DB CORP Key takeaways 􀁠 ::Kotak Sec Consumer Congerence,

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DB CORP
Key takeaways
􀁠 Advertising revenues. The national advertising market is under pressure driven by an
uncertain economic growth and inflation environment. However, the >3L local advertisers
cultivated by DB Corp has helped with robust local advertising growth continuing. DB
Corp is confident of maintaining mid double-digit advertising growth (like-to-like basis on
core markets) in FY2012E in an uncertain environment.
􀁠 Advertising volumes. Advertising growth in the uncertain environment is being driven
largely by volumes and moderately by yields. The advertising environment is not
conducive to rate hikes; DB Corp continues to push for higher rates but effective passthrough
is likely to be in mid single-digits in FY2012E.
􀁠 Newsprint prices. Domestic newsprint prices had gone to high levels (the gap between
domestic and international newsprint has become zero) in the past few months. DB Corp
has seen a modest (3-5%) correction in August. The impact will be felt in 2HFY12E when
the existing inventory gets consumed and DB Corp expects further correction in pricing
given demand-supply conditions will also improve.
􀁠 New markets/expansion. Maharashtra has been the best launch for the company in a
decade with Divya Marathi becoming the dominant print brand in Aurangabad and
Nashik. The response from local advertising market has also been better than the
expectation of the company in Aurangabad. The next edition is slated to be launched
from Jalgaon in September 2011.