Strong Q3 ad growth; expect even better Q4: DB Corp

Girish Agarwaal, director, DB Corp, says that the company saw a turnaround in advertising in the Q3 and he expects Q4 to end on a stronger note as well. The momentum in advertisement is seen across categories which is a positive sign.  

Also read: Confidence in global economy improves: World Econmic Forum survey Below is the edited transcript of his interview to CNBC-TV18. Q: After a couple of tepid quarters advertising growth is back in double digits. Was this a turnaround quarter for advertising?
A: After three though quarters, finally the company touched the decent double digit number almost 12 percent of advertising growth. January also looks strong so far, so even this quarter should end on a decent note.   Q: Can you give us more data on that because one reason could have been that last quarter was a festive quarter but you are saying it is spilling over to this quarter, which means many segments are seeing continued traction?
A: The last quarter, which was a festive quarter and the same festivity stayed in the last year also. So, year-on-year, there has been a growth of 12 percent. January, which is not a festive quarter but growth, continues in this quarter also. We saw decent numbers in last 15 days of January. So, we feel that the momentum, which was waiting to be picked up in the advertising, is coming in and numbers are looking strong, not only in specific category but all across whether it is automobiles or fast moving consumer goods (FMCG) or lifestyle. All categories are showing decent growth and it is a positive sign. Q: Good enough for you to be confident about double digit growth for this quarter as well on the ad revenue front?
A: We are hopeful that it should happen because advertising has to reflect the sales which is picking up in the market and few categories which are striving hard to ensure that they sell in the market, they need to go back to advertising. In the last two-three quarters, many marketers were lying low on the commentary that if the sales are not happening then why should we advertise but they realized that it works the other way around. One needs to keep pushing the customer so he is tempted to buy. Q: You had a couple of other problems including newsprint inflation etc and that was attacking margins along with the ad revenue sluggishness but are you feeling more confident now that margins can remain stable even for the calendar year?
A: The cost of newsprint on quarter to quarter, i.e. Q2 and Q3 is only 1 percent growth which indicates that the newsprint prices have flattened out and we are getting similar indications going forward. This is a major relief to the entire industry on the cost side of the newsprint. We saw around 28 percent growth in our PAT. This indicates that we have been able to control the cost in various segments, other elements. Most importantly, the emerging editions of Maharashtra and Jharkhand are panning out well, gaining the growth and hence investments on those editions is coming down, which is improving our PAT and EBITDA. Q: A word on the radio business which seems to have grown more than 20 percent in the quarter?
A: In the last two-three years, growth in radio has been higher compared to the print maybe for a simple reason because the total size is small. Twenty one percent growth in radio is good but the size is pretty small to brag about it.