D. B. Corp Limited (DBCORP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the D.B. Corp Limited Fiscal Q4 FY '21 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Ms. Tina. Thank you, and over to you, ma'am.

Thank you, and good evening to everyone. We welcome you to the D.B. Corp Limited Q4 and FY '21 post-earnings call. We have with us today the senior management team of D.B. Corp Limited, Mr. Pawan Agarwal, Deputy Managing Director; Mr. Girish Agarwaal, non-Executive Director; Mr. P.G. Mishra, Group CFO; Mr. Mushtaq Ali, Vice President, Finance and Accounts; Mr. Lalit Jain, CGM Finance and Account; and Mr. Prasoon Kumar Pandey, Head, Investor and Media Relations, who will represent D.B. Corp Limited on the call. They will be sharing the key operating and financial highlights for the quarter and year ended 31 March 2021, followed by a question-and-answer session. Before we begin, we would like to state that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Documents relating to the company's financial performance have already been e-mailed to you and are available on the website of the stock exchanges and company's investor website. We trust you have been able to go through the same. Now I invite Mr. Pawan Agarwal to share his outlook and D. B. Corp's performance for the quarter. Thank you, and over to you, sir.

Thank you, [ Veena, ] and good evening to everyone. Hope you and all and your families are healthy and safe. We will begin the call by highlighting the key financial performance for the quarter ended March 31, 2021, followed by operational updates during the quarter. We are happy to share that improved economic conditions, coupled with our continuous efforts towards cost rationalization and supported by continued soft prices for newsprint have aided in improving our profitability. In Q4 FY 2021, we reported a net profit of INR 619 million, registering a growth year-on-year growth of 158%. The operating profit stood at INR 1,047 million, a Y-o-Y growth of 52%, wherein our operating margins have seen a significant improvement, have expanded by about 900 basis points from 14% to 23%. Consolidated advertising revenues stood at INR 3,084 million in quarter 4 FY 2021 while circulation revenues stood at INR 1,000 -- INR 1,104 million, and the total revenues came in at INR 4,601 million. Talking about FY '21, we have reported revenues of INR 15,222 million, with operating profits of INR 3,193 million, and a PAT of INR 1,414 million. Various cost measures implemented in the year has supported the bottom line. Dainik Bhaskar Group Radio business continues to maintain a leadership position in all significant markets. Radio advertising revenues for the quarter stood at INR 278 million, with an operating profit of INR 93 million and a net profit of INR 132 million in quarter 4 FY 2021. Radio business has got music royalty reversal as per Intellectual Property Appellate Board decisions, which is being shown below EBITDA since it pertains to previous years. Despite the challenging times, we continue to outperform the entire print industry in terms of advertisement and circulations on the back of our reader centric approach, editorial excellence, product innovation, and well thought and implemented circulation strategy. Going forward, we try to further strengthen our position in our markets by delivering compelling value to our readers as well as advertisers. I would now request Mr. Girish Agarwaal.

Thank you, Pawan. Am I audible? Hello?

Yes.

