Buy DB Corp; target Rs 293: ICICIdirect.com
ICICIdirect.com is bullish on DB Corp and has recommended buy rating on the stock with a price target of Rs 293 in its research report dated July 19, 2013.
July 22, 2013 / 19:20 IST
ICICIdirect.com's report on DB Corp
"DB Corp reported its Q1FY14 results, which were considerably better than our estimates thanks to superior ad growth. The topline came in at Rs 449.4 crore against our estimate of Rs 420.9 crore, growing 19.2 percent YoY. The topline was driven by an impressive print ad growth of 20.4 percent YoY. The strong ad growth, coupled with lower newsprint prices as a percentage of revenue led to an EBITDA margin expansion of 928 bps YoY to 29.6 percent. Consequently, EBITDA recorded strong growth of 73.7 percent YoY to Rs 132.8 crore. PAT also beat our estimates by a wide margin and stood at Rs 76.1 crore against our estimate of Rs 56.8 crore. The above 20 percent ad growth seen in this quarter, along with double digit ad growth seen in the last two quarters defies the economic slowdown trend witnessed in other sectors. Though increasing newsprint prices due to rupee depreciation would pressurise margins subsequently, we believe strong ad growth would more than offset it. We continue to rate the stock at 16x FY15E EPS to arrive at a target price of Rs 293.""The stock is currently trading at 13.6x FY15E EPS while it had traded at an average PE of 20.2x in FY11 and 20.0x in FY12 when ad growth was in high double digits. With impressive ad growths in the last three quarters especially in this quarter, we believe the stock would inch towards the multiples seen in FY11 and FY12. We have valued the stock at 16x FY15 EPS to arrive at a target price of Rs 293. We maintain BUY," says ICICIdirect.com research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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