DB Corp Ltd (NSE: DBCORP) Q2 FY23 Earnings Concall dated Oct. 19, 2022
Corporate Participants:
Pawan Agarwal — Deputy Managing Director
Girish Agarwal — Non-Executive Director
Analysts:
Ankit Shah — White Equity — Analyst
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Riya Mehta — Aequitas Investments — Analyst
Analyst — — Analyst
Ravi Goenka — o3 Securities — Analyst
V.P. Rajesh — Banyan Capital Advisors — Analyst
Amit Khetan — Laburnum Capital — Analyst
Pranay Khandelwal — Alpha Invesco — Analyst
Mohan Gulati — Individual Investor — Analyst
Pawan Nahar — Individual Investor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the DB Corp Limited Q2 and H1 FY ’23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
We have with us today the senior management team of DB Corp Limited. Mr. Pawan Agarwal, Deputy Managing Director; Mr. Girish Agarwal, Non-Executive Director; Mr. P G Mishra, Group CFO; Mr. Mushtaq Ali, Vice President; Mr. Lalit Jain, AVP; and Mr. Prasoon Kumar Pandey, Head Investor and Media Relations, who will represent DB Corp Limited on the call. The management will be sharing the key operating and financial highlights for the quarter ended September 30, 2022, followed by a question-and-answer session.
Please note 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 emailed to you and are available on the website of the stock exchanges and the Company’s Investor section. Trust you have been able to go through the same.
I now hand the conference over to Mr. Pawan Agarwal. Thank you, and over to you, sir.
Pawan Agarwal — Deputy Managing Director
Thank you very much, and a very good evening to everyone, and thank you for joining the Q2 FY 2023 DB Corp earnings conference call. We will begin the call by highlighting the key financial performance for the half year and quarter ended September 30, 2022 followed by key operational updates.
The past quarter witnessed robust growth in advertising, but many of the hitherto muted segments like Consumer Durables returning to the fold in a big way. If you recollect, we had indicated that a strong trend of resurgent in print is being witnessed that advertisers, both large and small, are considering print to be a most trustworthy and effective medium for utilizing the advertising expense. As India’s largest print media company, our editorial strength has undoubtedly helped our performance this quarter.
Consolidated half year advertising revenue grew by a strong 51% to INR7,181 million versus INR4,742 million of H1 FY 2022. Circulation revenue recorded a growth of 2% to INR2,312 million, against INR2,265 million of previous year. Total revenue grew by 38% Y-o-Y to INR10,464 million against INR7,592 million. Various cost optimization efforts taken during the year has resulted in 55% growth of EBITDA to INR1,715 million versus INR1,105 of previous year, after considering forex — I’m sorry, after considering forex loss of INR42 million. This is despite substantial increase in the newsprint prices, which are showing softening trend now.
Consolidated PAT for the half year grew by 153% Y-o-Y to INR798 million versus INR315 million in H1 FY 2022, after considering forex loss of INR48 million. In quarter two FY ’23, advertising revenue grew by 26% to INR3,812 million versus INR3,029 million of Q2 FY ’22. Circulation revenues stood flat at INR1,156 million as against INR1,159 million of Q2 FY ’22. Total revenue grew by 21% Y-o-Y to INR5,461 million against INR4,513 million. EBITDA stood at INR977 million versus INR1,054 million after considering forex loss of INR25 million, and despite high newsprint prices and the digital business investment for future growth. This was possible in large measure due to the stringent and long-term cost control measures that continue to serve us well. PAT for the quarter stood at INR488 million versus INR538 million in Q2 FY ’22 considering forex loss of INR26 million.
Moving onto digital business. The company has been steadily growing its loyal monthly active user base across all of its apps with increase of around 8 times from 2 million in January 2020 to more than 15 million in August 2022, which can be attributed to focus on and ensuring high-quality content with the bespoke and highly personalized product experience. This we believe has helped propel Dainik Bhaskar Group and becoming the dominant digital leader with number-one Hindi and Gujarati news app player. With the dominance already established in the print format and now in the digital format we are undoubtedly the number one digital Indian language newspaper in the country.
Coming to the radio division, in Q2 FY ’23, revenue grew by 18% to INR338 million versus INR287 million last year. EBITDA grew by 22% to INR106 million versus INR87 million. EBITDA margin for the quarter stood at 31%. MY FM content continues to connect with audiences and augment listener engagement activities through innovative content creation. This has helped us get better address and we are hopeful of further improving this in the forthcoming quarter.
With this, I would now request Mr.. Girish Agarwal to update us on the operations. Over to you, sir. Thank you, Pawan. Good evening, and thank you, everybody, for joining us. The past six months have been extremely news-heavy with the ongoing geopolitical tension and inflationary pressures that have created quicker than normal responses from government. In India, though the economic revival continues and this quarter aided by the forthcoming festival season has been extremely good. As Pawan stated earlier, we have been able to deliver very robust results, very strong Q-on-Q as well as the Y-o-Y performances across all segments. We are hopeful that as this stage the industry will continue from where it left off in fiscal 2020 before COVID. We continue to roll our initiatives to drive more reader acquisitions, at the same time our editorial strength is being driven through a national campaign called Sachi Vaat Bedhadak. We wish to share some good news about newsprint prices softening, which is very, very important for us. Based on the current domestic and international market visibility and engagements with newsprint suppliers, we believe that the newsprint prices should see a correction of around 12% to 15%, both in India and imported going forward. The impact of the same should be visible from the quarter four of FY ’23 in our numbers. And we expect this to continue as further softening in newsprint and short-to-medium term also. On our financial performance and cost optimization as we have been pointing out over the past few quarters, our singular focus has been to ensure that our various cost-cutting measures are long-lasting. As indicated in our press release while we are working towards increasing our revenue base, we have also managed to save approximately 10% in the operating costs vis-a-vis Q2 of FY 2020, resultantly the print business EBITDA margin of Q2 FY 2023 stood strong at 21% despite the high newsprint prices. This is from — it is all from our side. Ad my colleagues and I would now be happy to respond to your questions, and thank you very much. And before we proceed further, I would like to take this opportunity to wish all of you a very, very happy Diwali going forward. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Ankit Shah from White Equity. Please go ahead.
