D. B. Corp Limited (DBCORP) Earnings Call Transcript

Ladies and gentlemen, -- good evening, and welcome to D.B. Corp Limited Q2 FY '27 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded. We have with us today the senior management of the DB Corp Limited, Mr. Pawan Agarwal, Deputy Managing Director; Mr. Girish Agarwal, Director; Mr. Lalit Jain, Chief Financial Officer; and Mr. Mushtaq Ali, Senior Vice President, Finance and Accounts, who will represent DB Corp Limited on the call. The management will be sharing the key operating and financial highlights for the quarter ended in H1 ended September 30, 2026, followed by the question-and-answer session. Please note that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Document letting to the company's financial performance have already been e-mailed to you and are available on the website of Stock Exchanges and the company's Investors section. Trust, you have been able to go through the same I now hand the conference over to Mr. Pawan Agrawal. Thank you, and over to you, sir.

Good evening, everyone, and thank you for joining the Q2 FY '27 D. B. Corp. Earnings Conference Call. We will begin the call by highlighting the key financial performance for the quarter ended September 30, 2026, followed by key operational updates across our businesses. Our consolidated total revenues for the quarter stood at INR 614 crores compared to INR 635 crores in Q2 FY '26. EBITDA stood at INR 124 crores compared to INR 115 crores in the corresponding quarter last year, while profit after tax stood at INR 69 crores against INR 93 crores. . As you know, last year, Navaratra festival season was in Q2, and this year, it falls in Q3. So on a like-to-like basis, D. B. Corp advertising revenue and EBITDA registered positive single-digit growth in excluding the impact of this festive shift. This underlying growth reflects the continued strength of the company's established franchise and the steady momentum of its core business. Coming to advertising revenue. Our consolidated advertising revenue stood at INR 411 crores compared to INR 439 crore in Q2 FY '26. While the timing of festive advertising impacted the year-on-year comparison, we remain focused on strengthening advertiser relationships and sustaining engagement across the key markets. Circulation revenue stood at INR 116 crores compared to INR 121 crores in the corresponding quarter last year. On the cost front, newsprint costs increased by 14% during the quarter, primarily due to broader geopolitical uncertainties and related cost pressures. We continue to focus on procurement efficiencies cost optimization and disciplined inventory management to mitigate the impact of higher input costs and preserve operating profitability. Let me now briefly take you to our first half performance for H1 FY '27 and consolidated total revenue stood at INR 1,246 crores compared to INR 1,222 crores in H1 FY '26. Advertising revenue increased to INR 843 crores from INR 832 crores, while circulation revenue stood at INR 236 crores compared to INR 241 crores. For the first half stood at INR 289 crores against INR 297 crores, and profit after tax was INR 169 crores compared to INR 174 crores in the corresponding period last year. Moving on to our radio business. Revenue for Q2 FY '27 stood at INR 39 crores compared to INR 43 crores in Q2 FY '26, while EBITDA stood at INR 11 crores against INR 13 crores -- for H1 FY '27, radio revenue remained stable at INR 82 crores, while EBITDA improved to INR 26 crores from INR 24 crores in the corresponding period last year, reflecting an improvement in profitability. Our digital business continues to be an important long-term growth pillar for the company. We remain focused on strengthening our digital presence through investments and content technology and user experience while building on the reach and credibility of our established media brands. With this, I would now like to hand over the call to Mr. Girish Agrawal. Over to you.

Thank you, Pawan, and good evening, everyone, and thank you for joining us on this call today. The shift in festival-linked advertising activity impacted the quarter's year-on-year comparison. Despite these challenges, our underlying business is best supported by our strong leaders relationship. -- trusted brands and continued relevance among advertisers. Looking ahead, we've been positive about the opportunities in the second half of the year with the festive we expected to support advertising activity across our key markets. We will continue to strengthen our advertisers' partnership, enhance reader engagement and build on our competitive advantage across newspapers, radio and digital -- with a sustained focus on efficiency, innovation and long-term growth. We remain committed to strengthening our market position and creating sustainable well for all our stakeholders. With this, we can now open the floor for the questions and answer session. Thank you.

Thank you very much. [Operator Instructions] Your first question comes from the line of in [ Abhinav Mandora] with Equitas Investments.

My first question -- my first question is regarding the seasonality. As you mentioned, Ratri was there in Q2 last year and this time we have seen in Q3. So what is the revenue guidance on our advertisement for Q3 and for the whole year as a whole and also circulation business? .

