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 remained broadly stable, supported by our strong readers' relationships, trusted brands, and continued relevance among advertisers. Looking ahead, we remain positive about the opportunities in the second half of the year, with the festive season expected to support advertising activity across our key markets. We will continue to strengthen our advertisers' partnerships, enhance reader engagement, and build on our competitive advantage across print, 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 value for all our stakeholders. With this, we can now open the floor for the questions -and -answer session. Thank you.
Thank you very much.
Thank you.
We will now begin with the question -and -answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and one. Your first question comes from the line of Abhinav Mandowara with Aequitas Investments . Please go ahead.
Hi, good evening.
Good evening.
My first question was regarding the seasonality. As you mentioned that Navratri was there in Q2 last year, and this time we are seeing 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?
On the advertising front, as we mentioned to you, because of the eight days of shift of the season from September to October, we believe there is an impact of almost around INR 40 crore. Now, with that shifting into Q3 and the overall momentum, what we believe is there, though in certain parts of India is not playing well because in Rajasthan even there's the rains happening even today. So I don't know how the overall Q3 or next six months is 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 two quarters also.
Right. I guess in one of our interviews, you had mentioned that we are confident of reaching high single digits to early double digits revenue for the full year for advertisement. Do you think considering the festive demand, we will be able to reach somewhere there?
That is what our endeavor is. Looking at what we have seen last seven, eight days of festival, overall momentum is good. Let us hope this continues.
What would have led to the circulation decline, however, since you have 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 few percentage here and there is the one which is bothering us. But we are working all efforts on that, especially what we are doing in our non-core markets. And that is 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 numbers.
Got it. Are we taking any further price hikes?
No. We have taken this call, if you remember, a year back or so, that overall, let's face it, there's a challenge on the number of copies. Furthermore, if we increase the cover price, that will further escalate the decline. We don't want to do that.
Got it. In terms of print and the newspaper cost, we have a mix of imported as well as domestic. I assume that we would be also bearing the incremental freight cost. Going further, how did your guidance on the newspaper cost per ton, and what kind of inventories do we hold for the same?
See, if you look at the last year to this year in terms of per ton cost, there's an increase of 20%.
Right.
What we were paying INR 47,000 per ton average cost, we are paying right now almost INR 57,000. They are almost 20.8%, to be more precise, 21% is the impact on the newsprint cost. That is all because of the geopolitical situation. Because the imported prices are up, domestic prices also follow the same route. Also, the freight is on a higher side. We believe that in next Q3 and Q4, these prices should go down by maybe 2% or 3%, but not more than that as what we hear from our suppliers. I think that is one pain area which the industry is going through right now.
Are we facing any issues in shipments or availability of imported paper or anything on those fronts?
See, this becomes the rate. When somebody says I have this much quantity to offer and the market is tight, you lose the leeway on the pricing if you want to secure the supply. That is a problem.
Inventory, how much do we keep?
Inventory, generally speaking, we keep few months for the Indian, because Indian transportation takes 10-15 days maximum. And imported, around a quarter.
Quarter. Got it. So ideally now, since I think major price hike happened in Q1, Q2, the further inventory which will come in, say in Q3, will be of a higher price versus Q2?
No. As I mentioned to you, compared to Q2, the prices may soften down by 2%.
Okay.
But if we compare to last year of Q3 and this year Q3, there's an impact of almost 18%-20%.
Right. Sure. Got it.
Next is regarding the segmental split. How have all the segments done in Q2 and going forward, where do you see the demand traction from?
I can give you the breakup, but those breakup will not be useful. Why? Because the festival season, eight days of Navratri is in Q3 this year. So the number looks not apple-to-apple comparison. Also furthermore, just to add on, we also lost on some of the government advertising because there were some Panchayat election happening in couple of states because of the code of conduct. So that advertising also went down.
Okay. 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 festival season going this way. Most of them are on the almost flat or single digit.
Okay. I will join back this end.
Thank you.
Thank you. The next question comes from the line of Lohit Saini with Jay Ram Stock Brokers . Please go ahead.
Hello. Thank you for the opportunity. Recently, the company has increased its app subscription price from INR 149 to INR 199. What is the current revenue contribution from paid subscriptions in Q2, and how has the price hike impacted our subscriber growth and retention? One more question regarding the upcoming U.P. elections. How is the company positioning its digital business to capture the ad opportunities there?
