Maharashtra operations to turn profitable by March: DB Corp

Below is the transcript of Pawan Agarwal’s interview to CNBC-TV18’s Latha Venkatesh and Sonia ShenoySonia: Just take us through the segment wise performance this time around, how have you done both in the printing and publishing business as well as radio business this quarter?A: The overall revenues have grown by about 9.2 percent, the circulation revenues have grown by about 15 percent. If you look at the EBITDA margins, the margin has been at about 26.5 percent for the consolidated business with a 14 percent growth in EBITDA. So a lot of cost efficiency was also placed in the previous quarter. If you look at the minus print the radio has done about 33 percent growth in its revenue at about 38 percent margin, has closed the quarter about Rs 23 crore of revenue. Digital has also grown very well at about 57 percent growth from last year same quarter. We are very happy with the performance, happy to share with you that Bihar has been doing well with about 175,000 copies now maintaining the leadership positions in Patna. Maharashtra also some of the editions in Maharashtra which were launched earlier should also do a breakeven in Q4 and Jharkhand should also be positive in the last quarter of this year. So overall the print is looking very positive and we are hoping that the government policies, the reforms should help us grow to the second half of the year better than the first half of the year. Of course if I look at the categories, real estate is doing well, the auto mobile is doing well, FMCG is doing well. What is yet to perform is political and education. Latha: How is all that translating into revenues for you? How much did ad revenues grow for the quarter in question and is it better this quarter because it is festival quarter?A: The July-August-September quarter only had about seven days of the festival with most of the festival actually which will be seen in the December quarter. So the ad revenues have grown by about 9 percent on a total basis with 50 percent of the growth coming from yield and the balance still from the volume. The sectors which have done well if I remove the government billing from last year, the total revenues have grown by about 12 percent on an overall basis.

Latha: How is the environment looking for the current quarter and the next, will you be able to push up ad rates or at least our volume of ads as good as the last festival season?A: It is looking well, so far the sentiment has started to sink in, real estate is positive, they want to come back with higher spends, automobile wants to come back with higher spends. The entire dotcom is the new category so they are spending well in print as well as radio. So hopefully the next two quarters we are getting better signals from the advertisers and there is a lot of dependency on what the government will do in the next quarter and how the productivity also grows in the next quarter.  Sonia: What was the exact cost that you had to incur because of the Bihar launch and how much of pressure has it put on your margins?A: We have about 4.5-5 percent so if I look at my overall EBITDA it is about 26.5 percent margins for this quarter. If I take out the cost of the emerging markets my mature EBITDA stands at about 32 percent. So effectively about 4-5 percent of our margin is going in funding the Bihar, Jharkhand and Maharashtra. Most of the editions of Maharashtra would become EBITDA positive by the end of Q4. Jharkhand would become EBITDA positive by the end of Q4. Patna is just launched this year so it would take time. But the other two should contribute to the profitability hopefully next year.