X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
DB Corp: Ad growth in double digits - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

DB Corp: Ad growth in double digits
Jan 21, 2013

DB Corp announced the third quarter results of financial year 2012-2013 (3QFY13) .The company has reported an 11.2% YoY and a 27% YoY increase in topline and net profits respectively. Here is our analysis of the results.

Performance summary
  • Top line increased by 11.2% YoY during the quarter. This is the best growth recorded in the year so far. For the 9 month period, revenues increased by 8.7% YoY.
  • Advertising revenue growth bounced back to double digits reporting 11% YoY increase.
  • Circulation revenue grew by 16% as compared to the same quarter last year.
  • Operating expenditure was up by 6.7% YoY during the quarter with employee costs rising the most (up by 15% YoY). Resultantly, operating profits were up by 25.3% YoY during the quarter and by 7% YoY during the 9 month period. Operating profit margins expanded by almost 3%.
  • Other income registered a growth of 20.5% YoY during the quarter.
  • Despite higher tax expenses (up by 30% YoY), net profits increased by 27% YoY in the quarter. For the year till date, net profits were up by 3.6% YoY.

Financial performance snapshot
(Rs m) 3QFY12 3QFY13 Change 9mFY12 9mFY13 Change
Net sales 3,949 4,389 11.2% 10,982 11,942 8.7%
Expenditure 2,997 3,197 6.7% 8,345 9,121 9.3%
Operating profit (EBDITA) 951 1,192 25.3% 2,637 2,821 7.0%
EBDITA margin (%) 24.1% 27.2%   24.0% 23.6%  
Other income 32 38 20.5% 131 122 -6.8%
Interest 21 19 -11.1% 69 58 -15.1%
Depreciation & amortisation 134 151 12.4% 375 430 14.4%
Profit before tax 828 1,060 28.1% 2,324 2,455 5.6%
Profit before tax margin (%) 21.0% 24.2%   21.2% 20.6%  
Tax 271 352 29.9% 753 825 9.5%
Profit after tax before minority 556 708 27.3% 1,570 1,630 3.8%
Share of minority (3) (2)   (3) (1)  
Profit after tax 559 709 27.0% 1,574 1,630 3.6%
Net profit margin (%) 14.2% 16.2%   14.3% 13.7%  
No. of shares (m)           183.35
Diluted earnings per share (Rs)*           11.38
P/E (x)           20.21
(*trailing twelve month earnings)

What has driven performance in 3QFY13?
  • Top line grew by 11.2% YoY during the quarter. For the 9 month period, revenues increased by 8.7% YoY. Largely, improved economic sentiments and focus towards policy measures and reforms contributed to this growth.

  • Advertising revenue growth bounced back to double digits reporting 11% YoY increase. The company saw growth across segments including FMCG, lifestyle and automobiles.

  • Circulation revenue grew by 16% YoY as compared to the same quarter last year despite the company taking price hikes in select markets. However, going forward, the company does not intend to go for further cover price hikes.

    Cost break-up
    (% of sales) 3QFY12 3QFY13 Change 9mFY12 9mFY13 Change
    Raw materials consumed 1,350 1,447 7.2% 3,779 4,109 8.7%
    % sales 34.2% 33.0%   34.4% 34.4%  
    Staff cost 631 724 14.8% 1,819 2,103 15.6%
    % sales 16.0% 16.5%   16.6% 17.6%  
    Other expenses 1,016 1,026 1.0% 2,747 2,910 5.9%
    % sales 25.7% 23.4%   25.0% 24.4%  
    Total expenditure 2,997 3,197   8,345 9,121  

  • Operating expenditure was up by 6.7% YoY during the quarter with employee costs rising the most (up by 15% YoY). However, the main component of costs, newsprint prices seem to be flattening out. This helped in operating profit margins expanding by almost 3%. Operating profits were up by 25.3% YoY during the quarter and by 7% YoY during the 9 month period.

  • Tax expenses were up by 30% YoY and net profits increased by 27% YoY in the quarter. For the year till date, net profits were up by 3.6% YoY. Net profit margins expanded by 2% during the quarter.

What to expect?
DB Corp has kept its expansion plans on hold as of now. The print media company is not looking at any new state but rather wants to launch newer editions in existing markets to benefit from untapped potential in these markets. The prices of newsprint have been flattening and are expected to stabilize at current levels in future too. Also, the economy seems to be turning around with advertising looking good in all sectors. The recently announced policy reforms and anticipated reduction in interest rates with easing of inflation also spell good news for print media companies. However, at the current price of Rs 230, the stock is trading at expensive valuations of 20 times trailing twelve month earnings. We thus maintain our Sell view on the stock.

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

D. B. CORP SHARE PRICE


Feb 23, 2018 (Close)

TRACK D. B. CORP

  • Track your investment in D. B. CORP with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

D. B. CORP - HT MEDIA COMPARISON

COMPARE D. B. CORP WITH

MARKET STATS