DB Corp Ltd (NSE:DBCORP) Q4 FY23 Earnings Concall dated May. 19, 2023.
Corporate Participants:
Pawan Agarwal — Deputy Managing Director
Girish Agarwal — Non Executive Director
Analysts:
Rushabh Shah — o3 PMS — Analyst
Amit Khetan — Laburnum Capital — Analyst
Pradyumna Choudhary — JM Financial Ltd — Analyst
Naman Dhanuka — — Analyst
Riya Mehta — Aequitas Investment Consultancy — Analyst
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Yash Rangaswamy — JP Associates — Analyst
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Ankit Shah — White Equity Investment Advisor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the DB Corp Ltd. Q4 and FY ‘2023 Earnings Conference Call. [Operator Instructions]
We have with us today the senior management team of DB Corp Ltd., Mr. Pawan Agarwal, Deputy Managing Director; Mr. Girish Agarwal, Non-Executive Director; Lalit Jain, Chief Financial Officer; Mushtaq Ali, Vice President, Finance and Account; and Mr. Prasoon Kumar Pandey, Head – Investor and Media Relations, who will represent DB Corp Ltd. on the call.
The management will be sharing the key operating and financial highlights for the quarter ended March 31, 2023, followed by 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 exchange 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. Mr. Pawan Agarwal, your line is unmuted. You can please go ahead.
Pawan Agarwal — Deputy Managing Director
Thank you very much, everyone, and a very good evening to everyone and thank you for joining the Q4 FY 2023 DB Corp earnings conference call. We will begin the call by highlighting the key financial performance for the full year and quarter ended March 31, 2022, followed by key operational updates. We concluded fiscal 2023 on an optimistic note with strong results on the back of growth in ad revenues across all major markets and circulation. Our print advertising for fiscal FY ’23 grew by strong 27% YoY, print advertising grew strong 16% YoY in quarter 4 FY ’23. Our consol EBITDA grew by impressive 34% YoY and in quarter 4 FY ’23 to INR889 million, with margin expanded by 250 basis ones despite high newsprint prices.
We’ve been highlighting over the past few quarters on the strong revival of traditional media and this quarter once again demonstrated print media as the most credible source amongst advertisers, resulting in strong growth in advertising revenues across categories. Traditional advertisers, such as real estate, education, whitegoods, and jewelry, etc., continue to use print as their preferred medium, and the auto segment has started to see some movement.
The Audit Bureau of Circulation Survey for July 2022 to December 2022 continues to position Dainik Bhaskar Group as the largest circulated newspaper group in India, as well as placing Dainik Bhaskar in the top position as the largest circulated newspaper in India with a very wide gap with number two print player. Consolidated full year advertising revenue grew by a strong 25.4% to INR14,827 million versus INR11,827 million of FY 2022. Circulation revenue recorded a growth of 1.5% to INR4,627 million against INR4,558 million of previous year. Total revenue grew by 21.2% YoY to INR21,682 million as against INR17,885 million. EBITDA grew by 12% to INR3,611 million as against INR3,228 million after considering forex loss of INR52 million, aided by stringent cost control measures and despite high newsprint prices.
Consolidated PAT for the full year grew by 19% to INR1,691 million versus INR1,426 million in FY 2022, after considering forex loss of INR60 million. In quarter four FY 2023, advertising revenues grew by 14.2% YoY to INR3,578 million versus INR3,134 million of Q4 FY 2022 on the back of increased ad spends by traditional sectors as well as new age sectors. Circulation revenue remained flat at INR1,153 million as against INR1,152 million of Q4 FY 2022. However, it may be noted that our circulation teams are making strong progress through several campaigns aimed at our trade partners as well as our readers.
Total revenues grew by 13.5% YoY to INR5,446 million as against INR4,799 million in Q4 FY ’22. EBITDA grew by 34% YoY to INR889 million versus INR663 million with EBITDA margin expanded by 250 basis points despite again a very high newsprint prices, but on the back of other operating cost cutting measures that we took. PAT for the quarter grew by 67.3% to INR410 million versus INR245 million in Q4 FY 2022.
Moving on to our digital business, which has been a key focus area and an important vertical in terms of QoQ [Phonetic] growth for our business. The company has been steadily growing its loyal monthly active user base across its app. It increased almost 7 times from 2 million users in January 2022 to more than 14 million in March 2023. Our teams continue to work on their digital labs to improve the engagement with users and this is helping overall retention of our readers across all formats.
