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Accumulate DB Corp; target Rs 302: KRChoksey

KRChoksey is bullish on DB Corp and has recommended accumulate rating on the stock with a target price of Rs 302 in its July 20, 2013 research report.

August 01, 2013 / 12:51 PM IST
 
 
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KRChoksey's report on DB Corp


"DB Corp's Q1FY14 result was above our estimates mainly on account of higher than estimated ad revenue growth. The company reported net sales of Rs 449crs, a healthy growth of 19.2 percent YoY primarily driven by 21 percent YoY growth in advertising revenue. EBITDA stood at Rs 133crs, a robust growth of 70.9 percent driven by cost rationalization across the board. Consequently EBITDA margins increased by healthy 890bps to 29.6 percent. At net profit level, the company reported Rs 76crs, a growth of 76.8 percent over Q1FY13. Higher revenue base and improved EBITDA margins led to growth in net profitability by 550bps to 17.0 percent. Revival in ad spends and steady growth in circulation revenue will drive healthy revenue growth in future .The management has guided no new major launch in near term which leaves further room for margin improvement in future."


Valuation: "DB Corp reported ad revenue growth for third consecutive quarter reflecting ad revival for print media. Circulation revenue showed another quarter of steady growth. We believe DB Corp will cash in Numero Uno position in the major markets it operates in and will post healthy revenue growth in future. Cost rationalization and absence of any new launches in near future supports EBITDA margin improvement going ahead. At current price, the stock is trading at 14.1x PE to its FY15E earnings. We maintain ACCUMUATE with a target price of Rs 302," says KRChoksey research report.

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first published: Aug 1, 2013 12:51 pm

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