Hold DB Corp, target price Rs 106: ICICI Securities

ICICI Securities has hold call on DB Corp with a target price of Rs 106. The current market price of DB Corp Ltd. is Rs 99.65. Time period given by analyst is one year when DB Corp Ltd. price can reach defined target.

DB Corp Ltd., incorporated in the year 1995, is a Small Cap company (having a market cap of Rs 1748.79 Crore) operating in Media & Entertainment sector.

DB Corp Ltd. key Products/Revenue Segments include Income From Advertisement, Newspapers, Printing Job, Waste Sales, Other Operating Revenue and Power for the year ending 31-Mar-2019.


Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 307.98 Crore, down -33.07 % from last quarter Total Income of Rs 460.14 Crore and up 42.79 % from last year same quarter Total Income of Rs 215.69 Crore. Company reported net profit after tax of Rs -22.25 Crore in latest quarter.


Investment Rationale
DB Corp’s (DBCL) Q2FY22 ad revenue recovery has been good, and stands at ~95% of pre-covid levels ex-government segment. It has seen double-digit growth in ad revenue during the ongoing festive season vs pre-covid levels. Circulation has reached 92-95% of pre-covid levels, and has seen 9% rise in realisation to offset rising newsprint inflation. Newsprint price inflation restricted on old contracts in Q2FY22, but is expected to rise by 8% in H2FY22, which should eat into ad revenue recovery benefit. DBCL is working to retain Rs1bn of cost saving in FY22 as well which will further support EBITDA. The brokerage cuts EPS estimates by ~1% each for FY22E / FY23E, but increase the target price to Rs106 (from Rs93) as we raise P/E multiple to 8x (from 7x).

Promoter/FII Holdings
Promoters held 71.81 per cent stake in the company as of 30-Sep-2021, while FIIs owned 12.21 per cent, DIIs 4.14 per cent.