Captains Speak

Published: Dec 29, 2021
Updated: Dec 29, 2021

Rs 125-cr cost savings due to Covid in H1FY21 - DB Corp

“DB Corp haS, thanks to Covid-19, targeted Rs 125 crore of cost savings for fiscal 2021. This was achieved in H1FY21 itself and we are looking at further cost savings in the second half. About 60-70% of the cost savings will be permanent in nature and will benefit the company in FY22 also,” maintains Pawan Agarwal, Deputy Managing Director.

He adds, “On digital, the company is building a loyal user base currently. Monthly users on the digital platform/ app increased four times in the last six months. The digital segment is growing at a higher rate than the industry average and the time spent on the app by users has increased. The company was helped by the softness in newsprint prices, which was about Rs 35,500/ tonne in Q2FY21. We expect the priceS to go down by 1- 2% in Q3FY21.”

According to him, the number of pages per copy in September was 18 and currently it is 19. They are planning to increase it to 21 pages, i.e., equivalent to the average pages per copy in Q3FY20. Cover prices were increased by 5-12% in markets like MP, Jharkhand, Punjab and Rajasthan, which resulted in better realization at Rs 2.72 per copy. The company expects an incremental 2% growth each month in circulation and is expected to reach normal levels in three to four months. The average number of copies sold during the quarter was 42.68 lakh. Radio in metro markets recovered up to 60-65% and has done better in the festival season. The management expects both print and radio to complete full recovery in six months.

Reviewing the performance of the company during the first half of fiscal 2021, Mr Agarwal points out that the gradual unlocking of the economy led to a much improved Q2FY21 performance. All the markets that the Dainik Bhaskar group operates in, primarily tier-II and tier-III cities, have been returning to normalcy at a rate that is outpacing the metros. The H1FY21 performance of the company is reflective of the disruption in the first quarter due to the Covid pandemic. However, beginning mid-July, there was phenomenal traction on a sequential basis on almost all parameters, i.e., operations, advertising revenues and circulation. With Navratri coming in late by a month this year, the advertising revenues from this season shifted from the last week of September to October. Adjusted for this, the company is happy to report that its performance is now approaching near preCovid levels. The profitability has been witnessing improvement on the back of its relentless cost optimization measures and soft newsprint prices. The management is hopeful of recovering a large part of the performance that was lost to the pandemic.

CIRCULATION UP

The company is witnessing consistent circulation growth. Circulation copies increased to 78% of the pre-Covid levels yoy in July, 80% in August, 81% by the end of September and is currently at an impressive 86% overall as compared with 66% in April. As the unlock measures began to unfold, the company’s advertising revenues too are reclaiming pre-Covid levels yoy with almost 77% in September (on a like-to-like basis adjusting for slippage of the Navratri festival to October), from 71% in August 2020 and 19% in April 2020. Typically, about 65% of advertisement revenue is from retail and the balance 35% from national advertisers/corporates. While retail is back to 70-72%, national advertisers are still at 50% of pre-Covid levels

Pointing out that “the company has seen good ad traction from the education, auto, real estate, pharma and jewellery sectors,” Mr Agarwal adds, “FMCG sector ad spend was also increased for announcement of price benefit schemes. Ad revenue from new customers is marginal at 1- 2%. In terms of verticals, automobile saw growth in September and education, due to delays in results, showed growth in September which is continuing in October as well. Big clients are back and have started advertising, but smaller clients are holding back as they face cash flow issues. Dainik Bhaskar was perhaps the only newspaper in the country that published mega editions in its major markets like Shimla (144 pages), Bikaner (130), Indore (128), Ahmedabad (80), Raipur (80), Bhopal (72), Ujjain (60) and Hoshangabad (60). This has helped advertisers signal their return to the market, and more importantly their efforts to tap into the pent-up demand in the festive season.”

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Industry Review

VOL XVI - 10
February 01-15, 2025

Formerly Fortune India Managing Editor Deven Malkan Assistant Editor A.K. Batha President Bhupendra Shah Circulation Executive Warren Sequeira Art Director Prakash S. Acharekar Graphic Designer Madhukar Thakur Investment Analysis CI Research Bureau Anvicon Research DD Research Bureau Manager (Special Projects) Bhagwan Bhosale Editorial Associates New Delhi Ranjana Arora Bureau Chief Kolkata Anirbahn Chawdhory Gujarat Pranav Brahmbhatt Bureau Cheif Mobile: 098251-49108 Bangalore Jaya Padmanabhan Bureau Chief Chennai S Gururajan Bureau Chief (Tamil Nadu) Ludhiana Ajitkumar Vijh Bhubaneshwar Braja Bandhu Behera

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