Let me answer one by one. First of all, the price hike, which we have taken from INR 149 to INR 199. This is all the experimenter basis. It is not a flat. Some places we have even tried lightly lesser even monthly price and all that. As we mentioned to you, we are doing multiple experiments in digital. The advantage is that I can do an experiment on a cohorts of almost 100,000 subscriber also. That is the experiment we are doing, and happy to inform you that the results are pretty decent and good. This experiment will continue. So taking the second question of your that what will be the impact on the revenue, it is too early to say because this is all just the experiment phase right now.
In couple of quarter, this will get settled, and then we will get the real number out of it.
Coming to the third questions of yours, which is about U.P. election. As we mentioned to you in couple of calls earlier also, the election advertising is uncertain. Though we are working hard for it in terms of readers' engagement in U.P., today we have got huge connect with the readers in U.P. We have got very sizable downloads of our monthly active users as well as DAU. Also, we have got a huge network of our journalists in U.P. I can proudly boast that today, compared to any news organization, our ground coverage on U.P. would be far, far, far higher. We are very hopeful that during the election time, our subscriber base in U.P. will certainly go up.
Okay. Are you seeing any recovery in FMCG ad spends?
If I look at this quarter, FMCG right now is at -2%. As I mentioned, this quarter would be wrong way to comparison. I would say almost single-digit growth, even considering the festival in this quarter.
Okay. Thank you.
Thank you, sir.
Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. The next question comes from the line of Bhavi Chauhan with Care PMS. Please go ahead.
Good evening. My question is related to digital apps. Our MAU have declined from 20 million in Q4 to 18 million in Q2 currently. There is a consistent decline from past two quarters. Any key reason for this, and how management is looking forward to increase our MAU growth?
Two things, just to let you know 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. 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. There is some impact of here and there of that. But as you will appreciate between 18, 19 and 20, the difference on if I look at the quarter-on-quarter is around 3%-4%.
Okay. Another question that our other expense have been increased, like in both on absolute term and in a percentage of revenue. Could you please define that which cost are driving this? Is it majorly the paid cost which company is bearing right now?
Sorry, I am not able to hear this question of yours. Can you go again, please?
If I look at our other expense, it has increased in both as a percentage term and in the absolute terms also. Could you please provide the breakup that which led to this increase in cost?
If you look at this cost of the other cost, I think you are comparing between the Q1 and the Q2, correct?
Yes.
Yes. Because if you compare from the last year, there is a reduction on this. But between Q1 and Q2, there is an increase because these are the sales-based events. They generate revenue from a particular event, and they also book it as a cost. The cost is taken as a cost, and the revenue is taken as a revenue with the profit margin there. This keeps moving quarter to quarter, depending on the events, what they do on the ground.
Oh, okay. That is it from my side. Thank you.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, we request you all to limit to two questions each and rejoin the queue for any further questions. The next question comes from the line of Vivek Ganguly with TCG Asset Management Company. Please go ahead.
Thank you. Thank you for the opportunity.
Pleasure.
In the recent past, you all hired a senior executive for the head of revenue or head of business for your digital SBU. We assume that you all continue to invest in the digital initiatives and your digital assets.
Correct.
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 all are doing there?
Thank you very much and very appropriate question you have asked. We have hired a team. They are working hard on it. Unfortunately, there has been exit also on that because there was an expectation and delivery mismatch over there. 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 one side, there is extra inventory coming from multiple sources. At the same time, certain brands like us are looking for a premium rather than a commodity advertising. It is yet pretty early to say how it is shaping up, but I can assure you it is going in the right direction.
Right. Also, advertisement is not the only source of your digital revenue. You all have subscription and you all also have, I think, contracts with technology companies.
Correct. All three 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, four quarters now.
Right.
We are again checking that it should not happen that the experiment where I am charging some money from a customer, if he is not happy about the advertising, I am not showing him any of the ads over there. Everything is evolving together because we are pretty clear that going forward, it cannot be only one vehicle of advertising which can give me the revenue going forward on digital. It has to be subscription, tie-ups, and the ad revenue, all three.
Right.
We are doing all three in such a manner that the consumer experience should not get impacted negatively because of any of the three activity.