Ankit Shah — White Equity — Analyst
Thank you for taking my question.
Operator
Sir, your volume is low. Can you speak louder please?
Ankit Shah — White Equity — Analyst
Thank you for taking my question. Sir, can you share the newsprint prices for the quarter?
Pawan Agarwal — Deputy Managing Director
Sure. So, thank you Ankit for this question. I think this is the most opt question in the current call. So let me give you the entire history of last four quarters for the newsprint. If you remember in the financial year ’21-’22 in the Q3, our newsprint prices, the purchase cost for the newsprint was roughly around INR47,000 per tonne which in the Q4, from Q3 to Q4 went up straight away INR53,000 around number per tonne. Then in the quarter one of FY ’22-’23 this number went up straight away to almost INR66,000. And then in Q2 it’s hovering around the same price of 65.5. And as it looks like that from Q4 as I indicated in my speech earlier that we are hoping that around 10% to 15% the prices will go down going forward, we are expecting that from this level of 65,000, 66,000, these prices in the Q4 will go down below 60,000 and furthermore from there on.
Ankit Shah — White Equity — Analyst
All right. And, what would be the newsprint average prices for our numbers?
Pawan Agarwal — Deputy Managing Director
The number as per the consumption if I have to say, it would be in the range of around 64,000, 65,000 total Indian and imported blended.
Ankit Shah — White Equity — Analyst
All right. Sir this is currently — can you share that number for Q2 please?
Pawan Agarwal — Deputy Managing Director
Sorry, come again.
Ankit Shah — White Equity — Analyst
Can you share that number for Q2 please?
Pawan Agarwal — Deputy Managing Director
Yeah, the Q2 number as I mentioned to you that is ranging around 63,000, 64,000 per tonne. This is the as per consumption while the purchase price is slightly higher in the range of around INR1,000, INR2,000 per tonne more, because you buy in a particular month then you consume in the going forward months.
Ankit Shah — White Equity — Analyst
Right, Right. So the lag between our buying and consumption would be one or two months or more?
Pawan Agarwal — Deputy Managing Director
Yeah. I would say roughly around 60 days in case of Indian and imported is slightly more.
Ankit Shah — White Equity — Analyst
All right. Sir, can you share the copies in circulation for the quarter, can you share the numbers for that, please?
Pawan Agarwal — Deputy Managing Director
Yeah. 42 lakh copies.
Ankit Shah — White Equity — Analyst
42 lakh copies. Right. And sir, one is our user — the number of active users on our apps is trending slightly lower over last, let’s say, few months or so. So, how would — how should we read into it? Can you share your perspective on the same please?
Pawan Agarwal — Deputy Managing Director
You’re talking about the app?
Ankit Shah — White Equity — Analyst
Yes, yes. The monthly active users on our apps, Dainik Bhaskar and Divya Bhaskar apps.
Pawan Agarwal — Deputy Managing Director
So, that is not, I mean, we’d love to hear from you which reference are you taking, because what we are looking at is the comp score reference for the app number, that’s the number.
Ankit Shah — White Equity — Analyst
Yeah, yeah. What I’m referring to is a disclosure that we made.
Pawan Agarwal — Deputy Managing Director
From 17 — 16.5 million and 17 million 15 and some million, correct?
Ankit Shah — White Equity — Analyst
Yes, yes. It’s a minor one, but just that it’s been a few months, so just to get your perspective on the same.
Pawan Agarwal — Deputy Managing Director
Yeah, see from our perspective, the retention and the new users coming in and the [Indecipherable] is almost there. Now this difference is pretty minor, we are evaluating it to market-to-market. Some exact reason cannot be said, identified for this, but we are hoping that in the going forward months we should be able to get not only regain that 1 million what we lost and furthermore, but at the same time if you look at the market, I think though I should not be comparing this but other news apps, they have seen huge decline in terms of their retention. So, I think from that perspective we are in a pretty good situation.
Ankit Shah — White Equity — Analyst
Right, sir. Sir, one question was on Dailyhunt. So, would you consider Dailyhunt as a more formidable competitor for our news apps compared to the others? I mean, particularly because we are ahead of others by quite a distance, but just one ad which could be better than us. And also, how would our numbers compare to Dailyhunt Hindi user base? Just in case you can share some perspective on this aspect.
Pawan Agarwal — Deputy Managing Director
Frankly speaking, we don’t really compare ourselves with news, because there are news aggregator. They are an apps true, but they are not a direct comparison, because they are not curating or correcting any kind of content, they are simply curate aggregators. So, we really don’t compare ourselves with them and also the time spent and all is much, much different. I think, we’ll be happy to take this call offline with you to give you much more details on that.
Ankit Shah — White Equity — Analyst
Sure, sir.
Pawan Agarwal — Deputy Managing Director
Thank you.
Ankit Shah — White Equity — Analyst
Yes. And sir just the last one. Can you share the other expenses trajectory for next, let’s say, two quarters? How would the other expenses pan out over the next two quarters?
