Key takeaways of the call  

With gradual opening up of economy certain level of economic activity has come back and that led to much improved Q2FY21 performance for the company.  

All the markets that the Dainik Bhaskar Group operates in, primarily, Tier-II and Tier-III cities, have been returning to normalcy at a rate that is outpacing the metros.  

H1FY21 performance of the company is reflective of the disruption in the first quarter due to COVID Pandemic. However beginning mid-July 2020seeing phenomenal traction on sequential basis on almost all parameters, i.e. operations, advertising revenues and circulation. 

With Navratri coming in late by a month this year, the advertising revenues from this season shifted from the last week of September to October. Adjusted for this, the company is happy to report that its performance is now approaching near pre-Covid levels.  

The profitability has been witnessing improvement on the back of its relentless cost optimization measures, soft newsprint prices.  

Hopeful of recovering a large part of the performance that was lost to the pandemic. 

The company is witnessing consistent circulation copies growth. Circulation Copies increasing to 78% of the pre-Covid levels (YOY) in July, 80% in August, 81% by the end of September and currently at impressive 86% at overall level as compared with 66% in the month of April.  

As the unlock measures began to unfold the company's advertising revenues, too, are reclaiming pre-Covid levels (YOY) with almost 77% in September (on a like to like basis adjusting for Slippage of Navratri festival to Oct) from 71% in August 2020 and 19% in the month of April 2020. 

Typically about 65% of advertisement revenue is from retail and balance 35% from national advertisers/corporates. While the retail is aback to 70-72% the national advertisers are still at 50% of precovid levels.  

The company has seen good ad traction from education, auto, real estate, pharma and jewellery sectors. FMCG sector ad spend was also increased for announcement of price benefit schemes. Ad revenue from new customers is marginal at 1- 2%  

In terms of vertical the automobile seen growth in Sep 2020 and education due to delay in results shown growth in Sep 2020 and continuing in Oct 2020 as well.  

Big clients are back to business and startedadvertising, but the smaller clients are holding back as they face cash flow issues.  

Dainik Bhaskar was perhaps the only newspaper in the country that published "mega" editions in its major markets like Shimla 144 pages, Bikaner - 130 pages, Indore – 128 pages, Ahmedabad - 80 pages, Raipur - 80 pages, Bhopal - 72 pages, Ujjain - 60 pages, Hoshangabad - 60 pages, that have helped advertisers signal their return to the market, and more importantly, their efforts to tap into the pent-up demand in the upcoming festive season.  

On digital the company is building loyal user base currently. Monthly users on digital platform/app increased four times in last six months. The digital segment is growing at higher rate than industry average and time spent on app by users has increased. 

The company was helped by softness in news print prices which was about Rs 35500/tonne in Q2FY21. Expect the price will go down by 1-2% in Q3FY21.  

The company targeted Rs 125 crore of cost saving for FY21 and this was achieved in H1FY21 itself and looking at further more cost saving for current fiscal in second half. About 60-70% of cost savings will be permanent in nature and will benefit the company in FY22 also.  

Pages per copy in September was 18 and currently it is 19. They are planning to increase it to 21 pages i.e. equivalent to average pages per copy in Q3FY20. Cover prices were increased in range of 5-12% in markets like MP, Jharkhand, Punjab and Rajasthan which resulted in better realization at Rs 2.72 per copy. 

Expects incremental 2% growth each month in circulation and is expected to reach normal level in three to four months. Number of average copies sold during the quarter was at 42.68 lakh. 

Radio in metro markets recovered up to 60-65% and expect coming festival season to provide fire.  

Expect both Print and Radio to complete full recovery in six months.