See, on the advertising front, as we mentioned to you, because of the 8 days of shift of the season from September to October. We believe there is an impact of almost around INR 40 crores. Now with that shifting into Q3 and the overall momentum, what we believe is there, though in certain parts of India, the monsoon is not playing well because in Rajasthan, even there's a rains happening even today. So I don't know how the overall 3 or next 6 months are going to pan out. especially I'm more concerned about the geopolitical situation. But having said that, looking at the overall momentum which our country has, I'm pretty optimistic on the next 2 quarters also.

Right. I guess, in 1 of our interviews, you had mentioned that we are confident of testing high single-digit early double-digit revenue for the full year for advertisement do you think considering the festive demand will be able to reach somewhere there? .

That's what our endeavor is. Looking at this -- what we've seen in the last 7, 8 days of festival, overall momentum is good. let's hope this continues. .

Now what would have led to the circulation decline, however, since you've mentioned? .

We are at around 38 lakh copies. If you compare the last quarter numbers are almost the same. So all efforts are there to make sure that we continue having the base, but a few percentage here and there is the 1 which is bothering us. but we are working all efforts from that, especially what we are doing in our noncore markets. And that's the area where we are not much bothered about a few copies going down. But in the core markets of ours, we are putting all our efforts to make sure that we maintain the number. .

And are we taking any further Girish?

No We have taken this call, if you remember, a year back or so, that overall, let's face it, there is a change on the number of copies. And furthermore, if we increase the cover price, that will further escalate the decline. So we don't want to do that. .

Got it. And in terms of print and the newspaper cost, we have a mix of tempore as well as None. I assume that we will be also bearing the incremental freight cost going further, how does your guidance on the new strip cost per tonne? And what kind of inventory do we hold for the sense .

See, if you look at the last year to this year, in terms of per tonne cost, there is an increase what we were paying INR 47,000 per tonne average cost we are paying right now almost INR 57,000. So there are almost 20.8% to be more precise is the impact on the newsprint cost. And that is all because of the geopolitical situation. And because the imported prices are up, domestic prices also follow the same route. So once -- and also the freight is on the high side. So we believe that in next Q3 and Q4, this prices should go down by maybe 2% or 3%, but not more than that as what we hear from our suppliers. I think that's 1 area, which the industry is facing are going through right now .

Are we anything any issue and shipments or availability of imported paper, anything on those .

See, this becomes a rate. So when somebody says I have this much quantity to offer. And you know the market is tight, so you lose the leeway on the pricing if you want to secure the supply. That's the problem. .

And inventories, how much do we keep? .

Inventory generally speaking, we keep a few months for the Indian because Indian transportation takes 10 to 15 days maximum and imported around a quarter .

So ideally, now since I think major price has happened in Q2, the further inventory which will come in Q3 would be a much of a higher price versus

No. As I mentioned to you, compared to Q2, the prices may soften down by 2%. But if we compare to last year of Q3 and this year cites an impact of almost 18%, 20%. .

And next, regarding the segmental split, how have all the segments done in Q2 and going forward, where do you see the demand traction from?

So I can give you the breakup, but those breakup will not be useful. Why? -- because the festival season 8 days of Navratra in Q3 this year, so the number looks not apple to a build comparison. Also, furthermore, just to add on, we also lost on some of the government advertising because there was some paielection happening in a couple of states because of the code of conduct. So that advertising also went down.

Okay. But still the sectors are seeing traction on good growth? .

Real estate single digit, ideally, this should have been good double digit, but because of the real festival season going this way. So most of them are almost flat or single digit.

Your next question comes from the line of Lohit Saini with Gram Stock Brokers.

Recently, the company has increased its app subscription price from INR 149 to INR 199. So what is the current revenue contribution from paid subscriptions in -- and how has the price hike impacted our subscriber growth and retention? And 1 more question regarding the upcoming UP exchange. How is the company positioning its digital business to capture the ad opportunities there?

Okay. Let me answer 1 by one. First of all, the price hike, which we have taken from INR 149 million to INR 199 million this all the experimental basis. It's not like some places we have even tried it lesser, even monthly price and all that. So as we mentioned to you, we are doing multiple experiments and digital advantages that I can do an experiment on our cohorts of almost 1 lakh subscriber also. So that's the experiment we are doing and happy to inform you that the results are pretty decent and good. So this experiment will continue. So taking the second question of yours that what will be the impact on the revenue, it's too early to say because this is all just the experiment phase right now. So in a couple of quarters, this will get settled and then we'll get the real number out of it. Coming to the third question of yours, which is about UP election. As we mentioned to you in a couple of calls earlier also, the election advertising is uncertain. So we are working hard for it in terms of readers engagement in UP. Today, we have got huge correct with the readers in UP. We have got very sizable downloads of our monthly active users as well as BAU. Also, we have got a huge network of our journalists in UP. I can proudly boost that today compared to any news organization, our coverage -- ground coverage on UP would be far, far, far higher. So we are very hopeful that during the election time, our subscriber base in UP will certainly go up.