Yes. Thank you, Pawan. Good evening to everyone, and I hope that everyone continues to stay safe and healthy. Over the past year, the print media landscape was undergoing a structural shift with the COVID-19 pandemic accelerating some of these trends with Indian language print emerging much stronger. And on the back of a significantly improved performance to its English counterpart, in terms of circulation as well as advertising revenues. During the pandemic, with the increase in fake news on social media and unsustained main formation being circulated, print media witnessed these renewed focus from the advertisers on the backdrop of being the most credible medium in news dissemination, further validated by well-known research agencies like the Ormax survey which conducted the cancer study just a new study in last year and the ASCI Trust Study in December of 2020, which indicates that the overall credibility print is at the top and is further increase compared to the other mediums -- new mediums. As you are aware, at the onset of the first wave of COVID-19 pandemic print industry experienced massive disruption while amidst the second wave, it has managed to remain relatively unfazed. And especially the Indian language newspapers. The circulation numbers remaining largely intact and an improved engagement with readers. On the editorial front, I'm proud to say that Dainik Bhaskar Group continues to strive for editorial excellence even during these difficult times. Our editorial teams have put their best foot forward in curating the best content for its reader while maintaining its high standard of journalistic integrity and ethics. Dainik Bhaskar Group editorial team continues to stay true to its core value of courageous and honest journalism and provided extensive coverage of the ground realities of the healthcare infrastructure, as well as the treatment of the departed which has gone at Dainik Bhaskar Group of global acknowledgment. Our stories were replicated by the various reputed global media houses like the New York Times, which has published the story today, written by one of our editor -- The Guardian, BBC, CNN, Washington Post, they all have really taken the link from Dainik Bhaskar stories and published them to be known to the world. Along with that, in social media, most of the Dainik Bhaskar stories were tweeted and exchange views by various people across the globe. We believe our reader centric internal approach will continue to strengthen our position further in the market we operate and thereby result in improved advertiser spend. And I must really acknowledge and thank our editorial team, our brave journalists, those who really went out while the whole world is working from home, our journalists actually went out to find out the truth, what is actually happening on the ground to make people aware about it. Whether it's the story of the Ganga, where our team went and covered the 1,100 kilometer patch of the Ganga banks and found out that the dead bodies of COVID departed were just buried there or left in the Ganga and while the government was not accepting the fact our people went there and did the story with the pictures and the facts, our journalists went to the crematorium where the relatives of the dead were not coming too for the last rites, but our journalists went there to find out what is the truth, how many people actually died out of COVID and inform the government so that they could take the necessary correction action for the safety of the people at large. So I must really thank all the journalists, those who took that effort. And they actually risk their life. It's very easier said than done, but I think hats-off to all of them. On the circulation front, our circulation team continued effort and focused strategies have yielded strong results. We're happy to share that in Q4 FY '21, the circulation registered the growth of around 300-basis point on the quarter-on-quarter basis, enabling the group to achieve 90% of the pre-COVID circulation level. Further, these efforts were also helped us reaching almost 95% circulation back in some of our stronger additions also. The recoveries have been significantly higher in the key states of Madhya Pradesh, Rajasthan, Gujarat, and Bihar. We are happy to report that during the second wave of COVID-19, we continue to remain tall, our team's effort and strategy formula during the first wave has not only needed in safeguarding our circulation during these times, but in fact, we have gained the market share in most of our markets. On the advertising front, the financial year '21 has been a truly challenging year. But at the same time, keeping with our philosophy of turning adversity into opportunity, Dainik Bhaskar team continued to be at the forefront of innovation in the entire print industry in India. We published almost 20 mega additions across our major markets, which was a kind of a testimony of recovery streaming from the Tier 2 and 3 cities and beyond markets we operate in. During the year, we have undertaken various initiatives like virtual market visits to marketers, advertisers, various initiatives to work with the advertisers so that they can get some response and we can also get some revenue from that. Our cost optimization efforts have resulted in a saving of around INR 195 crores in overall other operating and the personnel expenses put together. If you remember, last year, we made an estimation that we could be able to save INR 125 crores, but I think with the efforts of our team, we were able to go up to INR 195 crores. And out of this INR 195 crores, our current estimation is that for the next year, we should be able to take 55%, 60% as the sustainable saving even going forward. The dissemination of our content via digital medium is another significant emphasis area into the company. We continue to invest in our digital business with a long-term focus on increasing the numbers of daily active users on our app. Our large focus is on our app only, and we have made significant strides in this area. Our strategy of creating the best-in-class ad free user experience on our digital app has got a lot of reader engagement and has given us almost 5x growth of our users in last 12 months' time as per the latest Comscore report. Furthermore, our India and Gujarati news app are one of the highest-rated news apps, a result of high-quality content, creation and a highly tailored product experience. This is all from our side. My colleagues and now, I will be happy to respond to your questions. Thank you.

[Operator Instructions] The first question is from the line of Amit Sharma from MG Investments.

Congratulations for the impact of the news you have created in the past few months. My question, one is on the COVID wave 2, now that's hit the non-metro particularly hard. So what changes do you see, or any structural changes do you see due to this? And anything in the advertiser profile?

So we have -- see, what has happened is COVID second wave actually came in the month of April and the lockdown happened in April and May. And now in the first week of June, most of these states have opened up. In last 2 months, suddenly, the advertising was very subdued. But the circulation-wise, we didn't see major impact. We saw an impact of around 5%, 6% copies, which is now gradually coming back. So advertising so far, it looks still good that going forward because we noticed in the month of June, since the time the market has opened up in the last 15 days, we are seeing the traction back from the real estate, auto and other categories also.

All right, all right. But any changes than what you saw in the wave 1 in the advertiser profile or it's too early?

Too early, to be very honest.

All right. My second question is on the outlook of radio industry for the next 3, 5 years. So the way you created an impact for news in the newspapers, do you think anything of some lines in the FM industry or any other changes which they want to bring about?

