Advertisers renewing approach towards newspapers in tier II, III cities: Girish Agarwaal
Agarwaal, Non-Executive Director, DB Corp, said during the Q3 earnings call that while newer sectors were looking for geo-controlled ad campaigns, new-age players were focusing on non-metro markets
Advertisers are now showing a keen interest in Indian language newspapers based out of tier 2 and 3 cities, said Girish Agarwaal, Non-Executive Director, DB Corp Ltd. He was speaking during the Q3 FY22 earnings conference call about how the past quarter had seen a strong return of both the Indian consumers and advertisers.
According to Agarwaal, last year’s festival season saw a remarkable resurgence of demand, and this was visible on the ground, especially 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 markets which is being rolled out on a select city basis. We still see headroom for the 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.”
While speaking to analysts recently, Agarwaal shared that the festival season undoubtedly has been very good on the advertising front. He said, “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 advertisers are looking at Indian language newspapers in tier 2 and 3 cities.”
He also spoke about the company’s financial performance and cost optimization. “If you recollect during our last interaction, we appraised you that we continue to focus on sustainable cost optimization and therefore we will see resultant improvement in our margins.”
According to Agarwaal, during the last financial year, DB Corp saved around Rs 195 crore in operating costs and had indicated that around 40 per cent to 50 per cent 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, important 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 crore and we are working towards clearing the same in the next few months’ time as we already communicated with you.”
Pawan Agarwal, Deputy Managing Director, DB Corp said that the first two quarters of the fiscal year were seen as a precursor to the economy's journey to normalcy after a difficult FY2021.
“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,” said Agarwal.
According to him, the third quarter which had significant Indian festivals saw a strong rebound of activities especially in the non-metro cities, tier 2, tier 3 towns and this was witnessed by the return of new and traditional advertisers in a very big way as they looked to tap the pent-up demand everywhere.
Moving to digital business, Agarwal mentioned that over the past few quarters they had commenced implementing a strong and focused strategy of investment which continues to show strong growth on a sustainable 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.”
In a short span of time, Dainik Bhaskar app monthly users have increased to around 14 million in November 2021 when compared to just 2 million in January 2020, “ said Agarwal. He further added, “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.”
The efforts of the company's digital team are overseen by an advisory board that has recently taken onboard Mark Thompson, ex-CEO of the New York Times who has spearheaded New York Times digital transformation over the last decade. Apart from this, they have also focused on onboarding experienced talent from the industry and their strong technology team has a consumer product and tech background and has been drawn from India's best consumer tech companies. He is positive that the team will continue to expand Dainik Bhaskar’s digital journey this year as well.
Speaking about the radio division, Agarwal said that in the nine months of FY2022 its market share from MY FM has increased. Volume growth gained momentum across sectors such as lifestyle, real estate, banking, state government and FMCG for the quarter. For the Q3 FY2022 the revenue from the radio division came in at Rs.376 million higher by 29% on a Y-o-Y basis.
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