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Buy DB Corp; target of Rs 266: Angel Broking

Angel Broking is bullish on DB Corp and has recommended buy rating on the stock with a target of Rs 266 in its January 21, 2013 research report.

January 23, 2013 / 02:43 PM IST
 
 
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Angel Broking is bullish on DB Corp and has recommended buy rating on the stock with a target of Rs 266 in its January 21, 2013 research report.
 
“For 3QFY2013, DB Corp (DBCL) reported a robust performance on the earnings front, registering a 27.7% yoy growth to Rs71cr, higher than our expectations on account of reduction in losses in emerging editions from Rs14.4cr in 3QFY2012 to Rs5.6cr in 3QFY2013.”
 
“For 3QFY2013, DBCL posted an 11.2% yoy growth in its top-line to Rs439cr, in line with our expectation of Rs438cr. The company reported a healthy growth of 10.9% yoy in advertising revenue to Rs318cr aided by festive season and strong growth of 15.7% yoy in circulation revenue to Rs73cr. Among the other segments, the company’s radio business reported a robust advertising revenue growth of 21.7% yoy to Rs19cr. At the operating level, the EBITDA grew by 25.3% yoy to Rs119cr on account of reduction in losses of emerging editions as well as cost rationalization measures such as improving ad edit ratio, and pagination efficiency, among others. Consequently, the OPM expanded by 306bp yoy to 27.2%. A reduction in losses of the emerging editions from ~Rs54cr in 9MFY2012 to ~Rs28cr in 9MFY2013 indicates that the company is on track to meet its guidance of reducing its losses from Rs77cr in FY2012 to Rs44cr in FY2013.”
 
“At the current market price, DBCL is trading at 15.8x FY2014E consolidated EPS of Rs14.5. We maintain our Buy view on the stock with a revised target price of Rs266, based on 18x FY2014E EPS, benchmarking it to our print media sector valuations (which are at ~15% premium to our Sensex target valuation multiple). The downside risks to our estimates include 1) sharp rise in newsprint prices in INR terms, and 2) higher-than-expected losses/increase in the breakeven period of the new launches,” says Angel Broking research report.


Public holding more than 90% in Indian cos


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To read the full report click on the attachment

first published: Jan 23, 2013 02:43 pm

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