No. We absolutely appreciate the effort that you all have put in and the way you all have gone about institutionalizing the entire digital business. But from an investor's perspective, we wanted to have some idea as to at what point would you all be comfortable to give us the trends, the historical trends and the way forward.
I will take your point to my board in the next board meeting, and let's see what board decides, 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 giving out because of the competitive scenario, much more in details in the marketplace right now. So we'll come back to you after the board discussion on this.
Thank you.
Thank you. The next question comes from the line of Himanshu Upadhyay with SteadFort Investments. Please go ahead.
Yeah. Hi, good afternoon.
Good afternoon.
I missed first five, seven minutes. If this question has been taken, then I am sorry. My view-
Not to worry at all.
I wanted to know, see, we are not raising prices on the readership. What we are seeing, somehow the readership is not increasing. The advertisement is a function of my readership or how my readership is moving. How are you thinking about the longer term strategy, let's say from four, five years perspective, that
How will this whole business look like? Because if readership 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. My advertisement, which is also a larger portion of the revenue, that's a function of my readership. If I cannot show the growth, how will my numbers look like? How do you think three to five years down the line, the top line, or let's say, the organization will look like? Because costs will slowly, steadily increase. We have reduced the cost and we've done a very good job on that. 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.
Sure. So three things. One is that if you notice, post-COVID, we have gained the numbers which was lost in COVID. Unfortunately, we have not been able to grow from there. Whatever number we gained, we are largely maintaining few percentages here and there only. Nothing major growth happening, I totally agree with you. At the same time, we understood that it may not be possible, though we are putting all the efforts to grow the circulation number. Can we increase our engagement with our readers and impact? Because today, we have got 38 lakh copies, and we have got crores and crores of readers. That also is a very large number. How do we deliver the response to the advertiser more impactful from that number?
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. 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're putting all our efforts to increase the circulation, increase our market share also. For example, in a particular market, if I'm not able to increase the circulation number, but over there, I've ensured that if 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.
I totally understand your apprehension, but I guess this is the formula what we have understood right now, and let's see how it evolves in a couple of years.
One more question on this only. See, in some of the newspapers, which are, let's say, language or let's say a niche newspapers, where they are the dominant players. And we have seen the prices increase quite materially for them. Or they are in, let's say, more than INR 10, something. It is INR 15 also. I am not talking about financial newspapers, but some regional language newspapers here and there.
I have totally understood. I know the names also.
We have gained market share in certain markets. But are we at a dominant stage that in some marketplace we can have a better pricing or increase in pricing, and in certain markets where we are still not that place and hence, pricing we will not like to touch in those markets? Or you are saying that when you are talking about pricing and you are saying that we don't want to raise prices, so it is for all across the markets or that would be only for a market where you are still, let's say, fighting the challenger or the difference between you and the first person or the second person is very low. So how are you thinking and your strategy on those aspects will be helpful.
Yeah. See, largely our concept is very clear. We don't want newspaper to become unaffordable for any household. Today, our monthly average cost to a consumer is roughly around INR 150 - INR 170. Out of that also, he recovers or he/she recovers the some amount by selling the wastage of the newspapers at home. So the net cost comes to say, [INR 100] . Now, we don't want to create a situation where this becomes much higher and people start rethinking. Please try to understand, this is almost, we are talking about a INR 1,200 net annual cost to a consumer. It is not a cheap one. So we don't want to unnecessarily make it much more expensive. Also if I increase the cover price in any of my market, the delta is not.
For example, today I am priced at INR 5, will I make it INR 10? Answer is no.
Even if I make it INR 6, the delta is not that large. Having said that lever is with us. We can use it any point of time. As of today, we believe we should not. We should let consumer be happy with the pricing, let the circulation be continued like that.
See, I know you have spoken on this, but some sense on how the paid subscribers are moving. Let's not in terms of absolute number, but in terms of growth, what you are aspiring and what you would have aspired, let's say two years back versus now. What are we seeing in-
In last-
Yeah.
Yeah. On last two, three years, two years actually, whatever experiment we have done in the market, some were very successful, some were not so successful. 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.
Okay. Thanks from my side.
Thank you, sir.
Thank you. The next question comes from the line of Yash Rangaswamy with JP Associates. Please go ahead.
Hi, good evening.
Good evening.
