D B Corp Ltd Management Discussions.

Economy Overview:

The Indian economy remains one of the fastest growing major economies in the world. The Indian economy started the fiscal year 2018–19 with a healthy 8.2% growth in the first quarter on the back of domestic resilience. However, growth declined in every subsequent quarter, bringing the annual growth to 6.8% compared to 7.2% in FY 2017-18. The decline in growth has been attributed to a combination of global and domestic factors, including rising global financial volatility, normalised monetary policy in advanced economies, externalities from trade disputes, investment rerouting and a slowdown in domestic consumption and investment impulses.

The RBI projected, in its April monetary policy, that GDP growth for FY 2019-20 was projected at 7% with risks evenly balanced. The monetary regulator pointed out that on one hand, domestic private consumption, especially in rural areas, has weakened in recent months. This, coupled with weak global demand due to escalation in trade wars may further impact India’s exports and investment activity. However, on the other hand, political stability, high capacity utilisation, the uptick in business expectations in the second quarter, buoyant stock market conditions and higher financial flows to the commercial sector augurs well for investment activity.

The World Bank, however, was a lot more sanguine in its forecasts, projecting a growth of 7.5% during this and the next two fiscal years as a result of a more accommodative monetary policy environment and low inflation.

Media and Entertainment Industry

As per FICCI – EY’s Indian Media and Entertainment Industry report - 2019, the Indian M&E sector reached Rs. 1.67 tn (USD 23.9 bn), clocking a growth of 13.4% between 2017 and 2018. With this current trajectory, the Indian M&E Industry is expected to cross Rs. 2.35 tn (USD 33.6 bn) by 2021, at a CAGR of 12%.

India has been a growth leader among major emerging markets and developing economies, over the last five years.

The M&E Sector is ripe for consolidation and is going to continue to see the digital media, multiplex, radio and TV distribution segments acquiring strong business verticals to expand and complement their existing business. This is a trend likely to continue going forward as large media companies look to further strengthen their position in this fast-growing sector. A healthy advertising environment, with close to 12.7 percent growth, propelled several parts of the industry to unprecedented growth.

Segmental Growth in the Media and Entertainment Industry

( Rs. in Bn)

Segment CY 2016 CY 2017 CY 2018 CY 2019 E CY 2021 E CAGR (2018-21P)
TV 594 660 740 815 955 8.8%
Print 296 303 306 317 338 3.4%
Films 122 156 175 194 236 10.6%
Digital Media 92 119 169 223 354 28.0%
Animation & VFX 54 67 79 93 128 17.4%
Live events 56 65 75 86 112 14.0%
Online Gaming 26 30 49 68 120 35.4%
Out of Home Media 32 34 37 41 49 9.2%
Radio 24 29 31 34 39 8.0%
Music 12 13 14 16 19 10.8%
Total 1,308 1,476 1,674 1,887 2,349 12.0%

Source: FICCI-EY report, ‘Re-imagining India’s M&E Sector’ (March 2018), FICCI-EY report, ‘A billion screens of opportunity’ (March 2019)

Advertising growth to remain robust

India’s advertising spends have been growing at a healthy pace over the past several years, driven by increasing urbanisation, rising inspirations and aspirations, and a growth in discretionary spends. However, in relative terms, India’s ad spends are low compared to the size of economy. This creates considerable headroom for future growth. It is expected that India’s demographic structure, rising income levels and increasing disposable income, amongst other triggers, will drive ad spends.

Ad spend as a percentage of GDP

Print Media

In terms of size, Print is the second largest segment, after Television, with a 31% share of advertising spends. In the Print Industry, Hindi Newspaper publications continued to lead with 37% of total ad volumes, while the share of English Publications stood at 25%.

Print Overall Market

( Rs. in Bn)
Revenue CY 2016 CY 2017 CY 2018 Growth in 2018
Advertisement 214.8 216.2 217.1 0.4%
Circulation 80.8 87.3 88.3 1.2%
Total 295.7 303.5 305.5 0.7%

Source: FICCI-EY report, ‘Re-imagining India’s M&E Sector’ (March 2018), FICCI-EY report, ‘A billion screens of opportunity’ (March 2019)

Circulation at Rise:

Audit Bureau Circulation (ABC) press release revealed that the Indian newspaper industry is witnessing a CAGR growth of 4.87% over a 10-year period from 2006 to 2016

Readership Base Expands

The most recent Indian Readership Survey (IRS) 2019 Q1 has flagged that readership of Dailies in India is rising by 4.6%, adding ~1.8 crore readers between IRS 2017 and IRS 2019 Q1.

