Buy DB Corp; target of Rs 292: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal is bullish on DB Corp and has recommended buy rating on the stock with a target of Rs 292 in its April 16, 2013 research report.
 
“DB Corp- Management acknowledged macro uncertainty and has accordingly positioned itself for moderate growth. However, there have been some encouraging trends, with ad growth in 2HFY13 expected to improve to ~10 percent v/s NIL growth in 1HFY13, supported by inflection in national advertising. We see limited risk to our 11 percent ad revenue CAGR estimate for FY13-15, which should drive 18 percent earnings CAGR. While plans for further investment in Maharashtra and launch in Bihar remain in-place, DBCL is likely to spread these over a time period such that there is limited incremental stress on profitability. We note that emerging edition EBITDA loss has declined by ~75 percent in the last five quarters.”
 
“DBCL’s sales and market development strategy is focussed on creating dominant or leadership positions across its footprint. This can drive mid-single-digit circulation growth and low-teen circulation revenue growth over the medium-to-long-term. DBCL follows a premium pricing model which helps create headroom for cover price. A unique aspect of distribution strategy is that ~40 percent of its copies are sold under “cash model” where the company sells directly to hawkers thus improving cash conversion. DBCL is focussed on original content led by exclusive partnerships (like Time magazine, Harvard Business Review) and expert columns. “Stimulating and analytical” content is the key focus area. DBCL’s editorial team uses technology for reader engagement and has been taking up various social issues.”
 
“We expect 18 percent earnings CAGR over FY13-15, driven by 11 percent ad revenue CAGR. The stock trades at 16.5x FY14E and 13.9x FY15E EPS. Maintain Buy, with a target price of INR292 (18x FY15E EPS),” says Motilal Oswal research report.

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