Pawan Agarwal — Deputy Managing Director
So, if you see in this quarter, the other expenses have gone up by 12.5% compared to last year, which is around INR15 crores. If I give you a breakup of the INR15 crores is the forex loss and balanced large money has gone in terms of the quantity and the increased price of the production process, which is ink, plate and all that. So if, I assume that going forward these prices stays there or goes down, so I don’t see any reason why the operational cost going forward should increase, except the number of pages goes up, the production costs go down.
Ankit Shah — White Equity — Analyst
Okay. That’s it from my end. If I have more questions, I’ll join back the queue. Thank you.
Operator
Thank you. We have our next question from the line of Bhagyesh Kagalkar from HDFC Mutual Fund. Please go ahead.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Yeah. Thanks and congratulations on good set of numbers, as well as the information later on issued, posted also is quite comprehensive. So, just coming to the Page 17 of your press release, strategic areas of focus and key updates, digital strategy. Sir, just one query here, you have mentioned that your strong talent pool continue to focus on technology as well as new areas like revenues. The key issue here is at least from what I gather from lot of media companies essentially that it is quite challenging to hold-on to talent pool in this, because this is sort of IT technology related area. So what is your view on this, sir, essentially? Because this is going to be the most critical area for us for next at least three years to evolve into a digital company.
Pawan Agarwal — Deputy Managing Director
Very opt question on this, I think company is taking all the possible measures to ensure that we create a great place for people to operate work in this company. They should have the creative freedom, they should have the joy of creating something, working on something. And apart from that also we have issued piece of benefit to a lot of key positions in print and digital both. So, I think that is also helping us to make sure that our talent space with us.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Thanks for the answer sir, and Happy Diwali to all of you, sir.
Pawan Agarwal — Deputy Managing Director
Thank you, sir. Happy Diwali to you also.
Operator
We have our next question from the line of Riya from Aequitas Investments. Please go ahead.
Riya Mehta — Aequitas Investments — Analyst
Hello, sir. Yeah. Congrats on great set of advertisement number.
Pawan Agarwal — Deputy Managing Director
Thank you, madam.
Riya Mehta — Aequitas Investments — Analyst
Like we used to see pre-pandemic level auto used to form almost INR100-odd crores for us for advertisement and government also is perform a big buy. So, what kind of auto advertisement did we see this quarter and do we see anything moving forward since auto is reviving and there are lot of new EV products which is coming by. So how do we see that?
Pawan Agarwal — Deputy Managing Director
I’m very thankful to you for this question, because you’re comparing us on ’19-’20 which is a pre-COVID year. In fact in our internal all the workings we discuss about pre-COVID only, because last two years, number were down and the growth percentile looks much higher, but we actually have to see how we are able to do better than pre-COVID.
So, let me give you the perspective of all the other categories. In terms of education from the pre-COVID if I have to compare the Q2 then we are on a growth. Strong double-digit growth I would say. In terms of government advertising we are on a decline. In response category, classifieds, we are on a growth, double-digit growth. In real estate, again a very strong double-digit growth. Automobile is one area we are down by 50% almost from the pre-COVID level, because in last two years’ time if you notice all the automobile companies are facing the supply issues and hence they are not coming up new launches, so this is one category which has declined by almost 50% on a pre-COVID numbers.
In FMCG, also there is a — there was a decline of around 15% to 18% actually in FMCG pre-COVID and I’m giving you all these number pre-COVID. While if you look at the jewelry, again a very strong, almost 100% growth in jewelry category from the pre-COVID level, hospitals, clinics, healthcare they all are growing. Lifestyle is another category which is at a 20% decline, 24% decline to be precise on a pre-COVID number. So now what we are working in the market that once the automobile issues are sorted out for the supply, this decline should turn into the growth, so that will be a big upside for us as well as the lifestyle category which is largely considering about the apparels that need to come back in terms of sales and advertising. I hope that answer your question.
Riya Mehta — Aequitas Investments — Analyst
Yeah. So, I was actually asking from the EV point of view that are we seeing any aisles, because lot of companies are coming with new launches in auto. So, in Q3 do we see like on this because of Diwali and [Indecipherable] and all?
Pawan Agarwal — Deputy Managing Director
Yeah, there is some kind of — some advertising coming from EV, but suddenly it is not taking care of those double spread and full pages and jackets of our four wheelers. So let’s hope they get their issues sorted out fast and come back to the market with us.
Riya Mehta — Aequitas Investments — Analyst
And out of all these categories, what was the highest margin accretive category for us?
Pawan Agarwal — Deputy Managing Director
Margin, when you say, acronyms in the margin?
Riya Mehta — Aequitas Investments — Analyst
Yields like, advertisement yields.
Pawan Agarwal — Deputy Managing Director
Yield. I think they all are same, education and real estate and automobile, I would say, real estate, education would — and jewelry would have a higher yield, because they all are the front page advertising.
Riya Mehta — Aequitas Investments — Analyst
Okay. And what are the cover prices right now? Have we taken any hikes or planning any hikes?
Pawan Agarwal — Deputy Managing Director
So, our cover price for this quarter is INR4.77 that is increase of around 3% over the last year.
Riya Mehta — Aequitas Investments — Analyst
Okay. And are we planning any increase for the two [Indecipherable] increase?
Pawan Agarwal — Deputy Managing Director
I don’t think. The newsprint prices are going to go down furthermore in the next quarter. So we should not be increasing any price.
Riya Mehta — Aequitas Investments — Analyst
Okay. And Q3 basically, we will see some demand coming from Diwali and e-comm players, how does the advertisement for the October month so far?
