Buy DB Corp; target of Rs 251: Dolat Capital
Dolat Capital is bullish on DB Corp has recommended buy rating on the stock with a target price of Rs 251 in its research report dated July 18, 2019.
July 19, 2019 / 02:43 PM IST
Dolat Capital's research report on DB Corp
DBCL’s 1QFY20 performance was weak due to a 4% YoY decline in advertising revenue. However, RM tailwinds (-6% YoY) and costs efficiencies (-12% YoY) supported EBITDA (+4.4% YoY). IndAS 116 implementation had positive impact on EBITDA of ` 90mn and negative on PAT of ` 10mn. DBCL’s flagship daily, the Dainik Bhaskar, is the 2nd most widely read Hindi daily, as per the IRS. But, DBCL leads in advertising revenue led by better and diversified state-mix of readership.
We estimate revenue/EBITDA/earnings to grow at a CAGR of 2.2/18.6/15.6% over FY19-21E led by economic recovery and thus in advertising revenue. This is aided by softened newsprint prices. Our rating is BUY, with a TP of ` 251 (+42%) @ 12x FY21E EPS (a discount of 35% to 3/5/10 years avg PE).
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