So on the radio, what is changing in the radio is number of people with smartphones and ability to deliver radio to their handsets. Two is also the music, the kind of music that is coming now has really improved and has gotten people. And third, we have realized that the radio in future has to be a local medium. And which means more and more local content, more and more local jobs, and more and more personalization of music. So we're optimistic about radio listener share. And the fact that it has to grow, it will grow only by way of making it as local as possible and not syndicating it, not running like a one show across the country, not running same music across the country. And that has worked well for us all these years.

Sure. Sure. And my third question is as companies have been globally tying up with print medium, in our country, when do you think that moment is or any guidelines or any timelines which you can share as to how this should evolve?

Sorry, I couldn't get your question, please.

So what I was saying is we are hearing ad type companies tying up with global print companies, right? Do you see that -- what are the timelines do you think that has happened in India? I mean how far or close are we for that?

Yes. I think as I mentioned to you, our digital number is also growing. And we are confident that maybe in the next few years' time, digital and print is going to grow together. Now when the subscription model will emerge in digital is anybody's guess right now.

[Operator Instructions] The next question is from the line of Himanshu U from PGIM Mutual Fund.

So my first question is the way the business is evolving. Do we want to enter new geographies in next 1 or 2 years? Means, the circulation strategy which we had earlier was to enter new geographies and aggressively expand. Is there rethinking what we are trying to do on that strategy? Or what would be your pathway from here on? Any...

If you remember. I think 2, 2.5 years back, in fact, 3 years now, we announced that we don't want to enter into new geography. We already have enough markets with us. Now idea is that how do we grow those markets furthermore, whether it's Madhya Pradesh, Gujarat, or Rajasthan, how do we increase our market share there in circulation as well as the ad revenue. So any new geography is totally out of question.

Okay. And in the emerging markets, where we have -- are still to breakeven, okay? If we see those market itself, we need at least double of revenue to break even, okay, and show profitability. What are we doing to improve those profitability? And how soon can we think of breakeven in those markets now?

So I think we have to look at the market individually, whether it's Bihar, Jharkhand, or Maharashtra, those were emerging markets. In fact, I'm happy to announce that most of these markets actually became EBITDA positive 2 years back before the COVID. But for COVID now, we'll have to restart the whole work over there so that they come back to the profitability and improve from there. And the work is on, on that.

Okay, and 1 more thing. In the local markets, have you seen any smaller players moving out of the business in print media or any consolidation opportunities? What has happened on the ground in your industry? Can you elaborate?

I think this is a very relevant market, [indiscernible]. And I'm happy to share with you that this -- there's always an opportunity in adversity. So I think in last 1 years' time, what we have seen that most of the players in most of the market -- forget the smaller player, I'm talking about the #2 or #3 is also have kind of got shaken up. And they have done the cost-cutting left, right and center. And in a way, they have compromised the product. And there's a reason post-COVID, we are seeing an improved market share, whether it's Rajasthan, Gujarat, Madhya Pradesh, Bihar. In all these markets, we are seeing in our market share in terms of circulation and the share of wallet as well as the share of mind, we have a larger market share happening. And that is what we need to strategize now, we are strategizing, to ensure that we are able to take the advantage of that going forward.

See because -- can you elaborate? Let's -- because see in this market share, the issue is this, that for us, also the circulation is down only. If I see, sir, revenue-wise, okay? So how much you would have gained, it is very difficult to really get a hold off on the numbers side, okay?

So we are -- since we operate in those markets. So for example, in a particular market, I'm down by 10%. I actually went down to 20%, then I recovered 10%. I'm now down by only 10%, which I'm 90% of the base. But my competitors who are still struggling at around 70%, 75%. Which means I have gained faster than my competition. So my market share and circulation has changed. And that is what we are working on to see that how that can be brought in the impact on the advertising.

Okay. And let's see, when we read about Bombay, okay. So 1 of the newspaper is local newspaper is out from the English space, okay? And the other English newspaper has shown a better profitability or revenue growth. Or let's say, better circulation, okay. How -- but in our case, we are not yet able to see that. So how soon or late will it start showing into the numbers side? So what you are expecting?

It's, again, a very relative and competitive working. So for example, in a particular market of, say, Gujarat, now I know my market share in Gujarat has improved compared to post -- pre-COVID. And now the advertising has to come back to me. And I -- that's what the planning is that the advertising with what comes back in the market, I should be able to take a lion's share of that. So I think in next 6 to 12 months' time, we should be able to really get the number from the ground that have we improved our market share in terms of advertising also or not, or the improvement in the advertising rates and all.