Coming to the radio division. In FY ’23, revenues grew by 20% to INR1,342 million versus INR1,122 million last year, EBITDA grew by 28% to INR402 million versus INR314 million with EBITDA margin at 30% in FY 2023. Our teams at MY FM continue to work towards building strong brand visibility through key tie-ups, local and current affairs, and innovative content to increase audience engagement, which will help us increase our advertising rates as well as augmented revenues.
With this, I would now request Mr. Girish Agarwal to update us on the operations.
Girish Agarwal — Non Executive Director
Thank you, Pawan, and good evening, everybody, and thank you for joining us on this call. As Pawan stated earlier, we concluded this fiscal on a stronger note with strong YoY growth. Especially Indian print media industry is witnessing a strong growth in advertising across segments, and this is happening across languages — Hindi, Gujarati, Telugu, Tamil, Marathi, which is very heartening. Our key market seems to be doing very well, and as it is evident that in the GST collection, it’s up by almost 15%, 25% from our markets where Dainik Bhaskar operates. Dainik Bhaskar’s editorial strategies and dominant position in these markets are resulting in a strong growth of advertising revenues across the board. In addition, the newage sectors, the digital players are also using print for their hyperlocal campaigns, and we are very optimistic that this trend of increasing revenues will continue in forthcoming quarters.
Our radio and digital presence are ever increasing, and we continue to innovate our content, improve our omnichannel platform for delivering truthful, crisp, and pertinent content to our loyal readers base. We’ve been implementing various cost optimization measures as we have been highlighting over the past few years to ensure that these measures keep our cost in control, and we’re very happy that so far whatever cost measures we have informed you, we have lived by that commitment. The newsprint prices have also started softening,further and as indicated in our press release, while newsprint prices were high on a YoY basis, it has started to taper off and the true benefit of this tapering will be visible over the forthcoming quarters.
This is all from our side. And my colleagues and I would now be very happy to respond to your queries. Thank you very much.
Questions and Answers:
Operator
[Operator Instructions] Our first question is from Rushabh Shah [Phonetic] with o3 PMS. Please go ahead.
Rushabh Shah — o3 PMS — Analyst
Hello.
Girish Agarwal — Non Executive Director
Yes, Mr. Shah.
Rushabh Shah — o3 PMS — Analyst
Am I audible, sir?
Girish Agarwal — Non Executive Director
Very much.
Rushabh Shah — o3 PMS — Analyst
I have a couple of questions.
Girish Agarwal — Non Executive Director
Please go ahead.
Rushabh Shah — o3 PMS — Analyst
We have seen the prices of paper fall which will lead to the cost savings. So will we invest the savings in increasing the circulation or more investment in digital part of the business and why so, sir?
Girish Agarwal — Non Executive Director
So please understand whatever savings are coming that will be further adding on to our bottom line, but that is not stopping us from any expansion plan. As I mentioned to you in the last quarter also that we are looking at circulation growth expansion in most of our markets, MP, Bihar, Rajasthan, Gujarat, so we are anyway going ahead with that. We are doing it. And also in digital, we are not leaving anything — any stone unturned over there, and that is the reason why we have the huge number of app monthly users and daily users also. So please rest assured your company has enough bandwidth, enough reserve with us to take care of any such requirement and expansion issues.
Rushabh Shah — o3 PMS — Analyst
Okay. And then the second question is, how is the capacity utilization in terms of ads in radio business?
Pawan Agarwal — Deputy Managing Director
So in radio business, utilization is about 11 minutes in an hour. If you look at our entire clock, so there’s still headroom for growth in those 30 stations, a lot of headroom for growth in smaller stations and bigger stations we are trying to reduce this in peak hours also.
Rushabh Shah — o3 PMS — Analyst
And my third question is, is there scope to improve advertisement rates in radio or newspaper?
Girish Agarwal — Non Executive Director
So, see, advertising rate is not one-way traffic. If I can increase the rates, I would have done it yesterday only. But its all process [Phonetic]. The market has to respond, the advertiser need to feel okay about it, and I think it’s a everyday affair of ours to ensure that we are able to push our rates a bit, but it’s not that simple. So I hope you will appreciate this.
Rushabh Shah — o3 PMS — Analyst
And then the last one from my side. Are we seeing intensity of competition increase in your newspaper business with falling paper prices?