Pawan Agarwal — Deputy Managing Director
So, we are sitting at a decent double-digit growth I would say for the festival and the market is looking very [Technical Issues]. So we are hopeful that we should continue this double-digit growth.
Riya Mehta — Aequitas Investments — Analyst
This is pre-pandemic levels?
Pawan Agarwal — Deputy Managing Director
Yes, we compare ourselves in pre-pandemic only in our internal working.
Riya Mehta — Aequitas Investments — Analyst
Okay, okay. So, October, we are still — in the last 19 days you’re seeing double-digit growth?
Pawan Agarwal — Deputy Managing Director
Yeah, yeah. Even September was good.
Riya Mehta — Aequitas Investments — Analyst
Okay. And from the digital space, so actually what I was aware is that we give numbers for the app basically and I just went through the comps or subscription and I prefer that this is something called website numbers also and the total unique visitors per our nearest competitor or the regional players like [Indecipherable] and all is around 1 lakh and we are sitting at around 50,000. So what — how would you justify this or what would your inputs for this? So, basically this is total Internet audience, which usually comes from website.
Pawan Agarwal — Deputy Managing Director
So, we don’t look at the numbers coming from the total Internet audiences, because for most of the publishers’ challenge as we’ve been saying in the past is those numbers come from aggregator from people like Dailyhunt, from Facebook, from Search, from random websites, from people who pickup up your headline pasted on the website. So, these are not your users. They come from — they come once in a month, maybe once in a six month, but they show-up in a number. And, those are not the numbers which can be monetized for significant advertising, because those users you can target easily on those platforms itself for advertising and subscription of course, these numbers don’t matter at all. [Speaker Overlap]
Riya Mehta — Aequitas Investments — Analyst
[Speaker Overlap] and all, I think they’ve already monetized their digital and they’re doing quite good. So despite not having good app base numbers and just having internet base numbers, so what are [Speaker Overlap] —
Pawan Agarwal — Deputy Managing Director
So, our focus is all about the app. So, that’s the reason we don’t notice in last many years, we don’t even discuss about our web numbers. Because app is the one where I have a relationship with a person, he downloads my app, looked — look up the app every day, alternate day, and I have a ongoing relationship with him. So we really don’t consider web, we are looking at app and the app number are in front of you and we are — we have a long way to go for that I would say.
Riya Mehta — Aequitas Investments — Analyst
So, our focus would continue to be on the app and not on the web base is what I understand.
Pawan Agarwal — Deputy Managing Director
Without a doubt.
Riya Mehta — Aequitas Investments — Analyst
Okay. And what would be — so I was just checking out a webpage, so we have something called premium plans, so have we started monetizing or how is it?
Pawan Agarwal — Deputy Managing Director
Yeah. We are working on some experiments right now and it looks like that you’ve been one of those part of my experiment. Otherwise you would have not come to know about the premium ones. So we are doing some experiments at a select audience. And hopefully in next two, three quarters we should have some results to come and disclose it to you.
Riya Mehta — Aequitas Investments — Analyst
So, we started monetizing the subscription is that what?
Pawan Agarwal — Deputy Managing Director
No, we have not started monetizing, we’ve started experimenting.
Riya Mehta — Aequitas Investments — Analyst
Okay. So basically only for select geographies you’ve started?
Pawan Agarwal — Deputy Managing Director
Something like that.
Riya Mehta — Aequitas Investments — Analyst
Okay. Okay. And we would want — this kind of plan would be there for the overall geographies.
Pawan Agarwal — Deputy Managing Director
Something like that.
Riya Mehta — Aequitas Investments — Analyst
This is a kind of range. And I was just going to the annual report, there were some whistleblower issues. So could you elaborate on that?
Pawan Agarwal — Deputy Managing Director
Could you —
Operator
Ms. Riya, I request you to come back in the queue.
Riya Mehta — Aequitas Investments — Analyst
Yeah.
Operator
Thank you. We have our next question from the line of DHarmesh Sanghvi D S Associate[Phonetic]. Please go ahead.
Pawan Agarwal — Deputy Managing Director
But, one second, I think Ms. Riya raised a question about the whistleblower mechanism. I would like to answer that. If Ms. come back, please explain me that question. I would like to answer that. Yeah, we can take the next question in the meantime.
Operator
Yes. Mr. Sanghvi please go ahead.
Analyst — — Analyst
Sure. Good evening.
Pawan Agarwal — Deputy Managing Director
Yes Mr. Sanghvi.
Analyst — — Analyst
Hello. Yeah, so my first question is with regards to the radio, we can see that the advertising revenue has grown by 18% over previous year. So, could you just tell us how the sectors are contributing?
Pawan Agarwal — Deputy Managing Director
Sorry, can you repeat that. I missed the last point.
Analyst — — Analyst
So, can you help us with the sectors that are contributing to this 18% growth over the previous year?
Pawan Agarwal — Deputy Managing Director
So, we had a low base last year. Again we don’t look at last year’s base, we look at ’19-’20 base. And on a ’19-’20 base, compared to last year we grew by 17%, no, no, ’19-’20 base we have grown by about 6%. So we look at ’19-’20 as a base for all revenue growth internally.
Analyst — — Analyst
Okay. Now my second question is with regards to the print business —
Pawan Agarwal — Deputy Managing Director
Sir, your voice is slightly echoing, we are not able to hear that properly.
Analyst — — Analyst
Am I audible now?
Operator
Could you please use your handset?
Analyst — — Analyst
Sure. Is it better now?
Pawan Agarwal — Deputy Managing Director
Yes.
Analyst — — Analyst
Okay. So, now the next question is with regards to the print business. We can see that the ad revenues of print business, and that business has surpassed Q2 FY ’20 levels, so what has contributed to it? And also there has been no mention of it anyway in the results.
