'Advertisers interested in Indian language newspapers in tier 2 & 3,' Girish Agarwaal

Advertisers are increasingly interested in Indian language newspapers published in tier 2 and 3 cities, according to Girish Agarwaal, DB Corp Ltd's Non-Executive Director. During the Q3 FY22 earnings conference call, he mentioned how both Indian consumers and marketers had made a strong comeback in the previous quarter.

According to Agarwaal, the festival season last year saw a significant uptick in demand, which was noticeable on the ground, particularly in tier cities. “Our advertising revenues are a testament to this fact. Our well-calibrated circulation strategy has enabled us to not only increase our circulation to bring it to the levels of immediate pre-COVID but have also been able to do so along with the cover price increase in select market which is being rolled out on a select city basis. We still see headroom for possibility of yield increase in our newspapers cover price and will continue to review and execute the same in the coming months and year. We are confident that our leadership position in the markets that we operate in will only enhance in the future.“

According to Agarwaal, the festival season has obviously been quite excellent in terms of advertising. He stated, “On the advertising front undoubtedly, the festival season has been very good. We are also beginning to witness newer sectors looking for geo-controlled ad campaigns and new age players looking to tap the non-metro markets all coming to us, given our wide reach and strong editorial integrity that resonate with our readers. This has helped us in delivering growth on these numbers. There is a paradigm shift happening in the way advertiser are looking at Indian language newspapers in tier 2 and 3 cities.“

He also discussed the company's financial performance and cost-cutting initiatives. "As you recall from our last conversation, we advised you that we will continue to focus on long-term cost optimization, and as a result, our margins will rise."

According to Agarwaal, DB Corp saved roughly Rs 195 crore in operational costs during the previous financial year, with around 40% to 50% of these reductions being sustainable.

He said, “During the last financial year, we have saved around Rs.195 Crores in these operating costs and we had indicated to you that around 40% to 50% of these savings are sustainable. We remain committed to this cost optimization and are happy to report that in the nine months ended December 31, 2021, we exceeded our targets of 50% of this achievement and we were able to take this saving up to almost 65%-70% of FY2021 cost saving. Resultantly, the print business EBITDA in Q3 of FY2022 came in at around Rs.1590 million with an EBITDA margin of 31%. Also, I want to announce that our current pledge of shares from the promoter side has now come down to around 4% with a loan outstanding of only Rs.25 Crores and we are working towards clearing the same in next few months’ time as we already communicated with you. “

The first two quarters of the fiscal year, according to Pawan Agarwal, Deputy Managing Director of DB Corp, were considered as a prelude to the economy's return to normality following a terrible FY2021.
According to him, the third quarter, which coincided with major Indian holidays, saw a robust comeback in activity, particularly in non-metro areas, tier 2 and tier 3 towns, as new and traditional marketers returned in force to access the pent-up demand everywhere.

Agarwal said, “Although the second wave made a significant impact on economic activity partly affecting the first half of the current financial year, it was short-lived and by the time the third quarter began it already began witnessing signs of significant uptick.”

Moving on to digital business, Agarwal stated that they have been adopting a strong and targeted investment plan over the previous several quarters, which has continued to demonstrate excellent growth on a long-term basis. “We focus on creating best-in-class ad-free user experience on our digital applications as well as websites while maintaining high quality insightful content. Our reader centric focus continues in the digital sphere as well and we have done this recognizing the importance of having a very strong presence in the digital space to ensure that our readers continue to engage with us across mediums and we are very happy to report that these efforts have yielded great results.”

Dainik Bhaskar app monthly users climbed from 2 million in January 2020 to roughly 14 million in November 2021 in a short period of time, according to Agarwal. He went on to say, “What is significant in these results is that we have been consistently demonstrating remarkable growth in our active user base. We also crossed the important milestone of achieving a million mark in daily average e-newspaper downloads. Of this, over 850000 downloads are for Dainik Bhaskar Hindi and 150,000 for Divya Bhaskar Gujarati making the Dainik Bhaskar group a dominant number one Hindi and Gujarati news app player while continuing to be on course to further increasing the user base and extending the lead.” 

In terms of the radio division, Agarwal stated that its market share from MY FM grew in the first nine months of FY2022. For the quarter, volume growth accelerated in industries such as lifestyle, real estate, banking, state government, and FMCG. On a year-over-year basis, revenue from the radio segment increased by 29% in Q3 FY2022 to Rs.376 million.