Hold DB Corp; target of Rs 80: ICICI Direct

ICICI Direct's research report on DB Corp

DB Corp’s revenues dipped 34.8% YoY to Rs 346.4 crore amid current Covid-19 led situation. Print & digital ad revenue declined 37.8% YoY to Rs 226.3 crore while radio ad revenue also registered de-growth of 42.4% YoY to Rs 18.2 crore. Circulation revenue fell 19.7% YoY to Rs 103.3 crore mainly due to lower circulation of copies. EBITDA was down 27.8% to Rs 71.1 crore while margins at 20.5%, up 201 bps YoY as the company benefitted from softened newsprint prices and cost rationalisation measures. Consequently, reported PAT was at Rs 28.5 crore, down 62.3% YoY.

Outlook

However, we remain cautious considering challenging ad growth outlook in near/medium term and maintain HOLD rating. We value the stock at 6x FY22E EPS with a target price of Rs 80.