I have 1 last question, then I'll join back in the queue. In the radio versus the newspaper in the local media, which space do you think the advertisement will come sharper and faster? Means, what is your assessment?

Obviously, people come back to the print much faster and sharper. And then they look into the other medium outdoor, radio and all that. And that's what's happening in our market. If you see the print in the fourth quarter also, we have a faster recovery, though we still have around 6% less than over last year. But radio is slightly lesser than that in terms of recovery. So obviously, the print comes faster for the local.

[Operator Instructions] Next question is from the line of Himanshu Shah from Dolat Capital.

Congratulations for good set of numbers. Sir, can you just provide outlook on newsprint prices. This quarter, we have seen marginal increase sequentially. You had called out this in last quarter itself. How is the newsprint price stand looking from here on? FY '21 had been quite supportive in that sense on newsprint front.

So let me give you the numbers out. If you look at the quarter 4 of this year what we finished, our newsprint prices, rates per tonne was in the range of 36,600, 36,700 which was -- sorry, 35,600, which was almost 4% decline from the last year, but almost 3% up from the Q-o-Q. Looking at the trend right now, I think because of the Indian manufacturer still facing acute shortage of the wastepaper as well as the fuel prices up, the transportation and all, these prices are going to go up by almost 12% to 15% in the next quarter and maybe from the third quarter onwards, we may see some softing.

Okay. So we are expecting a 12% to 15% increase in terms of newsprint prices?

Yes.

Okay. And from third quarter onwards, sir, hopefully, we should see settle over what kind of financial numbers. Is it fair to assume, it should pull off by 5%, 6% from the increased level?

Should be sharper than that. Why? Because the availability of the wastepaper will be good enough. Because suddenly, what has happened in the last 2 months' time because of lockdown, again, the wastepaper movement didn't happen in India. And all these mills, they are depending on the wastepaper to do the manufacturing. So I think that should improve.

Okay, and sir, globally, in terms of import of newsprint or any other stuff, there is no particular shortage or anything specific, but there are no global factors at play for increase in newsprint prices.

No, as I mentioned to you in global factor facing the same problem of the wastepaper. So most of the manufacturer, those who are making newsprint, they didn't have the wastepapers available to them for manufacturing. So that's the reason they were also facing the problem of the prices, input cost. And though availability was not a issue, that's the reason our ratio of the imported newsprint from 39% of the overall last year went up to 54% this year.

Okay. Okay. And sir, imported newsprint should be costlier than Indian and by how much percentage?

It all depends from the quality to quality. In certain cases, it's at times is almost at par. Depends on which port you are taking in and which Indian suppliers you're buying it from.

Okay, fair enough. Sir, second question related to cost a significantly good job on cost front. However, on a quarter-on-quarter basis, there has been a sharp jump in employee costs and even other expenses have gone up. Anything specific over years? And this is the run rate that we should project for future quarters.

So 3 reasons. First of all, the ESOPs were booked in this quarter. The performance pay of the Q4, which was to incentivize the team to make sure that they're able to get the job done in the ground furthermore. And also in digital, we have increased our expenses in digital to get the traction much more.

Fair enough, sir. So sir, ESOP should be like a onetime expense, fair to assume that.

No, largely onetime. But as and when it -- every year, it happens.

Okay. Okay. So sir, fair to assume from next quarter, we should be back again to that INR 90 crores, INR 95 crores range on a quarterly basis for employee costs.

Yes, yes, very much.

Okay. And sir, increase in other expenses largely on account of increase in other operating income.

Yes, yes. And also what has happened, the other operating income has slightly gone up. And because of the Q4, certain expenses as we booked in this Q4.

Fair enough, sir. Sir, the third point on our dividend. So we have scaled back much on our dividend. So shall we envisage any kind of buyback or any further payout in coming quarters?

In today's Board meeting, the Board has considered and recommended a INR 3 dividend. Even in these difficult times, Board has recommended a INR 3 dividend as a final dividend. Our dividend policy, just to reiterate that is the same that company doesn't want to keep any extra cash in the books. So whatever the cash available, we would be ensuring that we pass it on to people as dividend. And this time, the bank balance and cash balances were almost INR 315 crores as on 31st March. Board took a call that looking at the overall scenario, we still wanted to give a INR 3 out and then keep some cash now and take a further call in the coming quarters and announce the dividend.

