DBCORPNSEQ2 FY2023October 19, 2022

D.B.Corp Limited

7,547words
169turns
13analyst exchanges
2executives
Management on call
Pawan Agarwal
Deputy Managing Director, Mr. Girish Agarwal - Non-Executive Director, Mr. P G Mishra
Mushtaq Ali
Vice President, Mr. Lalit Jain - AVP and Mr. Prasoon
Key numbers — 40 extracted
51%
helped our performance this quarter. Consolidated half year advertising revenue grew by a strong 51% to Rs.7,181 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth o
Rs.7,181 million
our performance this quarter. Consolidated half year advertising revenue grew by a strong 51% to Rs.7,181 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 m
Rs.4,742 million
ter. Consolidated half year advertising revenue grew by a strong 51% to Rs.7,181 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 million against Rs.2,265 mi
2%
o Rs.7,181 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 million against Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y
Rs.2,312 million
81 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 million against Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y to Rs.10,464 million a
Rs.2,265 million
742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 million against Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y to Rs.10,464 million against Rs.7,592 million.
38%
growth of 2% to Rs.2,312 million against Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y to Rs.10,464 million against Rs.7,592 million. Various cost optimization efforts taken du
Rs.10,464 million
Rs.2,312 million against Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y to Rs.10,464 million against Rs.7,592 million. Various cost optimization efforts taken during the year has resulted in
Rs.7,592 million
t Rs.2,265 million of previous year. Total revenue grew by 38% Y- o-Y to Rs.10,464 million against Rs.7,592 million. Various cost optimization efforts taken during the year has resulted in 55% growth of EBITDA to
55%
against Rs.7,592 million. Various cost optimization efforts taken during the year has resulted in 55% growth of EBITDA to Rs.1,715 million versus Rs.1,105 of previous year after considering forex los
Rs.1,715 million
. Various cost optimization efforts taken during the year has resulted in 55% growth of EBITDA to Rs.1,715 million versus Rs.1,105 of previous year after considering forex loss of Rs. 42 million. This is despite
Rs.1,105
ion efforts taken during the year has resulted in 55% growth of EBITDA to Rs.1,715 million versus Rs.1,105 of previous year after considering forex loss of Rs. 42 million. This is despite substantial incre
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Guidance — 20 items
Girish Agarwal
opening
“Based on the current domestic and international market visibility and engagements with newsprint suppliers, we believe that the newprint prices should see a correction of around 12% to 15% both in India and imported going forward.”
Girish Agarwal
opening
“The impact of the same should be visible from the Q4 of FY2023 in our numbers and we expect this to continue as further softening in newsprint in short to medium term also.”
Girish Agarwal
qa
“65,500 and looks like that from Q4 as I have indicated in my speech earlier that we are hoping that around 10% to 15% the prices will go down going forward so we are expecting that from this level of Rs.”
Girish Agarwal
qa
“This is as per consumption while the purchase price is slightly higher in the range of around Rs.1000 to Rs.2000 per tonne more because you buy in a particular month then you consume in the going forward months.”
Girish Agarwal
qa
“Exact reason cannot be identified for this but we are hoping that in the going forward months we should be able to not only regain that one million what we lost and furthermore but if at the same time if you look at the market, I think though I should not be comparing this but other news apps they have seen a huge decline in terms of their retention so I think from that perspective we are in a pretty good situation.”
Girish Agarwal
qa
“I think we will be happy to take this call offline with you to give you much more detail on that.”
Girish Agarwal
qa
“If I give you a breakup of the Rs.15 Crores, Rs.4 Crores is the forex loss and the balance large money has gone in terms of the quantity and the increased price of the production process which is ink, plate and all that, so if I assume that going forward these prices stay there or goes down so I do not see any reason why the operational cost going forward should increase except if the number of pages goes up the production cost goes up.”
