Volumes in print advertising key growth driver in Q1: DB Corp

Media firm Dainik Bhaskar Group Thursday posted a 61.66 percent increase in consolidated net profit at Rs 103.95 crore for June quarter. Speaking to CNBC-TV18, Girish Agarwal, Director of the company, said DB Corp's growth in print advertising this time is backed by volumes last quarter. The company's consolidated EBITDA margins stood at 31.8 percent versus 25.3 percent year-on-year (YoY) and Agarwal said believes margins will be sustainable at around current levels going forward. "There has been growth in all sectors," he said.The circulation growth came at 13.3 percent from mature markets. DB Group publishes seven newspapers, including India's largest Dainik Bhaskar, and operates 'My FM' radio station in 17 cities.Below is the verbatim transcript of Girish Agarwaal’s interview to Sonia Shenoy and Reema Tendulkar on CNBC-TV18..Reema: It has been a good quarter for you. What positively surprised the street is your print ad revenue growth of 20 percent. What lead to that and do you believe that is sustainable?A: From last one year we have been driving the yield agenda and we took some hit in the growth last year and now the market has accepted that. So, we are back with the volume also. So, this 21 percent growth what you see in the print advertising is largely backed up by the volume.Sonia: There is a lot of visibility that we are seeing in the ad spends as well. That is what a lot of the other players indicate to us. The last time we spoke with you, you guided for a 13-15 percent ad revenue growth for the year. Based on what you have done this quarter would you stick to that guidance for the full year?A: We are trying our best and this number which has come apart from our efforts also do with the market situation. So, there we are seeing some kind of growth happening in the market in all the verticals whether it is the real estate or automobile or government and all. So, if that also continues coupled with our efforts we should be able to do this number month-on-month (M-o-M).Reema: What also positively surprised was the margin improvement from 25.3 percent to 31.8 percent. Any one offs to this margin expansion and what is your guidance on margins going forward?A: In our business whatever is the topline growth comes straightaway comes largely to the earnings before interest, taxes, depreciation and amortisation (EBITDA) margin for the simple reason because our newsprint cost is already there and if you see in this quarter there has been hardly any growth, any increase in the newsprint price. Because of that whatever is the topline growth has come to the EBITDA and that is the reason you see strong margin there.Reema: So, it is sustainable?A: Yes, we believe so.Sonia: Everyone is getting digital these days and so is DB Corp. Can you tell us a bulk of your revenues, where does it come from and in terms of sites how many do you have, how has your digital reach improved and what kind of revenues only from digital are you hoping to see over the next 6 months or so?A: As you know we have three large sites, Hindi, Gujarati, Marathi and also English. So, Dainik Bhaskar which is a Hindi website is the largest Hindi news website in the country and Gujarati also Divya Bhaskar is also the largest in Gujarati. Our last year topline was Rs 46 crore and in the digital 100 percent revenue come from the advertisement because we are not on a subscription model yet. So, we are hoping that the kind of growth which digital as a segment is showing next year this number should be on a much higher side. The most important what we are focussing currently is on the page views and also the unique visitors. As per the Google analytics we are at around 42 million unique visitors on a monthly basis and crossing almost 1.2-1.3 page views on a monthly basis. So, our focus is to get more unique visitors coming on to our side and page views and advertising I am sure will catch up going forward.Reema: You said that the ad revenue growth of nearly 21 percent was backed by volumes. But any guidance on the ad revenue growth for the full year FY17 and is there any scope to improve ad rates this year?A: We have taken a major yield increase last year. So, I don't think this year we will looking at any major growth on the yield or the rates. It is largely to play with the volumes because we lost certain volume last year and I am happy to note that the growth of the volume is happening across the sector including the government also. So, if this trend continues and the kind of monsoon we are seeing if all that is positive in the market then this number should continue like that.Sonia: So, you will hold on to that 13-15 percent, right?A: Yes, it is better to say less and deliver more.