Newspapers are rising in India on back of strong Advt show: DB Corp’s Satyajit Sengupta

Contrary to performance in the global markets, print media, especially newspapers, in India are still going strong. The COVID-19 disruption notwithstanding, it didn’t take print publications long to put up a resurgent show. The last couple of fiscal years have seen print publications report profits or narrow their losses. The first quarter ended June 30, 2023 of FY2024 has seen most print publications show positive growth.

DB Corp, home to flagship newspapers – Dainik Bhaskar, Divya Bhaskar, Divya Marathi and Saurashtra Samachar – reported a strong 154% YOY growth in its Q1 FY24 consolidated PAT to Rs 788 million from Rs 310 million in the corresponding period of the previous fiscal.

Print and other business advertising of DB Corp registered another quarter of strong growth of around 18% YOY to Rs 3,584 million from Rs 3,051 million and EBIDTA grew 93% YOY strong in Q1 FY2024. Consolidated EBIDTA registered strong growth of 84% YOY in Q1 FY2024 to Rs 1,359 million from Rs 738 million on account of impressive revenue growth as well as continued cost control, including softening newsprint prices. EBIDTA margin expended by 900 basis points to 24%.

In an earnings release, commenting on the performance for Q1 FY2024, Sudhir Agarwal, Managing Director, DB Corp Ltd, had said, “As global economies are making a slow recovery from their inflationary pressures, the Indian Economy, especially the non-metro markets continue to see rapid growth. The print sector has been on the uptrend for the past few months and this is likely to continue. Reputed agencies such as CRISIL peg this growth at about 15-17% on the back of strong advertising revenues, driven by Elections, Government Spending, Consumer Demand across traditional and digital sectors. While English language print has been struggling with sluggish demand, Regional newspapers seem to be faring better.”

In an email interaction with Adgully, Satyajit Sengupta, Chief Corporate Sales & Marketing Officer, DB Corp, decodes the strong growth show by the print media sector in India, as well as the resurgent newspapers. He also highlights the key factors behind Dainik Bhaskar Group’s success, the positive impact of the sharp drop in newsprint prices, what keeps advertisers excited about newspapers, and much more.

Q1 FY 2024 results for most print publications have shown positive growth. How do you view the overall positive sentiments in the print media industry?

Newspapers are rising. Our excellent results for the last few Financial Years as well as in Q1 FY24 have been testimony to the same. Our markets are buzzing with activity. Clients are performing very well across categories. We are also doing many initiatives that have really helped drive ROI for clients. All segments are growing. We see a lot of traction in Education, Real Estate, Jewellery, 4 Wheelers, Banking & Financial, and Government.

How do you view Dainik Bhaskar’s performance in the first quarter of FY2024 and how does it compare to the results shown in the last fiscal? According to you, what are the factors contributing to this growth?

A huge reason behind Dainik Bhaskar Group’s success is that we believe in the strength of our medium and are constantly innovating to offer better solutions to both our readers and advertisers.

Our editorial is delivering a vastly superior product, which is well acknowledged by readers. In almost all markets that we cater to, Dainik Bhaskar is now a dominant force, which commands and brings larger market share and revenue. 

We are also focusing on increasing our circulation in our key markets to take us to a dominant position. This is translating to enhanced response from advertisers.

There is a downward trend seen in newsprint costs. What is the current level of newsprint cost and what was the peak cost seen? How do you see this fall in costs reflecting in the revenue of the overall print media industry? How much does Dainik Bhaskar stand to gain from the fall in newsprint costs?

Newsprint prices have seen a sharp drop from around $950 per metric ton to now around $530-540 per metric ton, that is, around 45% correction in prices. It is expected to further soften to new lower levels. Newsprint construes around 45% of overall operating cost and hence, reduction in newsprint prices is directly benefiting operating profit. Our Qtr 1 FY24 net profit jumped by 154% YOY to Rs 79 crore from Rs 31 crore last year.

Dainik Bhaskar has also reported robust growth in its advertising revenues. How has this growth come about and how does it compare to FY2023? According to you, what are the key ROIs that Dainik Bhaskar offers its advertisers?

We have focused on developing initiatives that deliver results for advertisers in terms of Impact, Engagement and Sales. It's not one or two ideas, but several innovative initiatives that are driving our growth. Apart from advertising volumes, activities that provide reader engagement, ground connect, and create communities have become a regular part of the calendar. We have an initiative for every category.  

What kind of further revival are you expecting to see in overall print sector’s advertising revenues by the end of this fiscal year?

The second half of the year is projected to do better than the first half. There are several newsworthy events coming up. The Asia Cup has started; we have the ODI World Cup. Our large states Madhya Pradesh, Rajasthan and Chhattisgarh also have elections this year. Therefore, there would be a lot of reader engagement, which would translate to advertising vibrancy.

In the post-pandemic times, amid a massive transition to digital, how do you see consumers’ engagement with print media? What are the emerging trends? How do the GenZ interact with print media?

During the pandemic, our research showed that time spent on our newspaper increased significantly. This led to higher reader engagement for our readers. The fact that our editorial product is superior and constantly upgrading has resulted in engagement levels staying high even post pandemic. Dainik Bhaskar is the first pick for readers in all our markets. Readers have realised that they can trust our carefully curated product. This credibility premium is a key trend that is extremely relevant. We notice that at a certain age, when GenZ starts to enter the competitive education scenario, there is the need for a credible knowledge medium. That’s where serious interaction with Dainik Bhaskar starts and gets built.

Could you give us an idea of print readership break-up between the Metro and Tier 1 markets and the Tier 2, 3 and rural markets? What is the uptake for print media in the regional markets?

Indian Language Newspapers are growing their circulation copies. Around 90% of India’s population resides in Tier 2 and 3 cities. This population is growing by around 1% every year. Literacy level and economic indicators are improving in these parts of India. Due to very less commuting time of around 15-20 minutes between residence to office, people have sufficient time in the morning to read newspapers, unlike in the metros. The head room for readership and circulation copies increase is big, since currently only 35% of the population of around 1.2 billion who can read newspapers are currently reading newspapers.

What are the various cost optimisation measures that Dainik Bhaskar has taken to strengthen its operating results?

Automation in the various systems process, use of non-conventional energy, upgrading the entire technology and use of Apps in various processes – all these have taken productivity, accuracy and speed to a different platform.

With 2024 being the year of Lok Sabha elections, what kind of a pick-up do you see for overall print media revenues with the election-related spends?

As already mentioned above, Newspapers’ revenues are rising with strong traction from traditional and new digital and app-based categories, due to credible medium vehicle. Consumption size and motivational and positive quotient generally witness higher scale, which results in larger money on the ground and results into bigger media spends. 

What does the future hold for print media in India? What steps need to be taken to further strengthen print media to remain a strong platform and garner higher revenues?

Newspapers are rising in India, which is evident from strong revenue growth since the last couple of years, on the strength of strong Advt. show. Newspapers cost around $1.5 a month, which is probably the cheapest with unique proposition delivery of hyper local + national most credible and trustworthy media vehicle and hence, media agencies and advertisers’ preference. 90% of India’s population resides in Tier 2 and 3 towns, which is growing every year. Literacy and economic indicators are improving in this part of India. Only 35% of the population who can read newspapers are currently reading newspapers. This provides a huge head room for sustainable, long term circulation and readership growth. With India being tipped to be the engine for the Global economy and is poised to become the 3rd largest economy, we are in exciting times and are very bullish about contributing as the 4th pillar of democracy to reach to new heights.