Riya
qa
“So like we can see prepandemic level auto used to form almost Rs.100 odd Crores for us for advertisement and government also used to form a big pie so what kind of auto advertisement did we see this quarter and do we see anything going forward since auto is reviving and there are a lot of new EV products which is coming by so how do we see that?”
Girish Agarwal
qa
“Lifestyle is another category which is at a 20% decline, 24% decline to be precise on a pre-COVID number so now what we are working in the market that once the automobile issues are sorted out for the supply this decline should turn into the growth, so that will be a big upside for us as well as the lifestyle category which is largely considering about the apparels that need to come back in terms of sales and advertising.”
Riya
qa
“And out of all these categories what will be the highest margin accretive category for us?”
Risks & concerns — 7 flagged
The impact of the same should be visible from the Q4 of FY2023 in our numbers and we expect this to continue as further softening in newsprint in short to medium term also.
— Girish Agarwal
Exact reason cannot be identified for this but we are hoping that in the going forward months we should be able to not only regain that one million what we lost and furthermore but if at the same time if you look at the market, I think though I should not be comparing this but other news apps they have seen a huge decline in terms of their retention so I think from that perspective we are in a pretty good situation.
— Girish Agarwal
In terms of government advertising, we are on a decline.
— Girish Agarwal
In FMCG also there was a decline of around 15% to 18% actually in FMCG pre-COVID and I am giving you all these number pre-COVID.
— Girish Agarwal
Lifestyle is another category which is at a 20% decline, 24% decline to be precise on a pre-COVID number so now what we are working in the market that once the automobile issues are sorted out for the supply this decline should turn into the growth, so that will be a big upside for us as well as the lifestyle category which is largely considering about the apparels that need to come back in terms of sales and advertising.
— Girish Agarwal
We do not look at the numbers coming from the total internet audiences because for most of the publishers, the challenge as we have been saying in the past is those numbers come from aggregators from people like Dailyhunt, from Facebook, from search, from random websites, from people who pick up your headline, paste it on their website so these are not your users.
— Pawan Agarwal
Largely it has come back but see it is difficult to predict about any particular government or a particular market.
— Girish Agarwal
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Q&A — 13 exchanges
Q
Thank you for taking my question. Sir can you share the newsprint prices for the quarter?
Girish Agarwal
Sure thank you Ankit for this question. I think this is the most apt question in the current call. So let me give you the entire history of last four quarters for the newsprint. If you remember in Q3 of FY2021-22, our newsprint prices, the purchase cost for the newsprint was roughly around Rs. 47,000 per tonne which in the Q4 went up straight away to Rs. 53,000 per tonne. Then in the Q1 of FY2022-FY2023 this number went up straight away to almost Rs. 66,000, and then in Q2 it is hovering around the same price of Rs. 65,500 and looks like that from Q4 as I have indicated in my speech earlier th
Q
Thanks, and congratulations on a good set of numbers as well as the information later on issued post result also it is quite comprehensive. So coming to the page 17 of your press release, strategic area the focus and key updates digital strategy. Sir just one query here? You have mentioned that you have strong talent pool continued focus on technology as well as new areas like video news? The key issue here is at least from what I gather from a lot of media companies essentially that it is quite challenging to hold on to talent pool in this because this is a sort of IT technology related area
Girish Agarwal
A very apt question on this. I think company is taking all the possible measures to ensure that we create a great place for people to operate and work in this company. They should have the creative freedom. They should have the joy of creating something, working on something and apart from that also we have issued ESOPs benefit to a lot of key positions in print and digital both, so I think that is also helping us to make sure that our talent stays with us. Thanks for the answer, Sir and Happy Diwali to all of you Sir.
Q
Congrats on great set of advertisement numbers. So like we can see prepandemic level auto used to form almost Rs.100 odd Crores for us for advertisement and government also used to form a big pie so what kind of auto advertisement did we see this quarter and do we see anything going forward since auto is reviving and there are a lot of new EV products which is coming by so how do we see that?