Fair enough, sir. Sir, just one last question on the yield -- advertising yield front. Can you provide some color means now print as an industry had been struggling since last 4, 5 years, even before pre-COVID since the monetization and GST aid? So how does the yield compares currently versus pre-pandemic level or from a peak yield that you would have achieved at a portfolio level or at a company level? Where would we be on yield front?

Frankly speaking, this yield is a very theoretical question right now. Why? Because most of the time, the deals are right now because of the last 1-year issue was happening on the total ticket size. So I'm willing to give out some more discount if a person is willing to increase my budget, what they have been spending with me last to last year. So to be very honest, the focus is not on the yield. Focus is on the total number this year.

Fair enough, sir. Sir, I'll try and ask this question in a slightly different manner. Probably, sir, in FY '19, we had a peak advertising revenue of around INR 1,560-odd crores. When do you feel or and -- as once the normalcy returns, I know currently, these are a bit of uncertain times, but assuming that normalcy starts coming back from H2 of this financial year, when do you see this kind of run rate coming back?

I'm so confident that the moment normalcy comes in, we should be able to clock better numbers than this.

The next question is from the line of Yogesh Kirve from the B&K Securities.

So Google has globally launched a new showcase product and be doing various partnership with the various publishers and I understand even in India, they announced some partnerships. So where are these -- are we also in negotiations for this particular product? And what could be the expectation, or the size of this opportunity could be from a 3 to 5-year perspective?

So we are in talks with Google, discussing that how we can help them in India in terms of their search because people come and search for what, people come on Google to search for news and news come from the news organizations. So working on them, in active talk with them to see if some kind of arrangement can be worked out with them.

Okay. So if there is any sort of quantification of any qualitative color of whether this would be -- whether we anticipate this to be a very significant driver of at least digital revenues?

So if you see what happened in Australia, and France, and U.S., in Australia, the regulator has asked Google to share almost 10% of their revenues with the publishers. In France also a similar kind of thing. And in America, also they are talking. So we are expecting the similar kind of work to be done in India also. And we are approaching regulators to evaluate the whole landscape. And based on that, take a count, and I'm sure Google would be prudent enough to analyze the Indian market, the importance and take a call accordingly.

Okay, fair enough. My second question related to the inventory. So I understand with the volatility in prices, which is not a best of time to ask this question. But the inventory base used to be -- if you look at 3 or 4 years back, it used to be like 100 days of the raw material costs. And obviously, it has increased over the last 2 years. I think even if I take a 4Q run rate of raw material costs, it works out to like 175 days. So do we anticipate that or that this number should normalize from a like 2 or 3-year perspective or just or the high advantages pre or post.

So when you -- inventory, there are 2 things. One is that because of the lower pagination, if you see compared to last year, we had 20% less pagination. Because of that, southern inventories issue. As far as -- I think that's the only reason, frankly speaking. So that should not be a big, big issue. It should be getting corrected in next quarter still.

Okay. And just 1 point related to the -- you made reference regarding the newsprint prices would rise, I think, 15%. So we are referring to the spot prices, right? So our cost, that will -- we would incur can be different from that, right? It could be lower than that.

See, what has happened today is the newsprint manufacturers are behaving in a very strange manner. Some of them are not willing to honor their earlier commitments also and all that, because they have issue of their input cost, they have issue over transportation costs and all that. So we are negotiating with them. And let's see how it goes quarter-on-quarter.

Okay. Just finally, I think I appreciate some -- you already made some comments related to the second wave impact. But even more on that, I mean, this is the first wave we've seen sort of a revenue capitulating, not just for you or not just for print, but for the entire industry. So our assumption is the impact of the second wave is no way near that, right. And we are looking more like a more flattish trend rather than kind of heavy declines you are seeing post-first wave.

One thing I can say that the recovery on the second wave is much faster than what happened last time.

The next question is from the line of Ankit Shah from White Equity.

Sir, one question on the digital piece. Sir, we have disclosed a growth in MAU numbers over last 12 months. Sir, can you also share something about the DAU numbers accordingly?

Yes. So we can't give you the exact number as we took the liberty from you a couple of quarters back. But I can assure you that the growth what has happened in the MAU is almost resulting in the DAUs also.

Right, right. Okay. And sir, as a follow-up, sir, when do you anticipate introduction of subscription on the app, maybe or how far are we from subscription on the app, a few months, quarters? Or it's still quite some time away?

I would still give it more than a year.

The next question is from the line of Apurva Sharma from PGIM India.

