Mumbai: Advertising revenue rose for two newspaper publishers that reported their September-quarter earnings on Thursday, but the profit growth numbers of the two companies were different. While DB Corp. Ltd reported a decline in profit from a year earlier, Hindustan Media Ventures Ltd (HMVL) doubled its earnings.
DB Corp., the publisher of Dainik Bhaskar, said second-quarter net profit, including that at its units, fell 37% to Rs 40.2 crore from a year earlier as costs related to introducing new editions rose.
Total revenue rose 18% in the quarter ended 30 September to Rs 353 crore, while advertising revenue increased 16% to Rs 273.5 crore, a company statement said. General administration expenses and selling and distribution expenses rose more than 30%.
File photo of people reading the hindi daily Hindustan from HMVL.
DB Corp attributed the drop in profit to a one-time expense of Rs 3.73 crore on the introduction of the Dainik Bhaskar edition in Maharashtra, operating losses on three editions in Maharashtra and Jharkhand as well as a foreign exchange loss.
HMVL, which publishes the Hindustan daily, more than doubled profit to Rs 22.2 crore from a year earlier. The company is a subsidiary of HT Media Ltd, publisher of the Hindustan Times and Mint.
Revenue gained 23% to Rs 154.2 crore. Sales were boosted by a 24% increase in advertising revenue to Rs 113.3 crore, the result of both a volume and pricing increase, a company statement said.
Increase in advertising revenue and rise in interest income outpaced rising newsprint prices and higher circulation costs, it said.
Shobhana Bhartia, chairperson of HMVL, said sales were driven by a 24% growth in advertising revenue and an expanding readership base.
“Our efforts to strengthen our presence in existing markets and enter new ones have resulted in Hindustan remaining the country’s fastest growing daily. It also is the second largest read newspaper in the country in terms of total readership,” she said in a statement.
Bhartia said Hindustan was a strong brand with a growing presence across Hindi-speaking regions and had a strong balance sheet. “I believe that all these ingredients will help us deliver shareholder value.”
Shares of HMVL lost 0.5% to close at Rs 131 on Thursday on the Bombay Stock Exchange, outperforming the benchmark Sensex, which lost 0.9%. DB Corp. shares rose 2.3% to end trading at Rs 230.15.
Sudhir Agarwal, managing director at DB Corp, said that in an overall challenging business environment the company was strongly focused on operational efficiencies.
“Our expansion in mature markets has continued on course. Our performance in newly launched markets of Maharashtra, especially Aurangabad, was encouraging as, within a short span of five months, we were declared the No. 1 newspaper by research firm IMRB,” Agarwal said. “Over the last four months, we have also launched editions in Nashik, Jalgaon, Ahmednagar, which are ramping up steadily.”
Agarwal said he continues to remain optimistic, in spite of short-term hurdles, as the Indian media industry is on a consumption-driven growth trajectory.
“The growth acceleration in regional print media will be driven by tier one and tier two cities,” Agarwal said.
An analyst, who did not want to be identified citing company policy, said higher circulation and better realizations had helped HMVL’s subscription revenue rise 15.6% from a year earlier and 3% from the preceding quarter to Rs 33.3 crore.
“Raw material cost has increased by 13% year-on-year due to high newsprint costs but HMVL has managed its expenditure well,” he said.
On DB Corp, the analyst said that it was obvious that margins were under stress.
“In new editions, revenue grew by 38% quarter-on-quarter but costs grew by as much as 50% because of launch of two Maharashtra editions in the second quarter,” he said.
Ankit Kedia, an analyst at Centrum Broking said that DB Corp’s results were below expectations.
“Profitability is down for the group, because of an increase in costs as also forex losses. However, for HMVL, the advertisement revenue growth at 24% was encouraging and in line with our prediction of 20% and above ad revenue growth.”