Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DB Corp (DBCL.BO; Rs231.20; 1L)
Takeaways from Mumbai - DBCL presented at the Citi India Conference. Below
are key takeaways.
Advertising growth remains robust - Mgmt sounded positive on the advertising
growth outlook across all regional markets, supported by a healthy pick-up in
national advertising. It expects volumes to remain in strong double-digits coupled
with a yield improvement of ~10-12% in FY12 (similar to FY11), given the recent
rate hikes.
Maharashtra launch - 40% lead in Aurangabad in the first week - DBCL's
Aurangabad launch with ~80K copies made it the leading player on Day 1 of the
launch (~20% higher than the incumbent leader Lokmat). Interestingly, mgmt
noted that Lokmat circulation has come down in the first week of DBCL's launch,
widening its circulation leadership gap to ~40%. Mgmt believes this is largely on
the back of good content (launch survey results incorporated) and the
introductory offers.
Rising newsprint headwinds? - Mgmt noted that after only a 7-8% yoy
newsprint cost inflation in FY11, recent trends seem to suggest a 12-15% cost
inflation in FY12. We believe in addition to the new launches, this may further
impact near-term profitability. Mgmt also noted that in case of higher than
expected newsprint cost inflation, the Bihar foray might get delayed by a few
months.
Updates on new launches - The Jharkhand launches are expected to lead to
negative EBITDA contribution of ~Rs150m in FY12 with break-even expected in
FY13. In Maharashtra, post the Aurangabad launch, the company intends to
launch Nasik in July, followed by Jalgaon in 2HFY12. All Bihar and Maharashtra
additional launches are likely to be completed in the next two years. DBCL
expects Rs1bn of capex for the new launches over FY12-13.
No plans for UP - Mgmt believes that despite the size of the UP market (Rs8-
9bn), it may refrain from entering the market given that the growth rates are
relatively muted compared to other states. It may not be financially lucrative to
launch in UP as it would require 1.4-1.5m copies to be competitive. In fact the
Marathi market is likely to be as big as UP in the next 2-3 years, given superior
growth rates and competitive dynamics.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DB Corp (DBCL.BO; Rs231.20; 1L)
Takeaways from Mumbai - DBCL presented at the Citi India Conference. Below
are key takeaways.
Advertising growth remains robust - Mgmt sounded positive on the advertising
growth outlook across all regional markets, supported by a healthy pick-up in
national advertising. It expects volumes to remain in strong double-digits coupled
with a yield improvement of ~10-12% in FY12 (similar to FY11), given the recent
rate hikes.
Maharashtra launch - 40% lead in Aurangabad in the first week - DBCL's
Aurangabad launch with ~80K copies made it the leading player on Day 1 of the
launch (~20% higher than the incumbent leader Lokmat). Interestingly, mgmt
noted that Lokmat circulation has come down in the first week of DBCL's launch,
widening its circulation leadership gap to ~40%. Mgmt believes this is largely on
the back of good content (launch survey results incorporated) and the
introductory offers.
Rising newsprint headwinds? - Mgmt noted that after only a 7-8% yoy
newsprint cost inflation in FY11, recent trends seem to suggest a 12-15% cost
inflation in FY12. We believe in addition to the new launches, this may further
impact near-term profitability. Mgmt also noted that in case of higher than
expected newsprint cost inflation, the Bihar foray might get delayed by a few
months.
Updates on new launches - The Jharkhand launches are expected to lead to
negative EBITDA contribution of ~Rs150m in FY12 with break-even expected in
FY13. In Maharashtra, post the Aurangabad launch, the company intends to
launch Nasik in July, followed by Jalgaon in 2HFY12. All Bihar and Maharashtra
additional launches are likely to be completed in the next two years. DBCL
expects Rs1bn of capex for the new launches over FY12-13.
No plans for UP - Mgmt believes that despite the size of the UP market (Rs8-
9bn), it may refrain from entering the market given that the growth rates are
relatively muted compared to other states. It may not be financially lucrative to
launch in UP as it would require 1.4-1.5m copies to be competitive. In fact the
Marathi market is likely to be as big as UP in the next 2-3 years, given superior
growth rates and competitive dynamics.
No comments:
Post a Comment