Read in Last 1 Month (in crs) ( Rs. in Bn)
All India IRS 2017 IRS 2019 Q1 Increase in readers (crs) Growth (%)
Any Dailies 40.7 42.5 + 1.8 Cr 4.6%
Any Hindi Dailies 17.6 18.6 + 1.0 Cr 5.3%
Dainik Bhaskar 4.6 5.3 + 0.6 Cr 13.9%
Any Regional Dailies 20.3 21.1 + 0.8 Cr 3.9%
Any English Dailies 2.8 3.1 + 0.3 Cr 13.7%

Source MRUC Website – http://mruc.net/uploads/posts/b4c4dc7e0fce3369473c0c1a93196bfb.pdf

Huge Headroom for Print Growth

~25% of Population currently reading the newspaper

Indian print media differs from the trends displayed in western markets, on account of some key reasons, mentioned below:

1. Population: growing at ~1% p.a. 2. Literacy: improved from 64% to 74% from 2001 to 2011
3. Credible content: no Fake news 4. Difference in lifestyle: enough time in the morning
5. Huge headroom for future growth: with ~25% currently reading 6. Availability: freely distributed
7. Hyper-Localisation: on ground news coverage 8. Affordability: low cost

Age-wise Readership Growth

(Source: IRS 2019 Q1)

India’s push towards increasing literacy levels is helping to penetrate deeper and expand the readership base across demographics.

12-15 YRS 16-19 YRS 20-29 YRS 30-39 YRS 40-49 YRS 50+ YRS
TR Increase Growth Increase Growth Increase Growth Increase Growth Increase Growth Increase Growth
(lacs) (%) (lacs) (%) (lacs) (%) (lacs) (%) (lacs) (%) (lacs) (%)
Any Dailies 22.2 4.8% 23.7 4.6% 36.9 3.8% 32.4 4.5% 23.2 4.4% 36.5 5.7%
Any Hindi Dailies 12.5 5.2% 13.7 5.1% 22.4 4.9% 14.8 4.7% 12.2 5.4% 17.9 7.0%
Dainik Bhaskar 7.6 12.2% 9.3 13.2% 17.9 13.5% 12.2 14.2% 7.1 12.7% 9.6 16.9%
Any Regional Dailies 9.2 4.6% 8.3 3.5% 12.8 2.6% 17.7 4.4% 11.2 3.7% 19.1 5.0%
Any English Dailies 5.7 19.3% 5.8 14.6% 11.5 13.6% 6.9 15.2% 3.9 13.0% 4.5 9.9%

Two unique initiatives launched during the year were a scholarship for meritorious children of employees and Sukanya Samridhi Yojana. This was launched in the memory of the beloved Chairman, Late Shri Ramesh Chandra Agrawal.

The Company also continues to connect with employees through its trend setting policies for the welfare of Bhaskarites and family members, like Aapaat Nidhi (a critical medical exigency fund), Saubhagyawati Bhav (assisting employees financially for their daughters’ marriages), Shubh Laxmi (welcoming the birth of girl children), Sparsh (gift on the occasion of the birth of a male child), option to take leave on special occasions (on the anniversaries of employees, family members’ birthdays, paternity & bereavement, etc.).

The company engages with the best available manpower pool in key business functions. It brings out their potential through training and development initiatives and an enriching work experience. DBCL also believes in inculcating a strong value system in its people and conducting regular trainings for them.


The Indian advertising industry is projected to be the second fastest growing advertising market in Asia, after China. Indian M & E Industry is expected to reach Rs. 2.35 tn by 2021 at a CAGR of 12%. In the media and entertainment sector, there is a trend of convergence and integration of content and advertising platforms. There are brands, which initially offered services pertaining to technology and distribution, which have now moved into content. Service providers have moved to content creation with integration of technology and distribution.

Print Segment

The print segment benefitted from the general elections in 2019, particularly on the back of the DAVP rate increases, as well as stable newsprint prices. Cover prices will need to increase going forward. Print companies will tilt their sales pitch towards performance, linking physical space sales with digital inventory, activations (both physical and digital), interactive concepts, digital couponing, etc.

Radio Segment

Growth in 2019 will be fuelled by ad spends in the upcoming elections, non-FCT revenues and the firming up of ad rates in regional markets. Companies will focus on building communities to understand consumers better and enable brands to connect directly with their audiences. There will be increased collaboration between radio players and streaming apps to increase fill rates on streaming audio platforms and sell segmented audiences to advertisers.

Digital Segment

Digital video viewing – already one of the top digital activities worldwide – will continue to grow, driven by expanding mobile usage and improving broadband connections. Industry analysis indicate that while time spent could grow 3 to 3.5 times over the next five years, resulting in a massive inventory growth, advertising revenues will grow only around 2 times. CPMs will correspondingly fall by upto 50% during the period for non-premium inventory.

For and on behalf of the Board of Directors of
D. B. Corp Ltd.
Sudhir Agarwal
Place: Mumbai Managing Director
Date: July 18, 2019 DIN: 00051407