Pawan Agarwal — Deputy Managing Director
So, the education category is growing, response category is growing, real estate is booming, jewelry is at huge 100%, almost 100% growth, healthcare hospitals are growing. Except automobile, FMCG and lifestyle every other categories contributing in the growth.
Analyst — — Analyst
Okay. But, I mean what has contributed, I mean is it because print is something that we’ve grown or is it the other businesses that have grown?
Pawan Agarwal — Deputy Managing Director
Sorry, sir, your voice is echoing. What exactly you’re saying.
Analyst — — Analyst
I’m saying this print and allied business, we can see that as mentioned that INR348 crores for the current quarter, and being with that surpassed weak surpassed quarter two FY ’20, all right, I mean what has contributed, not the vertical, but which business has contributed? Have we done well in print?
Pawan Agarwal — Deputy Managing Director
The newspaper is growing as well as the radio, both are growing sir.
Analyst — — Analyst
Okay. No, no, my question with regard to the print and other business advertisement. Is it — because we are earning more in digital now?
Pawan Agarwal — Deputy Managing Director
No, no. Digital, we don’t have any revenue, because we don’t take much advertising on digital. Entire growth is coming from print and radio and other businesses are very minor businesses, which is some printing jobs and all that.
Analyst — — Analyst
Okay, okay. Also one last thing, could you please help us with the print, we believe the margin was said earlier, 21%, but what is the exact number if you can have it, because this month we’ve not — this time we have not mentioned it anyway in the results.
Pawan Agarwal — Deputy Managing Director
So, EBITDA margin on the consol level this quarter is at 18%.
Analyst — — Analyst
Correct.
Pawan Agarwal — Deputy Managing Director
And the print I think is at 21%, almost same, sir.
Analyst — — Analyst
21%. Okay.
Pawan Agarwal — Deputy Managing Director
Instead of 18%, print margin is 21% and the consol margin is 18% percent.
Analyst — — Analyst
That’s right. Okay, okay. Got it, all right. Thank you.
Operator
Thank you. We have a question from Ms. Riya from Aequitas Investments. Please go ahead.
Pawan Agarwal — Deputy Managing Director
Yes, Ms. Riya, you were talking about some whistleblower in the number.
Riya Mehta — Aequitas Investments — Analyst
Yeah. Annual report. So, basically that was a mention that there was some whistleblower complaints during the year, so if you could just elaborate that what is it about?
Pawan Agarwal — Deputy Managing Director
Yes. Sure. So what happened we have a strong whistleblower mechanism in our system, where people can let us know if they find, if they feel anything going wrong and anywhere, and we keep getting these complaints from the whistleblower, we have a proper committee, proper team those who look into each and every such complaints. And once the complaint is found substantial our team goes to the ground because we are spread in 12 states in India, new geography, and they go and investigate and find out. So these complaints pertains to some misbehavior by any team members or it could be by somebody trying to give the wrong numbers to any particular clients.
So, for example, if a client say I booked advertisement for x rupees, while I came to know I should have been given this benefit which I not been given. So, I will do know whether that benefit is being passed on by the company properly or not. So all these kind of complaints, some internal issues also come in that whistleblower, so we have proper team who investigate and it does help us a lot to keep check in the entire system.
Riya Mehta — Aequitas Investments — Analyst
Okay. Is there any place where we can actually read about these what all issues are there?
Pawan Agarwal — Deputy Managing Director
These are more internal thing, which has been brought out to our notice and if there are any issues which are confirming the SEBI guidelines then suddenly we publish that in the annual report.
Riya Mehta — Aequitas Investments — Analyst
Okay. And my second question would be in regards to the receivables. So we have huge receivable on our books, so where is this coming from?
Pawan Agarwal — Deputy Managing Director
These — as you know in our system, we allow a 60 to 90 days credit to the ad agency, those will give the regular business to us, and for the government generally it goes on two couple of years also. For example the State Government of Madhya Pradesh, Rajasthan, Bihar, central government and all that, they don’t make payment on time. So, we allow them certain time and as per the audit procedures we also do the scrutiny and provide for them if at all the payment is in a particular age. So I think all that norms are really followed very rigorously.
Riya Mehta — Aequitas Investments — Analyst
Okay. And for the government ad revenue, what kind of ad revenue would be there from government for this quarter?
Pawan Agarwal — Deputy Managing Director
So, this quarter government ad revenue is, one second, is roughly around, yeah, around INR60 crore is the total advertising from the government, which includes the state government, local government, panchayat and everything in everything. And going forward this number will further improve because now in most of these states the government visibility is good.
Riya Mehta — Aequitas Investments — Analyst
Okay, okay. So, are we planning this to go back to the pre whatever we used to have before, almost INR80 crores, INR100 crores, am I right?
Pawan Agarwal — Deputy Managing Director
Yeah. Actually speaking, we don’t put any target on the government advertising number, because you can’t go and convince the government to advertise, because they are not a response-driven advertising. So we cannot put a target on the government. It all depends on their policies, what do they want to inform to their readers and all that, to our readers, so that’s the reason we don’t have any drive for asking government to advertise more. Whatever they feel is write for their purpose, we can’t do that.
Riya Mehta — Aequitas Investments — Analyst
Right, right. My second question would be on regards to the expenses. So, basically as you said that in versus Q2 FY ’20, we stay at around 10% of operating expenses. So, do we see this to sustain or just to come back a little on in Q3, Q4 basis?
