DB Corp stock edges higher after strong Q1 results; CLSA maintains 'buy', raises target price

DB Corp board announced an interim dividend of Rs 7 per equity share (70 percent on the face value of Rs 10 per share) for the financial year 2024-25.

Shares of DB Corp edged higher on July 18 as CLSA maintained an 'outperform' rating on the stock following the media company's positive financial results for the fiscal first quarter.

DB reported a 50 percent year-on-year increase in net profit at Rs 117.8 crore as compared to Rs 78.7 crore a year ago. Its consolidated total income also grew by 6.8 percent YoY to Rs 616.2 crore during the April-June quarter.

CLSLA raised the target price on the stock to Rs 450 from Rs 330 earlier. The company’s advertising revenue has exceeded estimates, and EBITDA has been significantly boosted by lower newsprint costs, it noted.

Additionally, there has been a notable increase in monthly active users (MAU) on its news app, further enhancing its attractiveness. Coupled with its attractive stock valuation, these factors position DB Corp favourably in the market.

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DB Corp's total expenses dropped slightly by 2.3 percent YoY to Rs 458.8 crore in the June quarter of FY24. Its advertising revenue grew by 8.4 percent to Rs 427.7 crore during the quarter under.

The media company’s circulation revenue stood flat at Rs 119.2 crore in Q1FY25 compared to Rs 119.9 crore in the corresponding quarter last year.

At the operating level, DB Corp's EBITDA grew by 40.4 percent on-year to Rs 190.9 crore, and Ebitda margin expanded by 700 basis points to 31 percent in June from 24 percent last year.

Additionally, the company's board announced an interim dividend of Rs 7 per equity share (70 percent on the face value of Rs 10 per share) for FY25.

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At 10:58 am on July 18, DB Corp shares were trading marginally higher at Rs 369.40 apiece on the National Stock Exchange (NSE). So far this year, the stock has rallied 41 percent, outperforming benchmark Nifty, which has risen nearly 13 percent during this period.

In the last one year, the stock's 93 percent returns have beaten Nifty's returns of 24 percent by a margin.

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