My first question is with regards to the copies. We have been at about 38 lakh copies, right?
Correct.
But versus our previous quarter, the revenue has gone down. It is at INR 116, and in last quarter, it was reported at INR 120.
Around 30,000 copies lost.
Copies are almost the same. So 30,000, okay.
Yeah.
It's 37 point-
Yeah. As I mentioned to you, 38. So it's actually 37.68.
Okay. And versus that was around 38, more or less.
Correct.
Okay. So that has caused the revenue to go down.
Yeah.
What about the advertising pricing? Are we seeing any improvement in that? Or what are we doing on that? I know the quarter is not comparable, but then have we taken some stand on what happened during the quarter on the pricing front? Because there will be a point when we will have to, not just focus on volume, but also gather pricing as well in place.
Correct. What we are doing on the pricing side, we are able to increase the ticket size, which means the advertiser who was advertising on inside page, we have been able to upgrade them, take some extra money from them, and bringing them onto the premium pages of back page, third page, and the front page also. So that is the way we have been able to increase the unit price with the advertisers. Even on the front page jackets, we have been able to take some margin extra over there. But overall, the focus is both ways, that we get more volume, and wherever possible, we will be able to increase the unit price also.
But how are we getting those advertisers to spend on premium pages? Are we giving discounts compared to what the market price would be?
We are upgrading them. For example, if somebody is paying me INR 100 for inside page,
Right
we're saying, "Why don't you pay INR 40 and come on the front page?" So they get more exposure, we get more value out of that.
Okay. But then that INR 40 or INR 140 in your example would have some sort of discount, right?
No, that's the prevailing price of that particular page.
Okay. All right. I just missed one point. I know you've covered this, but I couldn't gather the entire point that was discussed. The other expenses, which seem to be on a lower side for print business by around 10%. You said that is on account of events?
No. The other costs decreased over last year, but it has increased from quarter one to this year because these are the costs on the sales-based event. For example, if sales is doing a particular conclave, that the cost of the conclave, which goes under cost and the revenue comes in, sit in the revenue side with the profit.
That's a part of the publishing segment, right?
Yeah.
Okay. That would be the only thing that would be mainly attributable to the lowering of costs.
Correct. Otherwise, if you look at my personal cost, look at my other cost, we are very much under control. In fact, we have taken a cut on most of the cost elements.
Okay.
Only one thing which is not in our control is the newsprint prices, which has taken a steep of almost 20.8% hike over last year's quarter. That's a painful thing.
Okay. What about our major industries or verticals? You mentioned that even though it's not comparable, you said the real estate has grown by single digit. That is in spite of the festive or was it excluding the festive impact?
No, this is in spite of the festive shifting. If I assume the festive was in this quarter itself, this could have been a double-digit growth.
Right.
Like jewelry is very good. FMCG is down. Lifestyle is down. Hypermarkets is almost down because the festival season yet to come for them. I think it's a mixed bucket.
But apart from real estate, which other sectors have done well in spite of the festive being different?
Jewelry has done well in spite of the festive shift because they start early. The banking and financial service have done. In fact, IPO business has done a fantastic job compared to last.
Has it done double digit?
Yeah, very much double digit. 50%, to be very honest.
Oh, okay. 50%. Okay.
50%. But let's not get carried away by that because the volume is not much.
Yeah. It was the IPOs that drove it. That must have driven it.
Correct. Healthcare is doing very good. Again, a strong double digit. What else? Automobile is flat. Education is single digit. Because last year, if you remember, because of the NEET issue and all that, the advertising came to second quarter.
Okay.
For that.
All right. That's about it. Thank you. Thank you so much.
Thank you. The next question comes from the line of Vikram Hirawat with Hirawat Holdings and Investments. Please go ahead.
Good evening. Am I audible?
Yes, very much, sir.
Yeah. Hi. I am trying to understand the industry structure, and I would love your perspective on it. Although the results over the midterms seem to be stable, I am worried about the long-term problem of the print media industry. I am trying to compare it with Western publishers, and they have had a major decline in the long run. What makes the Indian market different, and will the next generation continue to read the newspaper? Do you have any sort of demographic breakup if the next generation is reading newspapers, and how will the structure evolve over the next 10-15 years?
