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Analyst Research Report Snapshot


DB Corp. (DBCL) - Qtr. Update - Dated - July 19, 2013




Axis Capital Limited


19 Jul 2013





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DB Corp (DBCL) continued to record strong ad revenue growth (up 20.4% YoY in Q1 vs. 12% growth in H2FY13 and 7% growth in FY13) on steady improvement in ad yield. We expect (a) higher election spend and (b) uptick in local and national ad revenue growth to drive ad revenue growth over FY13-15. We revise our ad growth assumption to 15% in FY14 (vs. 12% earlier), which drives our FY14E and FY15E EPS upwards by 10% and 9% respectively. Maintain BUY with revised TP of Rs 280 (16x FY15E EPS of Rs 17.5), implying 13% upside from CMP of Rs 248. The stock trades at PE of 18.6x FY14E EPS of Rs 13.4 and 14.3x FY15E EPS of Rs 17.5. Key highlights  Ad revenue (77% of total revenue) growth was driven by higher spends across education, auto and lifestyle sectors and higher government spending due to upcoming elections in Madhya Pradesh, Chhattisgarh and Rajasthan  Circulation revenue increased 17% YoY (up 4.6% QoQ) to Rs 767 mn, primarily driven by cover price increase in few mature and emerging markets  Radio revenue grew ~23% YoY to Rs 183 mn (up ~20% in FY13), which was driven by improvement in yields  EBITDA margin expanded 720 bps YoY to 29.6% in Q1 due to margin expansion across matured editions (35.5% in Q1 vs. 31% in FY13) and lower losses from emerging editions Regards, Chirag Negandhi (ED & Deputy Head of Research) Institutional Equity Research Axis Capital Ltd Tel.: + 91 22 4325 1106 Ankur Periwal (VP - Media) Institutional Equity Research Axis Capital Ltd Tel.: + 91 22 4325 1118

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