulation business is a sticky business where the customer doesn’t change on day to day business or year on year business and increase in prices of newspaper doesn’t affect their choices.
On segmental basis in terms of languages, the regional language contributes higher than the English languages.
In radio business, they have acquired 14 stations which are in phase 3 and will be starting them in next half of the current year plus they also have good share in 17 cities. This business can grow at 15 -20% CAGR in coming few years as the base is small.
Digital business: the management is focussing more on this business. According to investor presentations in terms of readers and page view they come in the 2nd position after TOI
In terms of ratios, the company have ROE of 22%, ROCE of 20% and ROIC is 22.22%. Their EBITDA margin is 26% the dividend yield is 2.7% and D/E is 0.1.
The company is trading at a P/E of 22 on trailing basis.
- Promoter has pledged their share that is 44.65% of their holding
The company is trading near all time highs
Disc- Not Invested
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