Girish Agarwal — Non Executive Director
So, frankly speaking, in last 30 years of my career, we have always seen very intensive, extreme competition in all the markets. And that’s why it keeps us on our toes all the time. So we haven’t seen any change, plus or minus, to be very honest.
Rushabh Shah — o3 PMS — Analyst
Okay. Thank you so much. And all the best for the next coming quarters.
Girish Agarwal — Non Executive Director
Thank you, sir.
Operator
Thank you. Our next question is from Amit Khetan with Laburnum Capital. Please go ahead.
Amit Khetan — Laburnum Capital — Analyst
Hi, good evening and thank you for the opportunity. So my first question is on other operating income. There seems to be a substantial jump of about 30% quarter on quarter. What’s driving this and is this a sustainable number or is there some one-off element here?
Girish Agarwal — Non Executive Director
These are the job works done by our production team in various location because, as you know, our printing presses are lying ideal during the day. And M.P. Printers is one of our printing subsidiary in our set up in Noida. So they also do the job work. So all these guys are going out and doing higher jobs. Especially after COVID, this whole printing job has increased. And also this bucket has the income from interest from FD. As you know that currently company is sitting on a INR631 crores bank and cash balances. So a large chunk of it is in FD form, so we get FD income also.
Amit Khetan — Laburnum Capital — Analyst
I am talking only about the operating part, right, not the other income. Other operating income, if I exclude the circulation and the advertising revenue from your revenue…
Girish Agarwal — Non Executive Director
I’m talking about that only. I’m talking about the other income, which includes job work, and it includes little bit of event income and also the FD income, and also it includes the wastage from the newsprint sales.
Amit Khetan — Laburnum Capital — Analyst
Understood. Secondly, we’ve done a very good job on cost control over the last few years. If we exclude newsprint cost, how much of our cost structure is variable and how much is fixed?
Girish Agarwal — Non Executive Director
So, frankly speaking, if I look at the other cost apart from the manpower, so my Q4 cost is around INR144 crores.
Amit Khetan — Laburnum Capital — Analyst
Yeah.
Girish Agarwal — Non Executive Director
There’s INR144 crores I can call it 100% variable, but in a way it’s fixed because I have to print number of copies. So in a large way, I would call it fixed, depending on the number of copies, circulation, our approach in the market and all.
Amit Khetan — Laburnum Capital — Analyst
Got it. So what I’m trying to understand is, say, tomorrow — next year, if your revenues fall 10%, how much our cost can fall by?
Girish Agarwal — Non Executive Director
Okay, I’m going to answer it other way. If my revenue increases by 10%, 15% next year, how much this cost will go up? So let me give you the number. In the Q2, we had a cost base of INR138 crores. In Q3, because of festival, the cost went up to INR153 crores because more number of pages and all that. In Q4, it came down to INR144 crores. So our idea is to keep this cost under control. They should only increase when my revenue goes up because when my revenue goes up, either through circulation or the ad revenue, the number of copies goes up and number of pages goes up, and I’m more happy to increase this cost, because then I’ll print more pages for advertising, and I’ll incur the cost for that.
Amit Khetan — Laburnum Capital — Analyst
Got it, got it. And lastly, our circulation revenues have been flattish, and we would have affected some price increases over the course of the year. So what would be our loss of copies and how should we think about volume growth from here on?
Girish Agarwal — Non Executive Director
So our loss of copies is nil. If you look at my Q4 number last year and Q4 number this year, I’m at the same number, 43 lakhs round. And I’ve increased the cover price from INR4.70 to INR4.82. So I have taken a INR0.12, which is 3% jump in my cover price overall without any loss in the circulation.
Amit Khetan — Laburnum Capital — Analyst
Got it. And. How should we think about volume growth going forward?
Girish Agarwal — Non Executive Director
As I mentioned in the last call, we are working hard to increase another 2, 3 lakh copies this year. And as of now, things looks okay. Let’s see how it goes going forward.
Amit Khetan — Laburnum Capital — Analyst
All right. That’s it from my side. Thank you and all the best.
Girish Agarwal — Non Executive Director
Thank you, sir.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Pradyumna Choudhary from JM Financial. Please go ahead.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Hi, sir. Congrats on a good YoY set of numbers and an improving outlook. So my first question is in regards to the gross margin. The last couple of quarters, we’ve been seeing a declining newsprint rises, right? But the same hasn’t really translated, till now at least, into much improvement in our gross margin. So could you throw some light over there? That’s my first question.
