July 07, 2016 / 14:09 IST
Axis Direct's research report on DB Corp
We return enthused from our meeting with DB Corp (DBCL)’s management, as ad revenue growth revived in Q1FY17. This was led by strong volume uptick across key sectors like auto, education, consumer durables, realty etc. Management highlighted improved visibility of uptick in ad spends, which will drive 13-15% ad revenue growth in FY17. Also, continued benefits from cover price hikes undertaken earlier will aid circulation revenue to grow 12-14% in FY17.
To factor in the above, we revise our FY17 print ad revenue growth to 13% (11% earlier; FY18 ad growth maintained at 14%), resulting in ~7% rise in our FY17/18E EPS. Maintain BUY with revised TP of Rs 455 (18x FY18E; Rs 425 earlier), as we expect DBCL to derive significant operating leverage benefits with revival in ad spends. The stock trades at 18.3x FY17E EPS of Rs 20.5 and 15x FY18E EPS of Rs ~25.
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