D B Corp Ltd Q3 FY2025 Concall Summary

Key Takeaways

• Election base effect masks underlying momentum: Q3 revenue fell to ₹655.6 cr against an election-boosted prior year, but stripping out government billing, the quarter grew mid-single-digit and the nine months grew almost double-digit.
• Circulation is the active turnaround bet: A ₹14 crore reader prize scheme launched January 3 aims to reverse copy losses, with management targeting a gain of 5 lakh copies over the next year.
• Digital investment is rising, not plateauing: Expansion into UP, Uttarakhand and 14 total states is pushing operational costs higher, and management expects those expenses to keep climbing in coming quarters with no normalization timeline offered.
• Cost discipline and softer newsprint protected EBITDA: Nine-month EBITDA reached ₹525 cr on a higher base, a 39% two-year CAGR, helped by effective cost control and favorable input prices.
• What to watch next quarter: Whether the reader scheme arrests circulation decline, the trajectory of digital expansion costs, and any recovery in the entertainment and cinema advertising category.

Circulation: The Reader Scheme & Volume Recovery Bet

• Volume decline triggered direct intervention: The company lost some percentage of copies in Q3 and the nine months, with overall circulation revenue down roughly 1%, after vendor meetings and local schemes in the first six to seven months "somehow didn't work too much."
• ₹14 crore reader scheme now live: Launched January 3, the scheme offers prizes and assured gifts to motivate lapsed or fringe readers to rejoin, backed by a door-to-door survey.
• Market share is still moving in DB Corp's favor: Management stated the company is gaining market share everywhere, with competition losing more copies than DB Corp has lost.
• Distribution friction in smaller markets: Finding distribution boys in smaller markets is becoming difficult, adding structural pressure to the circulation channel.
• Ambitious volume target set: Management aims to gain 5 lakh copies in the next one year, and is willing to absorb higher newsprint costs to achieve it because more subscribers drive advertising revenue.

Girish Agarwal: "So, to be very honest, if I gain 5 lakh copies in the next 1 years' time and if I have to pay for the newsprint price more, I'll be the most happy person. So, I want to do that because I need more subscriber, I need more readers coming into our fold and the newsprint manage advertising revenue will grow. We'll take care of it from that."

Advertising Revenue: Election Base Effect & Category Mix

• Headline revenue decline is a base-effect story: Total revenue of ₹655.6 cr and advertising revenue both fell against Q3 FY24, which carried election-related government billing; excluding that government billing, Q3 grew mid-single-digit and the nine-month period grew almost double-digit.
• Advertiser diversity sustained growth: Automobile, real estate, education, retail, and jewellery categories all contributed to the non-election growth.
• Education normalization supports Q4: With the education category now normalized, management believes it can pull up Q4 numbers, though it is "keeping fingers crossed."
• Entertainment and cinema collapsed unexpectedly: The category declined 56% in Q3 and 47% in the nine months, surprising management.
• GDP a headwind: Q3 GDP of 6.4% was "certainly a downer," though management hopes for improvement going forward, citing government statements.

Girish Agarwal: "Entertainment & Cinema, I'm surprised 56% decline. It seems nobody is going to watch movies in Bollywood or what."

Digital: Expansion Costs, MAU Ambition & Monetization Experiments

• Geographic expansion is driving costs higher: Digital outreach now spans 14 states including Uttar Pradesh and Uttarakhand, and higher other operational costs tied to this expansion will continue to rise in coming quarters with no timeline given for normalization.
• MAU leadership claimed: Dainik Bhaskar's Hindi and Gujarati news apps hold the #1 position, with MAUs at roughly 1.9 crore, making it the clear digital news leader.
• MAU growth target set: Management expects to grow MAU by at least 5% quarter-on-quarter, though some percentage movement month-to-month is described as "monthly flavour."
• Subscription experiments showing early signals: The company is testing subscription models in certain digital pockets and has seen "some positive results," but a blanket rollout waits until numbers are "firm and steady."
• Digital losses not quantified: When pressed for a loss figure, management pointed to the overall nine-month EBITDA of ₹525 cr and said investors can "be rest assured that we are making very prudent business move."

Girish Agarwal: "But you can see our EBITDA number, and then you can make it out from that, are we making big losses. For example, the 9-month EBITDA is at INR525 crores on a higher base. So, you can be rest assured that we are making very prudent business move."

Costs & Margins: Newsprint, Cover Price Discipline & Cash

• Newsprint tailwind holding for now: Prices are expected to remain stable at current levels for Q4; the trajectory for Q1 and Q2 will depend on dollar behavior.
• Cover price shield for readers: At an average cover price of ₹4.89, management is explicit that it will not pass on any newsprint price increases to readers, preferring to absorb the cost to protect circulation.
• Forward contracts being negotiated: The company is trying to lock in forward contracts with suppliers, but the response is a "mixed basket," with some agreeable and some not.
• Cash balance sits at ₹1,016 crores: The board will take a call on utilization going forward; management noted a 67% dividend payout for the nine months and stated the company is not looking for any acquisition.

Girish Agarwal: "We are at INR 4.89. We don't want to unnecessarily burden our readers by passing on any kind of newsprint prices, if at all, because of dollar something going forward happens. We are clear on that. We don't want to pass it on to them."

Radio & Other Segments

• Radio outperformed the industry: The radio segment delivered 9% YoY revenue growth in the nine months and 6% advertising revenue growth in Q3.
• 14 crore reader milestone reached: The Dainik Bhaskar Group now reaches 14 crore readers across print, digital, WhatsApp channel, and social media platforms.

Guidance & Commitments

Key Metrics