Buy DB Corp; target of Rs 368: Centrum

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26 Aug, 2025 12:21

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Centrum's research report on DB Corp

We maintain our BUY rating on DB Corp with a target price of Rs368. We expect the company to post high single digit ad growth for FY19E as key sectors such as real estate, BFSI continue to disappoint with management focus on FMCG and auto to driver growth. Further general election would help in Q4FY19 to drive ad growth. Newsprint price inflation is expected to be ~18-20% for FY19E which would further dampen margins as the current prices are ~$750/MT. High circulation increase in legacy markets and Bihar would further increase newsprint consumption. Turnaround in new Phase-III radio station, lower losses in digital vertical and Rs3bn buyback offer comfort.

Outlook

We maintain BUY rating on the stock, with a TP of Rs368 as we value the company on adjusted OCF (AOCF = OCF – Interest) to EV yield based on five year average cash flows. We have factored Rs3bn buyback in our valuations. Key downside risks being further increase in newsprint prices and subdued ad environment.

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