May 18, 2013, 02.43 PM | Source: CNBC-TV18
Yield improvement boosted DB Corp's revenue growth in fourth quarter and the company is optimistic of maintaining margins at current level.
Speaking to CNBC-TV18 about the financial performance of the company, Agarwaal noted that DB Corp's maturity editions margins stood at 31 percent and losses on emerging editions reduced from Rs 78 crore to Rs 34-35 crore.
He further added that improvement in yields led to growth in revenues. DB Corp's fourth quarter consolidated net profit was up at Rs 55.3 crore versus Rs 45.4 crore, a year ago. Its consolidated total income was up at Rs 398 crore versus Rs 353.2 crore, Year-on-Year.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: You had 13 percent jump in ad revenues. Was it just volumes or did you increase rates as well in the quarter gone by?
A: Fortunately, the entire growth has come because of yield improvement. There has been no volume growth at all and that is good for business going forward because generally when market is down - we tend to offer more benefits to the market with a hope that the volume should improve.
However, this time we took a call that we are not going to go down on rates and in fact we will improve the yields and as a result, the volume has been flattish but there has been a decent growth in terms of the overall topline.
Q: HT Media told us earlier, that they could see the first signs of the market turning around and having bottomed out are you seeing the same signs in the markets that you are in?
A: Yes. I do agree with that because if one looks at Q4, there has been 13 percent growth and even for the months of April, May growth looks to be on similar lines. The reason for that, especially for our market is because the government spending has increased and that is increasing consumption in the market furthermore. So, I see growth particularly in categories like automobile, government spending, fast moving consumer goods (FMCG), education etc. Therefore, overall things look like they have bottomed-out already.
Q: Is it looking consistent enough for you to extrapolate what could be reasonable ad revenue growth for FY14 or even the first half of it though?
A: I really can’t say that because in the last two quarters things looked fine but I can only hope that it is going to be that way for the next 12.
Q: What about margins then? Would you say you are feeling confident about holding margins at the recovery that you have been able to do this quarter, all the way up to 23 percent?
A: Yes. Margin wise we are more comfortable because if one looks at maturity editions margins, we are now at 31 percent. My losses on the emerging editions, last year which were at Rs 78 crore, has come down to almost Rs 34-Rs 35 crore this year, there has been a major improvement on that.
Also on the cost front, we have been able to control the cost pretty well. If one looks are Q3 and Q4 costs, we have taken a dip on the cost. Overall, from the margins point of view things are looking in control.
Q: What is your outlook? Looking at all your businesses for FY14 now, on what you delivered in FY13, which was by your standards bit of a sluggish kind of year?
A: The numbers should improve because overall, if one looks at the ad growth the annualised number is around six-seven percent but Q4 is 13 percent. I assume that the Q1, going forward if that double digit number continues and then the margins can further go up. For example, my consolidated margin today on earnings before interest, taxes, depreciation, and amortization (EBITDA) is around 25 percent and this should move up.
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