Pawan Agarwal — Deputy Managing Director
So, our expenses are under control, only the number goes up and down depending on the number of pages of the production and the total copies to be printed or if the prices of those item goes up in the market.
Riya Mehta — Aequitas Investments — Analyst
Okay. So basically are tracking the newspaper cost, it had reached up to 70,000, 75,000 so do we see that kind of numbers coming in Q3 for us?
Pawan Agarwal — Deputy Managing Director
I think you missed out that answer, which I gave a lengthy answer to the gentlemen who asked the question, I gave out every quarter prices to him and how it’s been going down and going forward we are expecting correction of around 10% to 15% in the Q4 onwards.
Riya Mehta — Aequitas Investments — Analyst
Yeah. In Q3, I think we would have high-cost inventory of around 70,000.
Pawan Agarwal — Deputy Managing Director
Q3 would be the same as Q2 I would say. Thank you, madam.
Riya Mehta — Aequitas Investments — Analyst
Thank you. I’ll get back into queue.
Operator
Ms. Riya, please get back in the queue. Thank you. We have our next question from the line of V.P. Rajesh – Banyan Capital Advisors. Please go ahead. Mr. Rajesh please unmute your line. There is no response from, Mr. Rajesh line. [Operator Instructions] We have a question from the line of Pranav Shenoy from o3 Securities. Please go ahead. We have a question from the line of Madura Nancy from o3 Securities. [Technical Issues] Sorry. We have a question from the line of Ravi Goenka from o3 Securities. Please go ahead.
Ravi Goenka — o3 Securities — Analyst
Hi. Thank you for the opportunity sir. My first question is, we are building a product for which we won consumer to pay especially in digital, we have reached this over the last three years, what impact have we got about the consumer and how has the product evolved?
Pawan Agarwal — Deputy Managing Director
I think in last three years product has evolved in a big way, and the numbers are there to show that from a major base of couple of lakhs, today we are at 15 million in three years’ time that are 8 times growth. So I think that clearly indicates that our experiments with the product and the traction from the consumer is fantastic.
Ravi Goenka — o3 Securities — Analyst
Okay. And we said last year around 19 crores and 5 crores to business share of digital, was there some one-off and can you tell have we reached the peak of investment in the digital space and what would be the expense per year in digital business?
Pawan Agarwal — Deputy Managing Director
So, sir, if you remember couple of quarters back, I took the permission from all of you that allow us not to disclose any specific number on digital to looking at the competition around and at the appropriate time, we’ll come back to you with the details. So, may I request the same — this time also repeat that.
Ravi Goenka — o3 Securities — Analyst
Okay. Okay, sir. And we have seen some players come up with good content, but paid like print etc., but had not able to get lot of paid subscription, what are the learnings from that and what changes are we bringing?
Pawan Agarwal — Deputy Managing Director
Sir, we have not yet started the paid excise, so it will not be right to say that we have not got successful in the paid. Right now the app is free, people are using it, we have got the huge response, number of people using it and the time they give it to us. And going-forward this is further going to grow and we are looking at monetization going-forward.
Ravi Goenka — o3 Securities — Analyst
Okay. And my last question is in terms of our digital customer, can you be exact on the mean and median age profile, education level, gender and location and etc., what are their expectation from the product?
Pawan Agarwal — Deputy Managing Director
As I requested you sir that all this information we are not disclosing right now because of the competition. Allow us some time for the appropriate working and come back to you.
Ravi Goenka — o3 Securities — Analyst
Okay. I will join in the queue.
Operator
Thank you. [Operator Instructions] We have a question from the line of V.P. Rajesh from Banyan Capital Advisors. Please go ahead.
V.P. Rajesh — Banyan Capital Advisors — Analyst
Hello and congratulations for good set of numbers given.
Pawan Agarwal — Deputy Managing Director
Thank you.
V.P. Rajesh — Banyan Capital Advisors — Analyst
I have a question regarding the trade-off between the volume and pricing, both on the print and radio terms, so how has been the progress compared to the previous quarters, quarter-over-quarter on the pricing side and on the volume side also as compared to the pre-pandemic level?
Pawan Agarwal — Deputy Managing Director
Sir, right now the entire focus is to grow the volume and that’s the reason our volume is slightly higher than the pre-pandemic level now. So that is a positive indication and that is the number we’re showing in growth also. As far as the yield is concerned, we have taken yield up in certain categories, but nothing worthwhile to really mention, but one yield improvement has happened that people those who used to advertise inside pages we have been able to motivate them to come on to the front page and jacket and all that, and that’s how the yield has further improved on that. And I guess the same remains with radio that they are also filling in the quantum right now. So that they’re able to do per quantum and at the same time radio, because the quantum is limited, so they are also working on the yield improvement there.
V.P. Rajesh — Banyan Capital Advisors — Analyst
Okay. So when you that volume is higher than the pre-pandemic levels, what — I mean, does the pagination has improved than — as compared to pre-COVID levels, does that growing that?
Pawan Agarwal — Deputy Managing Director
If I see the same pagination of pre-COVID level then my volume is up by around 3%.
V.P. Rajesh — Banyan Capital Advisors — Analyst
So, basically the news content is lower and the ad volume is higher, because the number of pages remain the same.
Pawan Agarwal — Deputy Managing Director
If you look at the number of centimeter published by me in terms of advertisement pre-COVID and this time, we see there is a 3% growth on that.
V.P. Rajesh — Banyan Capital Advisors — Analyst
Understood, Understood. And on the one more thing, regarding the government rates on advertisement, are you — is there any thought process on increase in the rates on the government ads, because I think two years now government hasn’t increased rate, but anything due on various state governments?
