DB Corp's Q3FY14 net profit jumped 34 percent year-on-year to Rs 94.5 crore, compared to Rs 70.6 crore in the third quarter of last fiscal. Non Executive Director Girish Agarwaal says overall advertising revenue grew 18 percent. Taking out the election advantage, ad revenue grew 15 percent, he says.
Also Read: DB to launch Bihar edition; sees 17-20% growth in Q3
Agarwaal says total exposure on loan is limited and the company is not preponing loan repayment. Preoperative expenses on Bihar were already factored in the last quarter, he says. It takes about three years for new markets to reach break-even, he adds. Bihar business will start with over 1.70 lakh copies.
Below is the verbatim transcript of Girish Agarwaal's interview on CNBC-TV18
Q: Tell us about the segment wise revenues and how you have done this quarter both in terms of radio business as well the print business and in general what is the expectation going ahead?
A: The overall advertising revenue for this quarter is around 18 percent growth and out of which the larger if I take the election money out because there has been election advantage also in the last quarter. Around 15 percent is the actual growth. Apart from elections, the big category which has shown a growth is automobile, lifestyle, fast moving consumer goods (FMCG) and real estate. Because of Diwali season these categories were prominent in the market and we were able to take this growth importantly in all our markets especially Gujarat, Madhya Pradesh and Rajasthan, they featured pretty well in the last quarter.
Q: We also understand there has been some slight reduction from March levels in terms of your borrowing. So, can you take us through where they currently stand at and is there any plan to lower your debt going forward and also where would we expect your finance cost to now stabilise?
A: If you look at our finance cost, we are pretty minimum on that and the borrowing which has gone down and largely because of whatever the repayment were due, we have paid that and out of the money there is a six monthly payment to be done on the balance loan which we are doing as per schedule. So, there is no preponement of repayment happening from our side since the total exposure on loan is limited.
Q: Have you factored in any of the Bihar launch expenses into this quarter and will it extend into the next couple of quarters as well?
A: Preoperative expenses on Bihar were already factored in the last quarter and also maybe some part in the month of January also, after January 19 when we are launching our Bihar edition, there will be regular operational expenses on investment in Bihar and that will also be part of the profit and loss (P&L) going forward.
Q: Any rate hikes that you have taken during this quarter and any which are planned going forward?
A: We have taken some, I would say not a rate hike but more of yield improvement in most of the advertising markets of ours, for example wherever we are discounting heavily, we have reduced the discount and make it much more beneficial in terms of win-win situation for us in the client also. However, in the cover price, we have taken some rate improvement in few markets. That is a very selective call has been taken in markets of Haryana, some markets of Madhya Pradesh or in Gujarat or in Rajasthan. So, overall there has been some improvement in that also.
Q: You did say that you have taken a couple of rate hikes, will your margins look better in 2014, better than 30 percent that you have clocked in this quarter?
A: We all are working for it and we are confident about it.
Q: You had earlier expressed some interest in inorganic expansion. Can you take us through if there is anything concrete happening on that front?
A: So far no. I have been having lunches and dinners with lot of people but nothing has materialized so far.
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