DB Corp (Buy, PO Rs285) 􀂄 BofA Merrill Lynch,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


DB Corp (Buy, PO Rs285)
􀂄 We forecast ad growth of 13% yoy during FY12E and 15% yoy during
FY13E, led by strong growth in retail advertisers. With a strong presence in
many of the key markets such as Madhya Pradesh, Chattisgarh, Harayana,
Rajasthan and Gujarat, DBCL’s revenue mix is well diversified compared to
peers and is likely to be less impacted, in our view.
􀂄 We expect ad growth to accelerate over the next two years given the recent
expansion in key markets such as Maharashtra and Jharkhand. DBCL
should be able to monetize on its recent expansion in Maharashtra and
Jharkhand given the readership data will be available from FY13 onwards for
Jharkhand and from FY14 for Maharashtra.
􀂄 We expect EBITDA margins to recover from FY13E, led by lower losses in
Jharkhand/Maharashtra, a potential delay in its plan to launch in Bihar to 4Q
FY13E and reduction in newsprint costs.
􀂄 The stock trades at 8x our FY 2013E EV/ EBITDA, at the lower end of its
trading band of 8-12x. Even assuming that ad growth declines to 10% YoY in
FY13E vs. an estimated 15%, we see 10% potential upside to the stock. Buy
with a PO of Rs285.