9 July 2014
Update | Sector: Media
D B Corp
BSE Sensex
25,445
S&P CNX
7,585
CMP: INR314
TP: INR410
Buy
Analyst meet takeaways: Radio and Digital focus
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Radio a success story; building usage in digital for future monetization
DBCL IN
183.4
345/211
2/-19/4
57.6
1.0
Financial Snapshot (INR billion)
Y/E March
2015E 2016E 2017E
Net Sales
EBITDA
Net Profit
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
21.1
5.89
3.52
19.2
20.6
71.5
28.6
24.3
16.4
4.4
9.6
2.8
23.8
6.75
4.16
22.7
18.3
82.2
29.5
25.6
13.8
3.8
8.1
3.3
26.7
7.64
4.83
26.3
16.0
94.5
29.8
26.3
11.9
3.3
6.9
3.8
DB Corp hosted an analyst meet to discuss its non-print business strategy
Radio and digital segments contribute ~5% to DB Corp’s consolidated revenue
but are growing faster (25% YoY revenue growth in FY14).
FY14 radio business revenue was INR0.8b with EBITDA margin of 40%. Radio
growth to be led by 1) phase III (~100 towns coming up in DB Corp markets) and
2) expected government approval to broadcast news which will let DB Corp
leverage its existing strength in news content.
FY14 digital business revenue was ~INR190m with PAT loss of ~INR65m. With
monetization still at a nascent stage, focus is on growing unique visitors
(currently ~14m) and page views (currently at 383m/month).
Radio: Strong EBITDA growth led by operating leverage
DB Corp has 17 radio stations under the brand ‘My FM’. All radio stations
are in its existing print markets across seven states - Rajasthan, Haryana,
Punjab, Gujarat, Maharashtra, Madhya Pradesh and Chhattisgarh.
Radio business posted revenue CAGR of 19% and EBITDA CAGR of 100%
over FY10-14 as EBITDA margin expanded from 5% in FY10 to 40% in FY14.
In phase III, new frequencies are expected to be auctioned in ~100 cities in
the current DB Corp footprint. DB Corp would bid for these based on the
market attractiveness and reserve price. Entry into metros is ruled out.
Shareholding pattern (%)
As on
Mar-14 Dec-13 Mar-13
Promoter
DII
FII
Others
74.9
2.7
18.5
3.8
75.0
3.0
17.7
4.4
75.0
5.5
14.4
5.2
Digital: Yet to reach monetization phase; focus on building usage
Note: FII Includes depository receipts
Stock Performance (1-year)
375
325
275
225
175
D B Corp
Sensex - Rebased
Key digital properties:
News websites in Hindi (dainikbhaskar.com),
Gujarati (divyabhaskar.com), Marathi (divyamarathi.com), and English
(dailybhaskar.com).
Digital business has reached ~14m unique visitors and 383m page views per
month. Almost 60% of visitors are from metros and international markets.
Digital revenue grew 56% YoY to ~INR190m (1% of consolidated revenue).
FY14 PAT loss in the digital business stood at ~INR65m.
During CY14, DB digital launched three new properties – UP online edition,
bollywood content website (bollywoodbhaskar.com) and a financial news
website focusing on the SME/investor segment (moneybhaskar.com).
Ad growth to accelerate; maintain Buy with TP of INR410
While ad environment has been subdued due to ‘model code of conduct’
impacting government vertical, we expect a strong rebound from 3QFY15.
We expect 19% EPS CAGR over FY14-16E driven by 14% ad revenue CAGR.
The stock trades at a P/E of 16.4x FY15E and 13.8x FY16E. DB Corp has
attractive FY15E dividend yield of 2.8% and RoE of 29%. Maintain
Buy
with
a target price of INR410 based on 18x FY16 EPS, implying 31% upside.
Shobhit Khare
(Shobhit.Khare@MotilalOswal.com); +91 22 3982 5428
Investors are advised to refer through disclosures made at the end of the Research Report.