Okay. Okay. And are you seeing any recovery in FMCG ad spends?

If I look at this quarter, FMCG, the FMCG right now is at minus 2%. But as I mentioned, this quarter would be a strong way to comparison. So I would say almost single-digit growth, even considering the festival in this quarter. .

[Operator Instructions] Your next question comes from the line of Pavi Chohan with Care PMS.

My question is caterer NAM declined from $20 million in Q4 to $18 million in Q2 currently. So like there is a consistent decline from past 2 quarters. Any key reasons for this? And how management is looking forward to increase our MA growth?

Two things, just to let you the reason is this. We have tried to reduce the marketing spend on this entire activity because we believe now brands should be able to sustain the readers base based on their own merits and the organic. So we have reduced the marketing spend. There is some impact because of that also. Furthermore, we are trying to do many experiments as we just mentioned about the subscriber value. So there is some impact of air and there of that. But you will appreciate between '18, '19 and the difference on -- if I look at the quarter-on-quarter is around 3% to 4%. .

Okay. And another question as our other expenses have been increased like in both on absolute terms and in a percentage of in could you please define that with the costs are driving this? Is it major with the flat cost which company is bearing right now?

Sorry, I'm not able to hear this question of yours. Can you go again, please? .

So if I look at our other expense, so it has increased in both as a percentage term and in the absolute terms also. So could you please provide the breakout that which led to this -- increase in cost?

So if you look at this cost of the other cost, if you're -- I think you're comparing between the Q1 and the Q2, correct? .

Yes, yes.

Yes. Because if you compare from the last year, there is a reduction on this. But between Q1 and Q2, the increase because these are the sales-based events. So they generate revenue from a particular event, and they also look at other cost. So the full cost has taken as a cost and the revenue is taken as a revenue with the profit margin there. So this keeps moving quarter-to-quarter depending on the events, what they do on the ground.

[Operator Instructions]Your next question comes from the line of Vivek Ganguly with TCG Asset Management Company. .

Thank you. Thank you for the opportunity. pleasure in the . In the recent past, you all hired a senior executive for a head of revenue or head of business for your digit SBU. So we assume that you'll continue to invest in the digital initiatives and new digital assets. Can you give some commentary on that, how it is shaping up? And some metrics and at what point you all would be more comfortable giving out how the trends have been so that the investors can better appreciate the good work that you are doing there? .

Thank you. Thank you very much and very appropriate question you've asked. We have hired a team. They're working hard on it. Unfortunately, there has been an exit also on that because there was an expectation and the delivery dispatch over there. So right now, what is happening, the whole digital, genre, if you look at the advertising is pretty, I would say, unclear for everybody because at 1 side, there's an extra inventory coming from multiple sources. At the same time, certain brands like us are looking for a premium rather than a commodity advertising. So it's yet very early to say how it is shaping up -- but I can assure you, it is going in the right direction.

Right. And also, so advertisement is not the only source of your digital revenue. So your life subscription and you'll also have, I think, contracts with technology companies. So .

All 3 are there. But they all are, I would say, to be very honest, they are all in a nascent stage because advertising also on the app, you must have noticed, we have just recently started the advertising on our app from last, I think, 4 quarters now. So we are, again, checking that it should not happen that the experiment where I'm charging some money from a customer, if he's not happy about the advertising, I'm not showing him any of the ads over there. . So everything is evolving together because we are pretty clear that going forward, it cannot be only 1 vehicle of advertising which can give me the revenue going forward on digital. It has to be subscription, tie-up send and revenue all 3. So we are doing all 3 in such a manner that the consumer experience should not get impacted negatively because of any of the 3 activities.

So we absolutely appreciate the effort that have put in and the way you all have gone about in utilizing the entire digital business. But from an investor's perspective, we wanted to have some idea as to at what point would you be comfortable to give us the trends historical trends and the way for .

I will take your point to my board in the next Board meeting and let's see what Board decide because if you remember, a couple of quarters back, based on the board recommendation, we took the approval from the investor that we can avoid getting out because of the competitive scenario, details much more in details in the marketplace right now. So we'll come back to you after the Board discussion on this. .

Thank you. The next question comes from the line of Himanshu Padhya with Statford Investments.