Pawan Agarwal — Deputy Managing Director
We have a body called Indian Newspaper Society, which represent all the interest of all the newspaper organization in the country with the various governments. They’ve been pursuing the government for the rate increase. Unfortunately, till now, we have not got any years from the government on that but I’m sure going forward the government will certainly consider the plight of the industry and give us some relief on the advertising rate.
V.P. Rajesh — Banyan Capital Advisors — Analyst
Fair enough. And then my last question is on the most recent —
Operator
Mr. Rajesh, can you please come back in the queue.
V.P. Rajesh — Banyan Capital Advisors — Analyst
Just one question if I can slip in. On the radio business, policy decisions that government introduced couple of days ago, are you guys thinking about M&A when the 15% cap has been removed?
Pawan Agarwal — Deputy Managing Director
Sir, we cannot really comment on behalf of the government. Once they decide something it will be out in public for all of us.
V.P. Rajesh — Banyan Capital Advisors — Analyst
It’s already being done by the cabinet.
Girish Agarwal — Non-Executive Director
That has been something out sir, we are evaluating it, nothing concrete yet, but certainly I mean as we have maintained in the past we have — we don’t want to go to metro stations, our expense and our profitability is primarily driven from the fact that we are in Tier 2, Tier 3 markets.
V.P. Rajesh — Banyan Capital Advisors — Analyst
That’s helpful. Thank you, sir.
Operator
Thank you. We have our next question from the line of Amit Khetan from Laburnum Capital. Please go ahead.
Amit Khetan — Laburnum Capital — Analyst
Hi, thank you for the opportunity. Just one question from my side. So you mentioned that government revenues visibility is good. And we faced some challenges over the last two years with regard to government advertising. So is it fair to assume that those issues have been resolved?
Pawan Agarwal — Deputy Managing Director
Yes, looks like.
Amit Khetan — Laburnum Capital — Analyst
Got it. Got it. And relative to pre-COVID levels where would government revenues be today?
Pawan Agarwal — Deputy Managing Director
Slightly down, but hopefully going forward should show some improvement.
Amit Khetan — Laburnum Capital — Analyst
Understood. Thank you.
Pawan Agarwal — Deputy Managing Director
Thank you.
Operator
Thank you. We have our next question from the line of Pranay Khandelwal from Alpha Invesco. Please go ahead.
Pranay Khandelwal — Alpha Invesco — Analyst
Hello, sir.
Pawan Agarwal — Deputy Managing Director
Yes, sir.
Pranay Khandelwal — Alpha Invesco — Analyst
I wanted to ask if we are planning to launch an English edition of our newspaper or something like that.
Pawan Agarwal — Deputy Managing Director
No, sir. We have no plan to launch any new language, now.
Pranay Khandelwal — Alpha Invesco — Analyst
Okay. That’s helpful. Thank you.
Operator
Thank you. We have our next question from the line of Mohan Gulati, an Individual Investor. Please go ahead.
Mohan Gulati — Individual Investor — Analyst
Hello. Congrats on the good set of numbers, sir, both.
Pawan Agarwal — Deputy Managing Director
Thank you, sir.
Mohan Gulati — Individual Investor — Analyst
I’m just trying to check what is the monetization plan of the digital, not only from a subscription standpoint, but also from an advertisement standpoint on the app?
Pawan Agarwal — Deputy Managing Director
So, on the app, advertising we want to hold for a while, idea is to give amazing experience to a reader. Because we have been hearing from lot of readers that when they open up any app the ad become very intrusive, they are on your face, and you don’t like that. We want to create a great experience for the reader, that’s the reason we are not — we have not opened up the advertising on the app. And as for the subscription is concerned, we are working on it. Doing some experiments here and there and going forward we should have some news for you on that.
Mohan Gulati — Individual Investor — Analyst
So, can we assume safely six months to one year?
Pawan Agarwal — Deputy Managing Director
I’m sure, something will happen in six months we will update you on that.
Mohan Gulati — Individual Investor — Analyst
Okay. Sir, one last question before I conclude. So there is a case related to the Competition Commission of India agonist Google related so sharing the revenues to the news providers.
Pawan Agarwal — Deputy Managing Director
Yes, sir.
Mohan Gulati — Individual Investor — Analyst
Do we have any update? Unfortunately, I know it’s not exact question related to the organization, but in general.
Pawan Agarwal — Deputy Managing Director
No, no. I should answer you that. So, the Digital Newspaper Associations and as well as Indian Newspaper Society have filed a complaint against Google with the Competition Commission of India and Competition Commission of India has recently merged all these complaints into one, because there were two, three such complaints against Google. And they are investigating the entire thing and I’m sure soon they will come out with some kind of findings and a relief for all of us.
Mohan Gulati — Individual Investor — Analyst
There are revenue sharing — there is only revenue sharing in Europe if I’m not wrong.
Pawan Agarwal — Deputy Managing Director
Yes, sir.
Mohan Gulati — Individual Investor — Analyst
Okay. All the very best. Happy Diwali.
Pawan Agarwal — Deputy Managing Director
Thank you, sir, and Happy Diwali.
Mohan Gulati — Individual Investor — Analyst
Happy Diwali. Yeah, same to you, sir.
Operator
Thank you. We have our next question from the line of Pawan Nahar, an Individual Investor. Please go-ahead.
Pawan Nahar — Individual Investor — Analyst
Hi, gentlemen. Thank you so much. First I wanted to ask you how much is the net cash on our balance sheet as of now?
Pawan Agarwal — Deputy Managing Director
Roughly around INR470 crore is the net cash and bank balance in the books. And no debt.
Pawan Nahar — Individual Investor — Analyst
Sorry.