Girish Agarwal
I am very thankful to you for this question because you are comparing us on FY2019- FY2020 which is a pre-COVID year. In fact, in our internal workings we discuss about pre- COVID only because last two years numbers were down and the growth percentage looks much higher, but we actually have to see how we are able to do better than pre-COVID, so let me give you the perspective of all the other categories. In terms of education from the pre-COVID if I to compare the Q2, then we are on a growth, strong double-digit growth I would say. In terms of government advertising, we are on a decline. In re
Q
Good evening. Sir my first question is with regards to the radio? We can see that the advertising revenue has grown by 18% over the previous year so could you tell the sectors which are contributing?
Pawan Agarwal
We had a low base last year. Again, we do not look at last 2019- 2020 base and on a 2019-2020 base compared to last year we grew by 17% but on a 2019- 2020 base we have grown by about 6% so we look at 2019-2020 as a base for all revenue growth internally. Okay now my next question is with regards to the print business? We can see that the ad revenue for print business channels have surpassed Q2 FY2020 levels so what has contributed to it and also there has been no mention of it anywhere in the results? So, the education category is growing. The response category is growing. Real estate is boom
Q
Yes, Ms Riya you were talking about some whistleblower in the numbers.
Riya
Yes, annual report so basically there was a mention that there were some whistleblower complaints during the year so if you could just elaborate what is it about? Yes sure so what happened we have a strong whistleblower mechanism in our system where people can let us know if they find and if they feel that anything going wrong anywhere and we keep getting these complaints from the whistleblowers and we have a proper committee and proper team those who look into each and every such complaint and once the complaint has found substantial our team goes to the ground because we are spread in 12 sta
Q
My first question is we are building a product for which we want consumer to pay especially in digital. We have reached recently over the last three years what insight have we got about the consumer and how has the product evolved?
Girish Agarwal
I think in last three years product has evolved in a big way and the numbers are there to show that from a mere base of couple of lakhs today we are at 15 million in three years time. That is eight times growth, so I think that clearly indicates that our experiments with the product and the traction from the consumer in fantastic. Okay and we paid last year around Rs.19 Crores and Rs.5 Crores to business head of digital was there some one off and can you tell have we reached the peak of investment in the digital space and what would be the expense per year in digital business? If you remember
Q
Congratulations for good set of numbers here. I have a question regarding the trade-off between the volume and pricing both on the print and radio terms so how has been the progress as compared to the previous quarter-on-quarter from the pricing side and on the volume side also as compared to the pre-pandemic levels?
Girish Agarwal
Sir right now the entire focus is to grow the volume and that is the reason our volume is slightly higher than the pre-pandemic level now, so that is a positive indication and that is the number showing in the growth also. As far as the yield is concerned we have taken yield up in certain categories but nothing worthwhile to really mention, but one yield improvement has happened that people those who used to advertise inside pages we have been able to motivate them to come onto the front page and jacket and all that and that is how the yield has further improved on that and I guess the same re
Q
Thank you for the opportunity. Just one question from my side Sir you mentioned that government revenue the visibility is good and we faced some challenges over the last two years with regard to government advertising so it is fair to assume that those issues have been resolved?
Girish Agarwal
Yes, looks like. Got it and related to pre-COVID levels where would government revenues be today? Slightly down, but hopefully going forward should show some improvement. Understood thank you.
Q
Sir I wanted to ask if we are planning to launch an English edition of a newspaper or something like that?
Girish Agarwal
No sir we have no plan to launch any new language now. Okay that is all thank you.
Q
Congrats on the good set of numbers to start with. I am just trying to check what is the monetization plan of the digital not only from a subscription standpoint but also from an advertisement standpoint on the app?
