Print media multibagger stock hits 5-yr high; has zoomed 112% in 3 mths

Shares of DB Corp were locked in the upper circuit of 10% at Rs 255.30, its highest level since May 2018 on the BSE on Wednesday on expectation of a steady revenue growth in FY24

Shares of DB Corp (DBCL) were locked in the upper circuit of 10 per cent at Rs 255.30 on hitting a five-year high on the BSE on Wednesday on expectations of steady revenue growth in the current financial year 2023-24 (FY24).

The stock of the company, engaged in print media business, was quoting at its highest level since August 2018. In the past three months, it has zoomed 112 per cent as DB Corp had reported a strong set of numbers for the quarter ended June 2023 (Q1FY24).

DBCL is India’s largest print media company and home to flagship newspapers - Dainik Bhaskar, Divya Bhaskar, Divya Marathi and Saurashtra Samachar.
 

The company’s consolidated profit after tax (PAT) more-than-doubled, growing a strong 154 per cent year-on-year (YoY), to Rs 78.8 crore from Rs 31 crore. DB Corp said all of its segments are firing from all cylinders, delivering robust ad growth. Print & other business advertising registered a growth of around 18 per cent YoY to Rs 358.4 crore from Rs 305.1 crore.

Consolidated earnings before interest, taxes, depreciation, and amortization (Ebitda) registered a growth of 84 per cent YoY in Q1FY24 to Rs 135.9 crore on account of impressive revenue growth as well as continued cost control including softening newsprint prices. Ebitda margin expended by 900 basis points to 24 per cent during the quarter.

The revenue growth of the company is expected to be steady in FY24 with traditional sectors increasing their advertising budgets and higher contribution from government ad spending in view of few state assembly elections and national elections.

However, the margins remained constrained on account of skyrocketing newsprint prices during FY23, which though has improved in Q1FY24 with a reduction in newsprint prices. Further newsprint prices are expecting on downward trended in ensuing quarter, which will improve the company profitability, according to analysts.

The optimistic outlook for the Indian economy is driving increased advertisement spending across various sectors. Dainik Bhaskar, with its strong presence in Tier 2 and 3 cities, is well-positioned to capture the growth in these markets, DBCL said in its FY23 annual report.

Tier 2 and 3 cities in India have been witnessing rapid development and economic growth, often outpacing the growth rates of metros and tier 1 cities. These cities are becoming significant consumer markets with rising disposable incomes, urbanisation, and increased consumer spending. As a result, advertisers are increasingly recognising the potential of these markets and allocating their advertisement budgets accordingly, the company said.

Sectors like Education, Lifestyle, Electronics, FMCG have been experiencing a recovery in their print advertisement spends since the impact of the Covid-19 pandemic. While the advertisement spends in these sectors may not have reached their pre-Covid levels, there is a positive trend indicating a gradual recovery, according to DBCL.