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In-line growth; margin plays spoilsport

DB Corp (DBCL IN) posted in -line revenue in Q4, although elevated newsprint prices pared down margin below our estimates. Q4 print advertising growth of ~6% YoY was led by strong traction across education, real estate, healthcare, jewelry , and automobile segments, while FMCG remain s flat. Circulation revenue declined slight ly due to fewer copies, with shortage in blue collar workers . DBCL expects strong single -digit advertising growth in FY27, aided by improving advertiser sentiment s and Uttar Pradesh elections as key trigge r, partly offset by rising competition from digital media. Elevated newsprint prices remain key cause for concern, likely dragg ing margin. We expect ~5% revenue CAGR during FY26 -29E and pare down our PAT estimates by up to 12% . We maintain Accumulate with a lower TP of INR 260 after factoring in lower margin assumptions and elevated newsprint cost.

Print business uptick led by broad-based performance

The a dv ertising segment grew c6.0% YoY in Q4, driven by double -digit growth across education, real estate, healthcare, jewelry , and automobile categories, while FMCG remain s flat. Growth was volume -led , as advertisement yield remains flat. Government advertisement normalized , due to the absence of election spending in the p ast year. Management expects strong single -digit advertisement growth in FY27 (we estimate 7% on flat base), although elevated newspr int cost and rising digital competition may moderate margin expansion. We expect a 5.3%  revenue CAGR for the print segment during FY26 -29E

Circulation revenue remains stable:

It dropped 0.9% YoY, driven by a decline of 2% YoY in circulated copies, but lower than the industry’s; thus, DBCL continues to gain market share. Segment faces challenges, such as shortage of blue -collar workers. Its strategy is to retain focus on stability by resolving distribution hurdles and going deeper into existing markets; hence, we expect a modest revenue CAGR of 2.0% during FY26 -29E . On the digital and other front, revenue grew by 102% YoY on low base, the DB Ap p currently operates 20mn monthly active users (MAU) , and DBCL plans to scale up the business in the northern belt (in Uttar Pradesh). We expect the digital segment revenue CAGR of 7.0% during FY26 -29E . Elevated newsprint price hits margin: QoQ gross margin contracted 120bp YoY to 71.5% in Q4, given elevated newsprint prices , due to ongoing global geopolitical issues. Newsprint prices rose to INR 49kPMT in Q4FY26 (vs avg of INR 48kPMT, up 2.1%). While DBCL expects EBITDA margin in the range of 24 -26%, expectations of another 6 -8% rise in newsprint prices in FY27 could result in an impact of 130bp on gross margin to 71.1% and EBITDAM of 21.1% in FY27E.

Retain Accumulate with a lower TP of INR 260:

Q4 topline was as estimated, although elevated newsprint prices played spoilsport on the margin front. Consolidated revenue FY26E of 0.6% was flat on high base; we expect ~5.0% revenue CAGR during FY26 -29E. Uttar Pradesh election in FY27 is a key monitorable for growth. With ~8 -10% increase in newsprint prices, we expect 130bp lower gross margin, and 60bp lower EBITDAM in FY27E vs FY26. Thus, we pare down our EBITDA to 9% and PAT by 12% during FY27 E. Thus, we ma intain Accumulate with a lower TP of INR 260 from INR 280 based on 12x (unchanged) FY28E P/E (trading at 10.8x). We introduce our FY29 estimate .

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