My question regarding is digital properties. Just wanted to understand when the -- so we had a good amount of engagement on digital -- our digital properties, right?

Yes, of course.

So when -- just wanted to know your thoughts on -- is there some backing data there. When is the wave receives like first wave and now the second wave is opening up, does the user engagement level dip or it remains the same? Or how is it? Like, I'm just trying to understand.

See we -- a lot of growth came in during the first wave of COVID. And as you would have noticed, if you look at Comscore data of most of the news publishers, most of the publishers lost the numbers after the COVID wave last year. And we continue to grow. We didn't -- our pace didn't go down because we were one -- we were very focused on the app. So the app numbers continued to grow because we -- that was a loyal audience. And even if you compare the app numbers with other players on Comscore, you would have noticed that our numbers have been healthier than the overall landscape of app -- news apps. And if I look at the last 6 months, also, the interest has been increasing because our team is not focusing only on the content of COVID. We're also focusing on more of other needs of a user on the app, and that is helping us keep up the momentum.

So on that app analysis, so this is the usual number of downloads maybe about on an app user spending time -- per user spending time on the app, would we have that kind of data and is it improving or decreasing or same flattish just?

We're looking at time spent, let's say, and the time spent as well.

Airtel group.

Yes. We're looking at time spent, and the time spent is healthy.

The next question is from the line of Ayaz Motiwala from Nivalis Partners.

First, a quick clarification on the press release that you've done. There's an item which confuses me on the second page. It says consolidated operational revenue of INR 395 million or INR 39.5 crores and INR 41 crores. In the table that adds up. I cannot make out what is this item. Is this a digital item or something that you're trying to say in that?

In the -- I'm sorry, I don't have a press release copy with me right now, so may I request you to take this off-line with us?

Okay, sir, that's not an issue. I mean it's just confusing in terms of being able to process what you're shared.

I've got the copy. One second, I've got the copy. Could you take me to the which page you're talking about, please?

It's on the third page of your press release, there is a table.

Yes, which one, the financial results, the Q4 financial highlights?

Q4 financial results is the head. So the fifth sort of column 4, sorry, which has consolidated operational revenue.

Consolidated operational revenue, which is INR 39 crores has gone up to INR 41 crores.

What is this item, sir? I don't understand this.

This is on FDRs and few other things like that.

I'm sorry, this is what?

Interest on FDR, fuel fixed deposit, and a few smaller other things. Wastage sale also.

What's it, real estate sale?

Wastage -- newspaper wastage.

Oh, wastage sale. Okay.

Yes. We have around 2.5% newspaper waste happens. So that's the sale of that also comes in this.

Okay, yes, because it's operational, right? So financial income wouldn't be under this part will be wastage sale and other such things?

Yes. And why it has increased because the newsprint wastage price also has gone up. So that's the reason you're seeing an increase.

Yes, right. Okay. It's a pretty large number, sir. It comes in every year.

Yes. But I do thing, I'll ask our relationship office, Mr. Prasoon, to get in touch with you and give you the details of this INR 41 crores item wise.

Sure. Sure. No problem. Okay. So the other business-related questions that I have, which has often been asked to you and I guess skewed on the digital side. You're opening up a little bit in terms of daily monthly active users, how you're trying to create an active experience, et cetera. So would you say in the current reported numbers, there is some amount of digital revenues that you are making at this stage? Or there is still only an investment that you are going ahead with?

As you know, in our revenue, digital is almost nil because on our app, there is no advertising. We don't accept any ad on our app. So there is no revenue part, but the expenses, what we are doing to promote digital, the team and all that, is certainly a part of that.

Right. Okay. And sir, the related question on the way you broke stories on the crisis in Ganga related to COVID deaths and how the bodies are floating, et cetera. On an emerging scenario for readers, you said, there is a lot of loyalty building up on the online platform. And we are also seeing emergence of new competition, which does not have the legacy press background or even the TV background, which is essentially online. So sir, on the convergence side, do you see actually a possibility that you are primarily not present in the audio/visual medium in the form of TV, but you have obviously jumped on to the digital medium. Would you see an emergence of a cross sort of situation where people have minor tips of videos or such a podcast or some of that thing? Is that the evolution that you see in your user engagement and studies? Could you throw some light on that, please? It also covers a bit of your competition, sir, because your competition, which is the new digital competition is trying to do these kind of things to get on people like us as the these things are readings.