I appreciate all your questions, and I would request you, sir, to have a meeting with us, our investor relationship team, one-on-one, because this is a much loaded and larger discussion. I would encourage you to get in touch with us and we can have a one-on-one meeting with you to explain you much more in detail, which we keep doing with other investors on a timely basis.
Okay. Thank you.
Thank you.
Thank you. Your next question comes from the line of Alok with SW. Please go ahead.
Am I audible?
Yes, sir.
Okay, sir. My question was regarding the Q2 result only. Actually, the first caller also asked a similar question, but I have the same question. Like in Q2 now, the main reason with these results, the dip is due to the festive season getting postponed or half completed. That was one of my main question. Also along with that, in other income also we have some INR 11 crore or something as part of this one. So I wanted to get a clarification on that part.
Let me explain you the other income which has come. This income has come because as you know, our registered office, which is in Ahmedabad, was on a long-term lease basis where we have paid the security deposit at the time of commencement of the lease. The same has been recognized as at present value. So lease agreement of Ahmedabad has been terminated because the builder from whom we had taken the premise, they are going for redevelopment. So we have derecognized the ROU assets and lease liability, booked the gain of around INR 13.39 crore under the head of other income as per the Ind AS 116/109 regulation.
Got it. Sir, and regarding this festive impact, is it only going to be the short term or how about that?
Sir, there's just a shift of around INR 40 crore in the quarter three. Now the most important thing, what we are focusing and I'm sure looking at the overall economy, that the festival season should do good for everybody so that we are able to continue the momentum.
Okay, sir. Sir, one more question. Can I go ahead with that or should I come back in the queue?
Totally your call, sir.
Sir, only one question was that will cash actually reach the shareholders going forward? Because now I also heard in last few quarters you are increasing the CapEx and digital spend also. So keeping that in mind, for a long-term shareholder, how will this have an impact? Mainly on three things I wanted to ask. One is the CapEx cash flow. Please go ahead, sir.
CapEx cash flow, as I mentioned to you on the call in few quarters also, that we do not have any large CapEx planned because all the machines, production equipment and all are all in place. We do not foresee any major CapEx coming in couple of quarters or maybe four, five quarters ahead. As on today, company has a total cash and bank balance of around INR 1,120 crores. As you know, the company have already paid INR 5 per share as the first interim dividend in the Q1. The board will decide that how we want to further distribute the cash lying in the company to our stakeholders and shareholders.
Okay, sir. Based on the meeting only, then you will be deciding on the dividend part. Okay.
Correct, sir.
Any update on the digital front, sir? From last two to three years, we had even one strategic advisor from U.S. that came in.
Correct.
A few developments were happening.
Happy to inform you, we are on the right track. We are doing multiple experiment on the subscription also. Overall things are in a good shape, I would say.
Got it, sir. Sir, just for the previous caller, you told we can get in contact with the investor relation. Is it through email or through direct call if you want to have some detailed conversation, how to get in touch with?
Tell it to us and we can fix up a time with you. Our team will certainly reach out to you on that.
Okay. Through the investor relations email only I need to set up this way?
Yes, sir.
Okay, sir. Got it, sir. That's all. I have one strategic input also, like how to increase the revenue through the ads only. Also you were already saying to another caller, even though we have the same viewership or readership, but you are trying to improve the connection with viewers. I think I have one really good plan. Maybe we pause this call or anytime once you're free, I want to connect with you and share it with you directly, sir, if possible.
It'll be a pleasure to discuss with you on this idea. Lalit Jain, you can reach out to this person and we can fix up a call with them.
Yeah. My name is Alok. I will be really looking forward, sir.
Thank you. Thank you, Alok ji. Thank you.
Thank you, sir.
Thank you. Ladies and gentlemen, we take that as our last question for today. I now hand the conference over to the management for closing comments.
Thank you everyone for your participation today and time on this earnings call. I hope we've responded to your query, and we'll always be of assistance to you through our investor relation department headed by Mr. Prasoon Kumar Pandey and our CFO, Lalit Jain, for all your further queries. Thank you and have a great evening. Further wishing you and your family a very happy and prosperous Diwali in advance. Thank you.
Thank you everybody. Wishing you a very happy Diwali in advance. Thank you.
Thank you. Ladies and gentlemen, on behalf of D. B. Corp Limited, that concludes this conference. Thank you everyone for joining us and you may now disconnect your lines.