D B Corp
Radio and Digital: Contribution to consolidated DB Corp revenue
Radio
3.8
3.7
3.9
Digital
4.2
4.3
0.2
FY10
0.2
FY11
0.5
0.8
1.0
FY12
FY13
FY14
Source: Company, MOSL
My FM: Geographical footprint
My FM stations
Chandigarh
Amritsar
Ajmer
Jalandhar
Jaipur
Bhopal
Gwalior
Jabalpur
Bilaspur
Kota
Raipur
Jodhpur
Nagpur
Ajmer
Surat
Indore
Ahmedabad
Source: Company, MOSL
9 July 2014
2

D B Corp
Radio: Revenue and EBITDA growth (INR m)
Revenue
EBITDA
EBITDA margin (%)
801
576
406
5
20
FY10
FY11
FY12
FY13
FY14
469
18
84
25
144
220
672
33
318
40
Source: Company, MOSL
Digital revenue trajectory (INR m)
190
122
74
22
30
FY10
FY11
FY12
FY13
FY14
Source: Company, MOSL
Site wise unique visitors (m)
DailyBhaskar,
2.8
Geography wise unique visitors (m)
4
4
DivyaBhaskar,
2.2
14
6
DainikBhaskar,
9.0
India (non-metro) India (metro)
International
Total
Source: Company, MOSL
Source: Company, MOSL
9 July 2014
3

D B Corp
DB Corp: A Snapshot
Print ad revenue (INR b)
YoY (%)
Circulation revenue (INR b)
YoY (%)
Av circulation/day -Group (m)
YoY (%)
Newsprint price (USD/ton)
YoY (%)
RM cost/Revenue (%)
Revenue mix (%)
Print ad revenue
Circulation revenue
Other
FY06
3.5
1.7
2.8
603
51
66
31
3
FY07
4.9
38
1.6
-2
3.3
14
630
4
49
72
24
4
FY08
6.3
30
1.8
10
3.5
6
640
1
39
73
21
6
FY09
7.0
10
1.9
9
3.6
5
645
1
42
73
20
7
FY10
7.7
11
2.1
6
3.5
-3
531
-18
31
73
19
8
FY11
9.5
23
2.1
4
4.0
14
594
12
30
75
17
8
FY12
10.7
12
2.4
13
4.6
16
650
9
35
73
17
10
FY13
11.3
6
2.8
16
4.7
1
604
-7
34
71
18
11
FY14
13.3
17
3.2
15
4.8
3
597
-1
34
FY15E
15.1
14
3.6
12
5.1
6
609
2
33
FY16E
17.1
14
3.9
8
5.3
3
621
2
32
71
71
72
17
17
16
11
11
12
Source: Company, MOSL
DB Corp: One year forward P/E (x)
28
24
20
16
12
17.4
17.9
13.8
16.2
PE (x)
Peak(x)
Avg(x)
Median(x)
Min(x)
23.6
Source: Company, MOSL
9 July 2014
4

D B Corp
Financials and valuations
Income Statement (Consolidated, INR million)
Y/E March
Net Sales
YoY (%)
Operating expenses
EBITDA
EBITDA margin (%)
Depreciation
Interest
Other Income
PBT
Tax
Tax rate (%)
PAT
Minority Interest
Adjusted PAT
Change (%)
Extra-ordinary items
Reported PAT
2012
14,638
15.7
11,088
3,550
24.3
506
155
115
3,004
982
32.7
2,022
2
2,021
-12
0
2,021
2013
15,923
8.8
12,163
3,760
23.6
581
80
213
3,313
1,132
34.2
2,181
0
2,181
8
0
2,181
2014
18,598
16.8
13,595
5,003
26.9
643
75
239
4,524
1,606
35.5
2,917
0
2,917
34
149
3,066
2015E
21,108
13.5
15,213
5,895
27.9
677
73
186
5,331
1,813
34.0
3,519
0
3,519
21
0
3,519
2016E
23,774
12.6
17,022
6,752
28.4
701
73
329
6,307
2,144
34.0
4,163
0
4,163
18
0
4,163
2017E
26,710
12.3
19,068
7,642
28.6
725
73
474
7,318
2,488
34.0
4,830
0
4,830
16
0
4,830
Balance Sheet (INR million)
Y/E March
Share Capital
Share Premium
Reserves
Net Worth
Loans
Minority Interest
Deffered Tax Liability
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Current Liab. & Prov.
Creditors
Provisions & other liabilities
Net Current Assets
Application of Funds
E: MOSL Estimates
2012
1,862
2,373
5,036
9,271
2,100
15
746
12,132
9,487
2,235
7,252
681
460
7,059
1,186
2,484
1,364
2,026
3,321
2,183
1,137
3,739
12,132
2013
1,863
2,373
6,056
10,291
1,574
11
834
12,709
10,299
2,816
7,483
900
807
7,136
1,299
3,083
1,190
1,564
3,617
2,345
1,272
3,519
12,709
2014
1,864
2,373
7,231
11,467
1,464
0
885
13,816
11,054
3,458
7,596
929
724
8,446
1,732
3,280
1,094
2,340
3,879
2,483
1,396
4,566
13,816
2015E
1,864
2,373
8,885
13,121
1,464
0
885
15,470
11,454
4,136
7,319
929
724
10,900
1,902
3,723
2,621
2,655
4,403
2,818
1,584
6,497
15,470
2016E
1,864
2,373
10,841
15,078
1,464
0
885
17,426
11,854
4,837
7,018
929
724
13,714
2,057
4,193
4,473
2,991
4,959
3,174
1,784
8,755
17,426
2017E
1,864
2,373
13,111
17,348
1,464
0
885
19,697
12,254
5,562
6,692
929
724
16,922
2,227
4,710
6,624
3,360
5,571
3,566
2,005
11,351
19,697
9 July 2014
5

