Pawan Agarwal – Deputy Managing Director, Girish Agarwaal – Non Executive Director addressed the call

Highlights of the call

D.B. Corp registered a 4% fall in consolidated sales to Rs 607.03 crore for the quarter ended June 2019.

Advertising Revenues stood at Rs 442 crore against Rs 454.9 crore.

Circulation Revenue stood at Rs 131.4 crore against Rs 134.5 crore.

OPM rose 230 bps to 28.9% which saw OP rise 4% to Rs 175.50 crore.

PBT fell 3% to Rs 143.94 crore. PAT fell 4% to Rs 93.73 crore.

The company enjoys a dominant position in all its major markets of presence.

To further strengthen its dominance, it continued with efforts towards editorial and circulation expansion initiatives through this quarter as well.

Despite the challenging macro environment, the management is confident of current strategies to deliver enterprise growth and building profitability aided by overall cost control and moderation in newsprint prices going ahead.

Its business strategy is focused on product strengthening, along with a series of strategic initiatives to orient the editorial team in this direction, and complement its circulation expansion initiatives.

Its efforts have delivered strong results and is reflected in the latest published readership and circulation number, by MRUC and ABC respectively.

The latest Circulation drive "Life Badal jayegi, Boss" featuring Superstar Salman Khan is a continuation towards strengthening reader engagement, thus giving a push to circulation efforts.

Its Non-print businesses continue to progress well, building great value for readers and advertisers.

The company continues to build synergies and leverage the competitive strengths across each business segment.

With the formation of a stable and decisive government in Centre, the semi-urban and rural consumption and demand cycle is expected to stabilize.

As the government continues with its efforts and initiatives to boost economic growth, with the company's execution excellence, the management is confident to deliver the desired levels of growth.

Dainik Bhaskar continues to be the India's largest circulated newspaper as per Audit Bureau of Circulation July- December'2018.

Dainik Bhaskar maintains its position as the largest circulated national daily of Rajasthan as per the Audit Bureau of Circulation (ABC) results for the six month period (July – December 2018). Dainik Bhaskar added 76,212 copies in just 1 year , reaching a circulation of over 16.25 lacs copies

Dainik Bhaskar's well-implemented Circulation expansion strategy has delivered strong results on account of increased market share.

As per recent IRS survey, all Hindi Newspapers added 93.27 Lac new readers.

Dainik Bhaskar added 63.55 lac new readers, a growth of 13.71% majorly in legacy markets of Madhya Pradesh-Chhattisgarh, Rajasthan, Haryana, Punjab, Gujarat and in newer market of Bihar.

Dainik Bhaskar continues to maintain its position as No 1 newspaper of Urban India.

As per last ABC circulation reported data, it continues to maintain No 1 Circulated newspaper of India as well as leadership in Madhya Pradesh-Chhattisgarh, Rajasthan, Gujarat, Haryana, Chandigarh, Punjab (4 urban Cities), besides maintaining close no 2 formidable position in other markets.

In line with the company's Circulation Expansion Strategy, the company has devised a print media campaign "Life Badal Jaayegi, Boss" featuring Salman Khan to further aid the circulation growth.

The company has launched mega & biggest scheme of print sector "Jeeto 21 crores" across the footprint in 12 states with the aim to acquire new readers and retention of existing readers.

Its circulation strategy is complimented by strong editorial and product enrichment efforts along with unique and impactful reader engagement initiatives.

Advertising revenue was impacted due to print and digital.

Education fell 3%, Auto fell big time and Lifestyle also fell.

Government and election category grew. But government standalone (without election ads) fell.

Real estate sector grew but due to initiatives take by the company. Real estate sectpor is still under pressure..

In Gujarat, education advertisement fell due to unfortunate fire accident in one of the coaching classes. Due to the accident there were raids on coaching classes and they chose to remain silent.

Market share in Rajhastan is 60% up from 50%.

Gujarat its MS grew from 34% to 38%.

The company will not give revenue from Digital business for the next 4 quarter due to secrecy. After 4 quarters it will decide what to do.

It got advantage of DBVP pricing in Q1.

Language paper organizations have written to the government to take back hike on duty on Newsprint. They are positive that government will reconsider the hike in import duty by 10%. If it has to happen it will happen in 30 days time. If the government does not roll back, it will be additional headwind for the industry.

The quality of the Indian newsprint does not support double width newspaper machine (machines which produces 2 newspapers at a time).

Consumption of Newsprint in India is 25 lakh tons every year. Production of Indian newsprint is just 10 lakh tons. In last 5 years it has just grown from 7 lakh tons to 10 lakh tons. Indian newsprint manufacturer are not investing in double width paper machine newsprints.

There is no cover price rise for the last 2 years. It does not intend to increase the cover price in the near future as the newsprint price has fallen.

Q1 2019 newsprint blended was Rs 40/kg (Indian and imported), in Q2 it grew to 44.5/kg. In Q3 it went further up to 45.5 kg and in Q4 of 2019 it came back to Rs 44.50/kg. In Q1 2020 it fell to Rs 40.20/kg. The management believes in coming quarter it will fall by a rupee or two.

Other expenses fell significantly due to IND AS. Even without IND AS the company saved Rs 24 crore compared to Q4. Out of that, Rs 5 crore is savings from travelling and communication. In Q4 2019 the company spent Rs 8 crore on survey which was not in Q1.

Radio business

For the quarter, sales of from the Radio Division grew 19% to Rs 37.65 crore and accounted for 6% of total. PBIT grew 128% to Rs 9.09 crore and accounted for 6% of total.

Radio business is maintaining its leadership position in Chandigarh / Haryana / Punjab / Rajasthan / Madhya Pradesh & Chhattisgarh and continues to be the largest player in Rest of Maharashtra.

Phase 3 stations bottom line is now positive, on the back of strong inventory management, programme profile, strong cost efficiencies and growing popularity.