Pawan Agarwal — Deputy Managing Director
Zero debt, no debt.
Girish Agarwal — Non-Executive Director
Zero debt. INR470 crore in cash.
Pawan Nahar — Individual Investor — Analyst
Then second, I’m looking at the balance sheet, we’ve got the rights of huge assets of round figure INR430 crore. Now, against this, I mean basically this capitalizing of rental, annual rentals.
Pawan Agarwal — Deputy Managing Director
Yes, sir.
Pawan Nahar — Individual Investor — Analyst
So, what is the annual rental we have?
Pawan Agarwal — Deputy Managing Director
Can we come back to you sir on this. We don’t have exact number on the table right now with us.
Pawan Nahar — Individual Investor — Analyst
Okay. So should I expect a call or email on this?
Pawan Agarwal — Deputy Managing Director
Sir, Prasoon Pandey from our Investor Relationship will get in touch with you, sir.
Pawan Nahar — Individual Investor — Analyst
Second — okay thank you. Third, I wanted to ask you made a comment that by Q4 you see the newsprint prices coming down by 10% to 12%.
Pawan Agarwal — Deputy Managing Director
Yes, sir.
Pawan Nahar — Individual Investor — Analyst
Right. I really wish that happen sooner. And what gives you the confidence? Have you start any deals that are — what gives you that confidence this is coming now?
Pawan Agarwal — Deputy Managing Director
I think you are bang on, we’ve been talking to the people on a practically every day basis, our procurement team does it day-in and day-out on this. And based on our discussions, based on our negotiations happening with them that’s the confidence we have got.
Pawan Nahar — Individual Investor — Analyst
Got it. Great. And you said that government advertisement is back across the board center, all state?
Girish Agarwal — Non-Executive Director
Yes, sir, largely.
Pawan Nahar — Individual Investor — Analyst
Largely. Or there are still pockets where we are not — we are having an issue?
Pawan Agarwal — Deputy Managing Director
Largely it has come back, but see it’s difficult to predict about any particular government on a particular market.
Pawan Nahar — Individual Investor — Analyst
Yeah. But then those past issues are resolved where it was [Speaker Overlap]
Pawan Agarwal — Deputy Managing Director
Largely resolved. I’m saying how the governments are, so one should always take things with the pinch of salt.
Pawan Nahar — Individual Investor — Analyst
Fair point. And one last question from me, you had a great December ’19, okay, I mean, pre-COVID INR600 crores revenues. Now do you see us growing double digit on that number?
Pawan Agarwal — Deputy Managing Director
Sir, right now we are focused on the —
Pawan Nahar — Individual Investor — Analyst
You’ve done flight versus September ’19 or the marginal 1% growth, so and you said that the festival season has been good, September was good. So I’m just asking, do you see —
Pawan Agarwal — Deputy Managing Director
Our efforts are certainly on that and we are pretty confident that we should be able to achieve the expectations of our stakeholders, but having said that there are multiple issues in the market. As of now, the festival season is good. I hope it should continue going-forward. Let’s, see how it goes sir.
Pawan Nahar — Individual Investor — Analyst
Thank you so much and I really hope you continue the strength of reporting the within three weeks of the quarter, this is amazing. Thank you, sir.
Pawan Agarwal — Deputy Managing Director
Thank you, sir. I appreciate your confidence.
Operator
Thank you. We have our next question from the line of Dharmesh Sanghvi from D S Associates. Please go ahead.
Analyst — — Analyst
Yeah. Sir, thank you for giving the opportunity again and the follow-up on the previous question. Sir, on the circulation copy, we had a peak copy of 56 lakh and now we are at 43 lakh, so we are at 75% roughly. So, any chances of these copies now going up or this is now the established way.
Pawan Agarwal — Deputy Managing Director
I would say, sir, that 56 lakh copies base we’ve been also evaluating that. We ran a major scheme just before that. So, I think we got big because of that. Suddenly we lost some copies because of COVID, also in last one year’s time we have increased the cover price, in last two years’ time we’ve increased the cover price also. And so I think considering all this are we happy with the current number? We are not. But ideas that how fast and how far we can reach that’s the whole thing we are working on. So, let’s see. We are for example at 42 lakh, 43 lakh copies, idea is that how can we pass the 45 lakh benchmark and then go on from there.
Analyst — — Analyst
Right. But on similar terms, your ad revenue has crossed the pre-COVID, 104% you mentioned, so that is on back of volumes coming back or pricing also improves?
Pawan Agarwal — Deputy Managing Director
Largely volume.
Analyst — — Analyst
Or you have been saying that print induce digital also revenue.
Pawan Agarwal — Deputy Managing Director
We don’t say digital advertising, so it largely on the volume, sir.
Analyst — — Analyst
It’s all on the volume. And do you expect the same trend to continue?
Pawan Agarwal — Deputy Managing Director
Yes, sir. That’s what the team is working on.
Analyst — — Analyst
Okay. Thank you. Thank you very much, sir.
Operator
Thank you. Ladies and gentlemen, due to time constraints that was the last question. I now hand the conference over to the management for closing comments. Over to you, sir.
Pawan Agarwal — Deputy Managing Director
Thank you everyone for your participation and time on this earnings call today. I hope we responded to your queries that were raised today and will always be happy to be of assistance through our Investor Relation department headed by Mr. Prasoon Kumar Pandey for all your further queries. Take care everyone and stay safe. We wish all of you a very, very Happy Diwali and a prosperous New Year. Thank you and have a great evening.
Girish Agarwal — Non-Executive Director
Happy Diwali to everybody. Thank you. [Operator Closing Remarks]