D B Corp
Financials and valuations
Ratios
Y/E March
Basic (INR)
Adjusted EPS
Growth (%)
Cash EPS
Book Value
DPS
Payout (incl.Div. Tax.,%)
Valuation
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors. (Days)
Leverage Ratio
Debt/Equity (x)
2012
11.0
-12.3
13.8
50.7
5.0
53
2013
11.9
7.9
15.1
56.2
5.5
53.7
2014
15.9
33.7
19.4
62.5
7.3
53.3
2015E
19.2
20.6
22.9
71.5
8.7
53.0
2016E
22.7
18.3
26.5
82.2
10.3
53.0
2017E
26.3
16.0
30.3
94.5
11.9
53.0
19.7
16.2
11.6
3.1
5.0
2.3
16.4
13.7
9.6
2.7
4.4
2.8
13.8
11.8
8.1
2.3
3.8
3.3
11.9
10.4
6.9
2.0
3.3
3.8
23.0
18.1
22.3
18.0
26.8
23.5
28.6
24.3
29.5
25.6
29.8
26.3
62
30
72
71
30
70
64
34
67
64
33
68
64
32
68
64
30
68
0.2
0.2
0.1
0.1
0.1
0.1
Cash Flow Statement (INR million)
Y/E March
EBITDA
Other Income
Interest Paid
Direct Taxes Paid
(Inc)/Dec in Wkg. Cap.
CF from Op.Activity
(inc)/Dec in FA + CWIP
(Pur)/Sale of Investments
CF from Inv.Activity
Issue of Shares
Inc/(Dec) in Debt
Dividends Paid
Other Financing Activities
CF from Fin.Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2012
3,550
115
-155
-931
-242
2,337
-1,080
-297
-1,378
0
-272
-1,065
10
-1,327
-368
1,731
1,363
2013
3,760
213
-80
-1,044
56
2,906
-1,030
-347
-1,378
1
-526
-1,172
-5
-1,702
-174
1,364
1,190
2014
5,003
239
-75
-1,406
-1,480
2,280
-785
83
-702
1
-110
-1,554
-11
-1,674
-96
1,190
1,094
2015E
5,895
186
-73
-1,813
-404
3,792
-400
0
-400
0
0
-1,865
0
-1,865
1,527
1,094
2,621
2016E
6,752
329
-73
-2,144
-405
4,459
-400
0
-400
0
0
-2,206
0
-2,206
1,853
2,621
4,473
2017E
7,642
474
-73
-2,488
-444
5,111
-400
0
-400
0
0
-2,560
0
-2,560
2,151
4,473
6,624
9 July 2014
6

D B Corp
NOTES
9 July 2014
7

Disclosures
D B Corp
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D.B. CORP LTD
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9 July 2014
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8