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Weekly Tactical Pick: DB Corp

Multiple levers of earnings improvement in FY20, including the upcoming elections, make DB Corp a worthy investment idea

March 08, 2019 / 10:17 AM IST
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Moneycontrol Research

As a tactical pick, we are recommending DB Corp (CMP: Rs 192, M Cap: Rs 3,369 crore), one of the largest print media companies known for its flagship daily Dainik Bhaskar. Its print business has a presence in 12 states in north, central and western India. It also operates a radio business under the brand name 94.3 My FM.

On a consolidated level, the company derives majority of its revenue from advertisements issued in the publications (around 60 percent of total revenue in FY18) and sale of publications (22 percent of total revenue in FY18).

Print sector had been reeling under multiple issuesGrowth of the print industry was disrupted by demonetisation and implementation of Real Estate Regulatory Authority (RERA) and Goods & Services Tax (GST), which adversely impacted advertising revenue. Consequently, revenue growth of the newspaper industry in FY18 was the lowest in a decade at 3.9 percent, as per KPMG report. Just when the sector started stabilising with ad spends reverting back to normal levels, rise in newsprint prices jolted sentiment again.