Buy DB Corp; target Rs 302: Angel Broking
Brokerage house Angel Broking is bullish on DB Corp (DBCL) and has recommended 'Buy' rating on the stock with a price target of Rs 302 in its research report dated July 18, 2013.
July 24, 2013 / 12:45 IST
Angel Broking's report on DB Corp (DBCL)
"For 1QFY2014, DB Corp (DBCL) reported a robust top-line and bottom-line performance, beating our expectations as well as street estimates. Its top-line grew 19.2 percent yoy to Rs 449cr, primarily due to a robust 20.4 percent yoy growth in advertising revenue to Rs 325cr (mainly driven by higher yields). Sectors such as lifestyle, education, automobile, FMCG and real-estate have contributed to strong growth in advertising revenues. The company also reported a strong 16.9 percent yoy growth in circulation revenue to Rs 77cr. Among the other segments, the company’s radio business reported a robust advertising revenue growth of 22.1 percent yoy to Rs 17cr.""At the operating level, the EBITDA grew by 69.1 percent yoy to Rs 133cr, aided by strong performance of mature editions, reduction in losses of emerging editions as well as cost rationalization measures such as improving ad edit ratio, and pagination efficiency, among others. Mature editions reported a 573bp yoy margin expansion to 36 percent. Losses in emerging editions stood at Rs 5.8cr in 1QFY2014 compared to Rs 12.1cr in 1QFY2013. Consequently, the OPM expanded by 873bp yoy to 29.6 percent and net profit grew by 74.1 percent yoy to Rs 76cr.""DBCL has launched an Akola edition and is expected to launch an Amravati edition in August. The Management is bullish on the advertising market (especially local advertising) in Maharashtra. Therefore, it is also considering more launches in other tier-2 cities such as Nanded and Latur."Outlook and valuation: "At the current market price, DBCL is trading at 14.4x FY2015E consolidated EPS of Rs 17.2. We maintain our Buy view on the stock with a revised target price of Rs 302, based on 17.5x FY2015E EPS, benchmarking it to our print media sector valuations (which are at ~15 percent 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.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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