DB Corp bets on monsoon to help post Q2-like show in next 2 qtrs

Media firm DB Corp on Thursday reported 55.9 percent increase in consolidated net profit at Rs 88.51 crore for the second quarter ended September 30, 2016. The company had posted a net profit of Rs 56.76 crore in July-September period of the previous fiscal, DB Corp said in a BSE filing. Net sales on consolidated basis were up 10.45 percent at Rs 521.02 crore as against Rs 471.70 crore in the corresponding quarter of the last fiscal. Total expenses were at Rs 399.74 crore, up 2.35 percent from the year-ago period.

With good monsoon and positive market response the company expects the momentum to continue over the next six months, said Girish Agarwaal, Director, DB Corp.

DB Corp’s other expenses reduced by 14 percent in the second quarter on account of gains made from radio business and from provisions taken in the previous years, Agarwaal added.Below is the transcript of Girish Agarwaal’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: What the street was enthused about is the way your revenues in the print business went up almost 15 percent this time to almost Rs 500 crore. Tell us about how the market has shaped up so far and what is the expectation towards the end of the calendar year?A: The first half has been quite eventful because the first quarter we were at almost 21 percent topline of growth and second quarter, the topline growth was around 10 percent. So, average is 15 and we are hoping that the way things are changing in the country, the monsoon has been fantastic, the market is responding positively, so we hope that going forward, next six months, this momentum should continue.Latha: I had just one doubt in detail. Other expenses are down 13-14 percent. Why is that?A: There is Rs 5 crore of gain we got back from the provision we made in the radio business. That was a Supreme Court order that has been ruled in the industry favour. So, that came back to us. Another Rs 4 crore also came back which we have taken a provision in the earlier years. So, that is a Rs 9 crore advantage that came to us.Latha: And also, materials consumed is up 9.4 percent. Have news print prices not fallen?A: No, the news print price has increased by 2.7 percent in this H1 compared to last H1. Also, the circulation has gone up. If you remember last year we had launched a couple of editions so that annualisation impact is coming in this year for that.Sonia: In your radio business, the ad revenue growth was very strong this time, almost 25 percent. What is the genesis of this and do you think this is sustainable?A: We have seen this kind of growth in the radio business from the last almost 4-5 quarters because most of the radio companies are looking for a rate correction because they have a fixed inventory so there is no point selling inventory cheap. So most of them are doing it together and that is the reason not only in our company, you see other radio companies also, you see a strong topline growth happening all across.Latha: Why are your print ad revenues up only 9 percent? Any page we open in Bombay, the first 2-3 pages are full page ads and in spite of it, only 9 percent? I thought every paper company should report 90 percent rise in ads.A: I am thankful to you for inspiring us to do 90 percent, but the reason why this quarter the growth has been only 9 percent, it could have been almost 15 percent, because we had a longish monsoon in our markets. So, Madhya Pradesh, Rajasthan could not be approached for almost 15-20 days, some of the region. Also, the Shradh Paksh, which was in the third quarter last year, this year, it is in the second quarter. So all that impacted around 3-4 percent.