Yes. It does open up huge opportunities going forward in the digital format. As of now, are we monetizing it in some format? No, because our focus is to ensure that the engagement of the reader goes up with us. And as you mentioned, this certainly opens up other areas, which are not currently we are in, like we are in newspaper, but through digital format. Other areas opportunity also comes up. And we'll explore them as we go forward.

Okay. And just a last part to that question, sir. Does your team actually -- or does your media brief actually encourage your journalists to go towards that journey, which is -- I mean are you equipped to do audio visual medium along with the traditional press medium or the digital medium, which is still sort of electronic writing.

Certainly all 3,000 journalists have been given training over a period of last few years to understand how they capture a story for print medium and how they can do a short story for the digital medium with the pictures and videos and all that. Apart from that, there's a dedicated team for videos because video is a very specialized medium. So the dedicated team for that also. And I would encourage you, if you could download our app, is Dainik Bhaskar app, please download that and experience it.

[Operator Instructions] The next question is from the line of Rahul [indiscernible]

Congrats on your very good performance. Sir, as you have mentioned in earlier conversation that newsprint prices are going around 12% to 15% in Q2, and then Q3 will be a little bit softening. Are we having any strategy to cover this cost by increasing any cover price or any ad rate on that thing?

Yes, sir. So we have increased cover price across most of our markets, ranging from INR 8 to INR 10 a month.

Okay. And my second question, would you throw a little bit light on what is virtual market? Is it what you introduced during this pandemic?

This is actually most of the advertisers, those who are sitting in Bombay, Delhi, Bangalore, they are working from home. They don't want to step out to their office also. So we thought how do we give them the real-time experience of our markets of Madhya Pradesh, Gujarat, Rajasthan, Bihar. So we shot videos for them in those markets. And then we explain them that this is a virtual thing. But if you want to know what is happening in Indoor, because when you sit in Bombay and Delhi, you think the world is different. So we thought why don't we give you the glimpses? Because if you notice, right from September onwards, the entire Tier 2, 3, 4 was thriving, booming. We thought we must give them the idea that you may be sitting at home in Bombay or Delhi or Bangalore, but rest of India is not. They are back to action. So we put those videos and showed them to kind of took them to a virtual tour of our markets.

The next question is from the line of Depesh Kashyap from Equirus Securities.

Sir, while you answered one-to-one question that your talks with Google are still on, but just wanted to understand, if you know that the Google agreement with other 30-odd publisher that has already happened, is it on the same lines of agreements that happened in Australia and France or the revenue sharing terms are different?

Sir, those agreements are confidential. Obviously, nobody is sharing on those terms.

Okay. And secondly, sir, like if this agreement actually goes through, do you think you will reduce the effort on the cash flow that is happening in the digital side right now?

The revenue will come in, that will certainly benefit the company.

So sir, but the efforts that you are making for your own website or app, will that continue in the same pace or do you think you will reduce because you have a sustainable revenue stream going ahead with this?

No, no. When I get the more fuel, I will put more fuel in to increase my efforts.

Understood, understood, right. Secondly, sir, on Bihar market, I think it's still been considered as part of the emerging business for the last 3 years, if I'm not mistaken. So just wanted to understand what kind of difficulties you're facing there. And is there a timeline by when you think it will turn profitable?

So Bihar actually turned EBITDA positive in '18, '19. And in '19, '20, also, it was almost there, but because of the last month of March of COVID, and this year, all these numbers have changed. So I think now crucial for us that we rework on Bihar for '21, '22 and next year, to see that we come back again in a profitable situation there.

Okay. Got it. And sir, lastly, has there been any further drop in circulation copies again that this lockdown has happened in the month of May and June?

Yes. So in April, May, there was a decline in the copies and -- which is now coming back in June. And we are hopeful that by July, August, we should be back to our March '21 numbers.

So was the decline same level as last year? Or like...

Thankfully, this time, there was no unnecessary rumors and no -- so we got declined by around 5%, 7%. But that decline also happened because certain area was total lockdown. Like in Madhya Pradesh almost in few markets, no movement was allowed. Even for milk, you had to go out in a queue in a particular time. So that's the reason for a few weeks, the copies got dropped down in few markets.

The next question is from the line of Anish J from Banyan Capital.

Sir, I just wanted to understand in terms of our yield so you already -- I mean, you mentioned that you are looking at more volumes and not focusing a lot on the yield, but just wanted to get your sense of -- I mean, when will you try to recover those yields back? And how much are they down, let's say, versus the last quarter of Q3? I think last quarter, you mentioned some 5% odd yield decline, right? So where are we right now today? And has this yield drop been different between the different geographies and different states. So when we see some of our competition, so their yield drop has been much higher than what we have seen. So could you try to -- I mean, could you please explain what's the difference between us and the competition overall?