I missed first 5, 7 minutes, but -- so if I -- if this question has been taken, then I'm sorry, but my view I wanted to know See, we are not raising prices, okay, on the readership, okay? And what we are seeing somehow the readership is not increasing, okay? And the advertisement is a function of my leadership, okay? Or how my leadership is moving -- how are you thinking about the longer-term strategy, let's say, from 4, 5 years perspective, that how will this whole business look like and because feeder ship does not come. One is obviously my circulation, which is a smaller part of revenue, which is not increasing, and we are saying that we don't want to raise the prices also. And then my advertisement, which is also a larger portion of the revenue, and that's a function of my leadership. And if I cannot show the growth, how will my numbers look like? Or how do you think 3 to 5 years down the line, the top line or, let's say, the organization will look like because costs will still steadily increase means we have reduced the cost, and we have done a very good job on that. But then how do I think about my fixed costs and my revenue line and some thoughts on that and your longer-term strategy from here on. That will be helpful, okay? .

So these 3 things. One is that if you noticed, post-COVID, we have gained the numbers which were lost in COVID. And unfortunately, we have not been able to grow from there, like whatever number we gained we are largely maintaining a few percentages here and there only. Nothing major growth happening. I totally agree with you. But at the same time, we understood that -- it may not be possible, though we are putting all the efforts to grow the circulation numbers, but can we increase our engagement with our readers and impact? Because we have got 38 lakh copies, and we have got crores and growth of reader, that also is a very, very large number. How do we deliver the response to the advertiser more impactful from that number. And that is the reason why, in spite of the circulation being flat, we've been able to continue showing the good single-digit growth on advertising. -- quarter-on-quarter, barring out this, which is a festive shift otherwise. So I guess what we have understood is the impact to the advertiser. And I think we've been able to deliver it pretty well -- having said that, it's not that we are going to just sit idle and let the circulation be there. We are putting all our efforts to increase the circulation, increase our market share also. So for example, in a particular market, if I'm not able to increase the circulation number, but over there, I have ensured that its competitor is declining much more. I'm at least maintaining the number. So my market share goes up. And hence, my revenue share and advertising also goes up in those markets. So I totally understand your apprehension. But I guess, this is the formula that we have understood right now. And let's see how it evolves in a couple of years. .

And 1 more question on this only. See, in some of the newspapers, okay, which are, let's say, language or, let's say, niche newspapers, okay? -- where they are the dominant players, okay? And we have seen the prices increase quite materially, okay, for them, okay? Or they are in, let's say, more than INR 10 something, it's INR 15 also. And not I'm talking about financial newspapers, but some regional language newspapers here and here, okay?

I totally understood. I know the names also. .

But -- and we have gained market share in certain markets, okay? But are we at a dominant stage that in some marketplace, we can have a pricing better pricing or increase in pricing and in certain markets where we are still not that place and hence, pricing will not like to touch in those markets? Or you are saying that when you're talking about pricing and you are saying that we don't want to raise prices. So it is for all across the market, that it would be only for a market where you are still, let's say, fighting the calendar of the difference between you and the first person or a second person is very low. So how are you thinking and your strategy on those aspects will be helpful?

See, largely, our concept is very clear. We don't want newspaper to become unaffordable for any households. Today, our average monthly average cost to a consumer is roughly around INR 150, INR 170 -- out of that also, he recovers -- or he or she recovers the some amount by selling the wastage of the newspapers at home. So the net cost come -- now we don't want to create a situation where this becomes much higher, and we will start rethinking. Please get try to understand. This is almost -- we are talking about a INR 1,200 net annual cost to a consumer. It's not a cheap bun. So we don't want to unnecessarily make it much more expensive. And also, if I increase the cover price in any of my market, the delta is not like I can't -- for example, today a priced at INR 5, will I make it INR 10? The answer is no. So even if I make it INR 6, the delta is not that large. And having said that, that lever is with us we can use it at any point of time. But as of today, we believe we should not. We should let consumers be happy with the pricing that the circulation, we continue like that.

And I know you guys spoke on this, but some sense on how the paid subscribers are moving, okay? -- let's say, not in terms of absolute number, but in terms of growth, what you are expiring and what you would have expired, let's say, 2 years back versus now, So what you seeing in Yes.

Yes. On last 2, 3 years, 2 years, actually, whatever experiment we have done in the market, some were very successful, some are not so successful. But overall, the results are in the right direction, positive direction. That's the reason why we continue to be committed in our digital business. We are spending money in the digital business. We are investing there. and making sure that at the right point of time, we get the right dividends out of that business.

Your next question comes from the line of Yash Ranga Swami with JP Associates.

My first question is with regards to copies. Now we've been at about 38 lakh copies, right? .