October 25, 2016 / 17:19 IST
Axis Direct's research report onDB Corp DB Corp’s (DBCL) Q2FY17 performance was in line with our estimates. Print ad growth grew slower at 8% YoY (20% in Q1FY17) as in auspicious days (shraadh period) werein Q2FY17vs. Q3 last year. Adjusted for this, management indicated print ad growth at 12% given healthy uptick across auto (+22%) and education (+16%) space, while other sectors were muted. DBCL highlighted no loss in market share due to its ad yield-focused strategy over the last 2 years; however this led to some loss of business in Q2 given its no compromise stance on pricing.
We expect DBCL to derive strong operating leverage benefits with continued uptick in ad volumes. Upcoming state elections in Punjab (2017), Gujarat (2018) and Madhya Pradesh, Chhattisgarh/ Rajasthan (2019) will further aid ad growth. Maintain BUY with TP of Rs 470 (18x FY18E).
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