It is a very, very local phenomena. Depending on the market, depending on the category, depending on the strength. In certain markets, yields are pretty intact. In certain markets, they are very bad. Overall numbers you already know. In Q4, the number wasn't much different than Q3. But obviously, in Q1 of this year, like April, May, markets were down. So we had to offer people something to say, okay, come on, come on board, we will support you and all that. So I think as of now, to be very honest, in '21, '22, our efforts will not be on yield. Our effort will be to get the top line back. And then on '22 onwards, you will start talking again about the yield. But that doesn't mean that I'm going to throw away discount just like that. We are very cautious in our decision that I'm willing to support advertiser who's willing to come forward saying they're okay, I'm parking a larger chunk of money with you, and I'm looking for some more benefit. That's what we are planning to do.

Right. And also, would you please help to understand why are yields in say markets like we are, the pressure over there is more higher than, let's say, in our other markets, like say, Madhya Pradesh, Rajasthan.

Why? Because in Bihar, I'm a #2 player. So if the #1 player decides to offer a major discount, I really can't afford to say no to the client where the #1 is offering there. And in Madhya Pradesh, I'm in a different state where I can refuse the business and the advertiser would come back to me because of the response factor in the market.

The next question is from the line of [indiscernible] from JP Associates.

My question is actually a built up on a previous question that was asked regarding employee costs. We are seeing that costs have increased to 106 from 91. And you mentioned that there are 3 reasons behind that. First one being that the incentives were paid during the fourth quarter, right?

Yes.

And second was because of digital initiatives that you've taken, which was the third reason?

ESOPs.

Okay. And have you seen any difference or any increase in the headcount?

Yes, there have been a reduction in the headcount over last year?

During the fourth quarter?

During the fourth quarter, yes. It will show in the fourth quarter, yes.

Any numbers, if you would like to help us with?

I can -- with the department wise, market wise, our overall reduction over the period of 1 years' time has been in the range of around almost 6% reduction in manpower count.

Okay. And this is a across the department or any particular, of course, I mean...

Across the department, wherever we could use the technology, we could optimize the resources is on those fronts.

Okay. And going forward, we are seeing normalized levels of 1995 quarterly?

I would say, yes, I would say, in the same range, yes.

The next questions is from the line of Himanshu U from PGIM Mutual Fund.

A small question. Any sectors which are doing better or expected to do better on the advertising front and the sectors where we are expecting the growth may take time to come back for us? Any trends you're equalizing?

Automobile has started coming back in the month of June and which did pretty good in the fourth quarter. Education is 1 sector where I'm very concerned. Because what has happened, the examinations got canceled. There were no results to announce. Most of the schools, those who are used to publish a full-page ad saying that my so many student became meritorious. That business kind of got lost. Coaching classes, which were big advertisers with us, now the physical coaching classes are shut. So that is 1 category which is totally missing from our business because they all are trying online, but how people are, they don't pay for online. Everybody gets enrolled for online, but nobody pays. So that's 1 category I'm concerned about because that's a big category in the quarter 1 and quarter 2 also. Automobile, I'm very confident they will come back. Another category is entertainment, the cinema, all that business since the market is shut cinemas are shut, also not happening. And 1 category which is bothering us is the lifestyle, the apparels and the shoes and the accessories and all that. Since people are working from home or there are no marriages happening, in the quarter 1, especially the April, May, used to be the big wedding season, almost 40% of India's weddings happen in the -- in April, May, June month. And that went into lockdown. So the entire Shaadi shopping went for a toss this year. So that's the concern. But I hope going forward, things should improve. FMCG has improved a bit. So yes, it's a mixed market actually.

And how is the government business coming? Or it remains slower?

It's subdued for us, pretty subdued for us.

Okay. So from 2019 levels, we have not seen any improvement or since even below 2019...

Yes. Government will be slightly below '19.

Thank you. Due to time constraints that was the last question. I would now like to hand the conference over to the management for closing comments.

I thank you for your participation and time on this earnings call. And I hope that we have responded to your queries adequately today. We'll be happy to be of assistance through our Investor Relations Department, headed by head, Mr. Prasoon Pandey for any further inquiries. Take care, everyone, and stay safe. Thank you.

Thank you. On behalf of D.B. Corp limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.