DB Corp - Q4FY20 Result Update - ICICI Securities

DB Corp reported a weak set of Q4FY20 numbers on account of economic slowdown and Covid-19 outbreak. Revenues dipped 17.3% YoY to Rs. 486.7 crore. Print & digital ad revenue declined 20.2% YoY to Rs. 298.7 crore while radio ad revenue also registered de-growth of 16.5% YoY to Rs. 32.6 crore. Circulation revenue also de-grew 5.7% YoY toRs. 120 crore mainly due to disruption caused by lockdown. EBITDA was down 36.7% to Rs. 65.9 crore with margins at 13.6%, down 415 bps YoY. Softened newsprint prices provided some relief on the costs front. Consequently, reported PAT was down 55.8% YoY at Rs. 24.1 crore.

Valuation & Outlook

Post a weak FY20, FY21E outlook also looks challenging for the print industry considering the extended lockdown in Q1FY21E, stretched fiscal (impacting government ads) and dislocation at local business levels. We believe a recovery in ad volume will take time. Among positives, DB Corp has maintained good dividend payout (Rs. 10/share in FY20). Softened raw material prices with cash of Rs. 135 crore will support operational performance in the near term. The stock price has sharply corrected since our last recommendation but we remain wary of promoters' pledge (~35.3% of promoters stake is pledged) and would await removal of the same. We maintain HOLD, valuing it at 6x FY22E EPS for a target price of Rs. 88.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_DBCorp_Q4FY20.pdf

Shares of D B Corp Ltd was last trading in BSE at Rs.76.4 as compared to the previous close of Rs. 76.3. The total number of shares traded during the day was 94102 in over 1519 trades.

The stock hit an intraday high of Rs. 79.1 and intraday low of 76. The net turnover during the day was Rs. 7301029.

Source : Equity Bulls

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