Next price revision in ad rates only in April '11: Girish Agarwal, DB Corp

On the back of Kotak Securities' report yesterday on stabilising newsprint prices and consequently newsprint stocks going up on trade today, Girish Agarwal, Non-Executive Director, DB Corp talks to ET Now on what's on the pipeline for the company going ahead. Excerpts:

What’s your opinion and outlook on newsprint prices?

Girish Agarwal: In the first half of the year, we have seen around 4.5-5% growth over last year and now since the numbers seems to almost stabilise, so we feel that in the next six months, there will not be any growth on the newsprint price and this certainly will help us in maintaining our EBITDA margin what we have been achieving so far.

How much will the stabilisation help FY11 margins?

Girish Agarwal: We feel that whatever we have done in last six months with this newsprint price is softening down or maintaining, we should be able to still achieve the number what we have done so far.

Have you seen some bit of recovery in advertisement revenues? On a quarter on quarter basis if you can give us a sense of how much have advertisement rates recovered?

Girish Agarwal: We did the advertising rate, tariff increase, sometime in the month of May and June and for the first three months, we could not get any increment from the market but good thing to say that in the season of Diwali and now onwards we are seeing that there has been a growth in the advertisement rates or the coming down of discounts happening in the market. I guess that’s going to help us further increase our advertisement revenue going forward.

Anymore upward revision in advertisement rates expected soon, especially in tier 2 cities?

Girish Agarwal: Generally the advertisement rate revision happens once a year, so since we have done it in the month of May this year, so I guess the next rate revision will happen sometime in April 2011 only now.

Where do you see the big growth coming from? Are you looking at new markets, new products?

Girish Agarwal: DB Corp is largely focussed on the tier 2 and tier 3 cities in India and if you noticed that the growth, which is actually coming in India is coming from the tier 2 and tier 3 cities and that’s where we are focussed, so we feel the cities like Ahmedabad, Jaipur, Chandigarh, Ludhiana, Amritsar, Bhopal, these are the places, which are really booming and the large chunk of growth is going to come from these cities.

So for us, the large growth is coming from our existing markets and also a part of it coming from the newer market, like we have just launched our Jharkhand edition, Ranchi and we are launching our Jamshedpur edition early next month, so some part of the growth will come from these markets but the large chunk of growth is going to come from our existing states of Gujarat, Rajasthan, Punjab, Madhya Pradesh and all.