Girish Agarwal
On the app advertising, we want to hold for a while. The idea is to give an amazing experience to a reader because we have been hearing from a lot of readers that when they open up any app the ads become very intrusive. They are on your face and you do not like that so we want to create a great experience for the reader. That is the reason we have not opened up the advertising on the app and as for the subscription is considered, we are working on it and doing some experiments here & there and there and going forward we should have some news for you on that. Can we assume say six months to one
Q
Thank you so much. First, I wanted to ask you how much is the net cash on our balance sheets as of now?
Girish Agarwal
Roughly around Rs.470 Crores is the net cash and bank balance in the books. Zero Debt. Zero debt and Rs.470 Crores cash. Second, I am looking at the balance sheet we have got the right assets of round figure Rs.430 Crores? Now against this I mean basically it is capitalizing of rentals so what is the annual rental we have? Can we come back to you sir on this. We do not have exact number on the table right now with us. Okay so should I expect a call or an email on this? Prasoon Pandey from our investor relations will get in touch with you Sir. Thank you. Third I wanted to ask; you made a commen
Q
Thank you for giving the opportunity again and the follow-up to the previous question Sir on the circulation copy we had a peak copy of 56 lakh and now we are at 43 lakhs so we are at 75% roughly so any chances of these copies now going up or this is now the established base?
Girish Agarwal
I would say Sir that 56 lakh copies base we have been also evaluating that. We ran a major scheme just before that so I think we got a big flip because of that. Suddenly we lost some copies because of COVID. Also, in last one year time we have increased the cover price. In last two years time we have increased the cover price also and so I think considering all this are we happy with the current number we are not, but idea is that how fast and how far we can reach that is the whole thing we are working on so let us see. We are for example at 42 lakhs to 43 lakh copies. The idea is that how can
Q
Thank you everyone for your participation and time on this earnings call today. I hope we responded to your queries that were raised today and we will always be happy to be of assistance through our investor relation department headed by Mr. Prasoon Kumar Pandey for all your further queries. Take care everyone and stay safe. We wish all of you a very, very Happy Diwali and a prosperous New Year. Thank you and have a great evening.
Management
Speaking time
Girish Agarwal
71
Riya
23
Moderator
14
Ankit Shah
11
Pawan Nahar
11
Dharmesh Sangvi
10
VP Rajesh
7
Pawan Agarwal
6
Mohan Kulappi
5
Ravi Goenka
4
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Opening remarks
Pawan Agarwal
Thank you very much and a very good evening to everyone and thank you for joining the Q2 FY2023 DB Corp earnings conference call. We will begin the call by highlighting the key financial performance of half year and quarter ended September 30, 2022, followed by key operational updates. The past quarter witnessed robust growth in advertising with many hitherto muted segments like consumer durables returning to the fold in a big way. If you recollect, we had indicated that a strong trend of resurgence in print is being witnessed where advertisers both large and small are considering print to be a more trustworthy and effective medium for utilizing their advertising spends. As India's largest print media company, our editorial strength has undoubtedly helped our performance this quarter. Consolidated half year advertising revenue grew by a strong 51% to Rs.7,181 million versus Rs.4,742 million of H1 FY2022. Circulation revenue recorded a growth of 2% to Rs.2,312 million against Rs.2,265 m
Girish Agarwal
Thank you Pawan. Good evening and thank you everybody for joining us. The past six months have been extremely news heavy with the ongoing geopolitical tension and inflationary pressures that have created quicker than normal responses from governments. In India though, the economic revival continues, and this quarter aided by the forthcoming festival season has been extremely good. As Pawan stated earlier, we have been able to deliver very robust results, very strong Q-o-Q as well as the Y-o-Y performances across all segments. We are hopeful that at this pace the industry will continue from where it left off in fiscal 2020, before COVID. We continue to roll our initiatives to drive more reader acquisitions. At the same time, our editorial strength is being driven through a national campaign called Sachchi Baat Bedhadak. We wish to share some good news about newsprint prices softening which is very, very important for us. Based on the current domestic and international market visibility
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