Newsprint prices are peaking, we should get some relief from Q3: Girish Agarwal, DB Corp

At the Q1FY23 earnings conference call, Agarwal, Non-Executive Director, DB Corp, shared that they are hopeful that the print sector should be reaching a satisfactory level with growth over FY 2020

by Team PITCH
Published - August 18, 2022
5 minutes To Read
Newsprint prices are peaking, we should get some relief from Q3: Girish Agarwal, DB Corp

We have commenced this financial year on a stronger note with strong Q-o-Q and Y-o-Y performance across all segments, said Girish Agarwal, Non-Executive Director, DB Corp Ltd, during the Q1FY23 earnings conference call. 

He further said, “ I think it is more important to note the Q-o-Q rather than Y-o-Y for simple reason, because last year, the first quarter was a Covid-hit quarter so the numbers look very highly growth-centric. But to be very honest, we need to compare it Q-o-Q. Also, we should compare ourselves with the 2019-2020 quarter rather than the last year.”

He also spoke about how their “leadership position” in the market has helped them attract a wide variety of advertisers, both from the traditional categories like real estate, jewelry, education as well as new-age sectors like e-commerce, start up, fintech etc. “We will continue to strengthen our advertising funnel by innovations such as award-winning special editions while providing a platform to advertisers for hyper local ad campaigns.”

Speaking on the company’s financial performance and cost optimization, Agarwal said, “As we have been pointing out over the past few quarters, our similar focus has been to ensure that our various cost cut measures are long lasting. While we are working towards increasing our revenue base, we have also managed to save approximately 6% in the operating cost vis-à-vis Q1 of FY20. Resultantly, the print business EBITDA margin for Q1 FY2023 stood strong at 20%, EBITDA margin expanded by more than 700-basis points despite newsprint prices headwinds. We believe that the newsprint prices are peaking, and we should get some relief going forward from the Q3 of this year.”

When asked about the advertising yields and where they stand in comparison to pre-Covid levels during the call with the investors, Agarwal explained that they are looking at it category wise. “Some categories’ yields are already higher than the pre-Covid level, but some categories are still struggling. It is a function of the category behavior in the market. So, for example, the real estate category is higher than the pre-Covid level because that category has already bounced back in a big way, but in our auto sector, that is still struggling because the automobile category as such is down. So that is the way we are looking at it.”

On the number of copies as compared to Pre-Covid level, he said that they are now at 42 lakh copies in this quarter, summer quarters are generally slightly lower than the normal. He said they hope that in Q2 of this year, the number of copies should increase by a couple of lakhs compared to the pre-Covid which is 2019-2020. “This is certainly down by almost 10-15%.”

Pawan Agarwal, Deputy Managing Director, DB Corp, meanwhile added that despite inflationary pressures and challenging sentiments in the domestic and global market, the group has delivered strong results in this quarter. “We witnessed good growth in both circulation and advertising,” said Agarwal.

Group’s Q1 FY23 advertising revenue grew by 96.6%, while circulation revenue recorded a growth of 4.5%. EBITDA stands at Rs.73.8 crore versus Rs.5.1 crore of previous year despite high newsprint prices and the company's continued investment in the digital business, said Agarwal.  “This was possible in large measure due to stringent and long-term cost control measures that continue to serve us well. Print business' EBITDA margin stood at 20%, PAT for the quarter stood at Rs. 31 crore versus a net loss of Rs.22.3 crore in Q1 FY22.

Talking about the digital business, he said that the company has been steadily growing its loyal daily active user base across all its apps. An increase of over eight times from 2 million in January 2020 to about 17 million in May 2022 can be attributed to focus on ensuring high-quality content with the bespoke and highly personalized product experience. “This, we believe, has helped propel Dainik Bhaskar group, in becoming the dominant digital leader with #1 Hindi and Gujarati news app players. With the dominance is already established in the print format and now in the digital format, we are undoubtedly the number one phygital Indian language newspaper in the country.”

On the radio business he said that the MY FM content continues to connect with the audience and augment listener engagement activities through innovative content creation. “This has also helped us get better ad rates and we are hopeful of further improving this in the forthcoming quarters.”