A surge in advertising revenue is the reason the results came in so positively, says Girish Agarwal, direction, DB Corp.
Bhaskar group owned DB Corp reported a 74.31% rise in its consolidated net profit in its Q1 earnings (Y-o-Y), bouyed by advertising revenue, says Girish Agarwaal, direction, DB Corp.
In an interview to CNBC-TV18, Agarwaal says the high advertisement revenue was driven by high educational, lifestyle and auto sector spends. The company saw the ad revenue rise by 21 percent (YoY) from Rs 286 crore to Rs 345 crore.
Agarwaal bets on the continuity of growth momentum on the back of a good monsoon season and increase in government spends due to elections in many states.
Below is the edited transcript of Agarwaal's interview to CNBC-TV18
Q: Good set of numbers, take us through what went right, have you seen a sizeable increase in subscriptions, realizations, take us through the key positives this quarter?
A: Our main growth has come from the advertising. We have grown around 21 percent in advertising. So, that is a large chunk of growth for us in the business. Most states- Rajasthan, Gujarat or Punjab, they have all performed well. More importantly, all the segments, for example real estate or automobile, have performed well. The real estate growth is almost to the tune of 38 percent year-on-year (Y-o-Y). So, all the efforts, all the innovations we tried in selling, has worked pretty good so far.
Q: Do you think you will be able to push the envelope then and push up your rates as you get closer to the festival season?
A: That is one thing we keep internally telling ourselves all the time, that we need to do it more. How much we can continue it going forward will be revealed only when the next quarter comes in. However, one good thing we have seen in the market is that wherever we have taken the rates up or the discounts coming down, that has helped us because there has not been major volume play, it is all the yield play in our revenue so far.
Q: Your ad revenues grew about 20 percent in this particular quarter. Going ahead, what kind of trajectory do you think you can sustain in terms of ad revenues in the next couple of quarters or even for the whole of FY14?
A: We feel this momentum should continue in the quarters to come because the monsoon in our markets have been pretty good and also, there are elections in couple of our markets. So, the government spend on the market has improved. Hence, there are a lot of jobs being created by the government, a lot of facilities being provided by government to the people. So, with all that money coming into the market, we feel that this number would hopefully continue and maybe get slightly better.
Q: What about the radio business, what kind of realizations did you do over there this quarter and what kind of improvement are you hoping to see in the quarters that are coming up?
A: In radio, we have increased our topline by 22 percent but at the same time, the EBITDA has gone up by almost 69 percent in that business. Since we have been able to control the cost, going forward if this 22-24 percent growth continues in radio then there will be a substantial jump on the EBITDA margin.
Q: Therefore, if you will have to give us some idea of a guidance for the full year, what can you say, will you be able to maintain this kind of a run rate on income and more importantly margins, nearly 30 percent?
A: If one looks at our mature edition market, we are at 36 percent and the overall margin is at around 30 percent. If these kind of numbers continue, then the margins at this range should be able to maintain. We are working hard for that.