Girish Agarwal — Non Executive Director
So if you look at the EBITDA margin, in Q2, we were at 16% EBITDA margin. In Q3, we went up to 17% EBITDA margin. Now as we sit in Q1, we believe our margin should be decently higher than this. So when we meet you in the month of July now, we’ll give you some good news on the margin.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Okay. And just trying to understand more from an inventory side, are we done with the probably some high-cost inventory that we were left with regards to the newsprint because…
Girish Agarwal — Non Executive Director
Very much let me give you the newsprint prices trajectory also. in quarter two last year, we were at INR63,500 per ton blended cost of the newsprint of Indian and imported. In Q3, it went down to INR61,500. In Q4 it went down to INR60,000. And as we are sitting in Q1, we are hopeful that this Q1 would close at around INR57,000. So there has been a constant decline in the newsprint cost and also this will reflect in the margin going forward.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Usually, sir, what I’m trying to understand is, usually what’s the lag period between the prices going down and the same getting reflected in our margin? Just a sense — a very broad sense?
Girish Agarwal — Non Executive Director
There is no formula. For example, at one particular point of time, we thought $800 or $850 was a okay price because market was showing indication for $1,000 and I went ahead and bought a six-month stock. After that market did go to $1,000, but then quickly got corrected and came down to $750. So the lag period, because I bought for six months, benefited me and stood with me. While if I don’t buy for 15 days, 30 days, the lag period is less. So there’s no formula, frankly speaking. It’s a commodity market and one has to look at that accordingly.
Pradyumna Choudhary — JM Financial Ltd — Analyst
And my second question relates more to the digital lab side. So now, are you in a position to give any updates with regards to our strategies over there?
Girish Agarwal — Non Executive Director
So I can update you saying that we are doing pretty good in digital. As we mentioned to you last time also, that our focus — so generally what happened in digital business, people are dependent on the advertising to take care of their digital expenses and give them profit. But what we have seen in the news genre worldwide, especially if you look at the example of New York Times and other publications from Sweden and other places, we have seen their dependency is more on the subscription rather than the advertising because advertising and digital platform is a commodity, okay.
So our focus also is there that we need to go towards subscription, and that’s how we’ve been working in last from two to three years’ time on that, making sure that our content are really worthwhile for a customer to pay for it. And we’ve been doing multiple experiments in multiple markets in different socioeconomic categories of our readers to see how much they are willing to pay, are they interested in the paywall or a metered wall or e-paper and all that? What would they pay for? So all these experiments are going on from last six to eight months and would take another, I think, eight, 10 months more. And I’m sure that we — one thing I can assure you, we are very much in the right direction.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Understood, sir. And my last question is with regards to the rate of advertising. So I think it’s been four, five years since we last saw an increase by the DAVP. So are we expecting any increase in advertising rates by then in the next two months maybe?
Girish Agarwal — Non Executive Director
I will certainly forward your request and suggestion and apprehension to the Government of India to look into it.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Thank you, sir. All the best.
Operator
Thank you [Operator Instructions] Our next question comes from Naman Dhanuka [Phonetic], an investor. Please go ahead.
Naman Dhanuka — — Analyst
Hi. Thank you for the opportunity. Sir, I was recently seeing a billboard of yours. Is there a new campaign that you’re running in Mumbai? And could you just share some thoughts on that, please?
Girish Agarwal — Non Executive Director
So just to let you know, Dainik Bhaskar, as a newspaper, has been launched in Mumbai. But it is not being launched by DB Corp. As you know, that section of our family runs the business in Maharashtra for Hindi, so they are the one those who have launched Mumbai, obviously with our support, with tie up with us. But no financial involvement of DB Corp on that, and they’re doing good job in Mumbai.
Naman Dhanuka — — Analyst
And secondly, you mentioned that you have INR631 crores of cash and cash equivalents and you’re also generating reasonable amounts of free cash flow every year. So if you can just explain to us what you plan to do with the excess cash going forward.
Girish Agarwal — Non Executive Director
I’m happy to inform you today both decided to announce another interim dividend of INR3. So this year we have announced INR6 of interim dividend, equivalent to almost INR106 crores, which is 63% of our PAT. So as you know, our policy has been very clear that unless company needs some more money and all that, whatever money board has approved, we announce as a dividend.
Naman Dhanuka — — Analyst
Okay. And is there any possibility of doing a buyback considering the stock prices where it is and you don’t really have need for the excess cash?
Girish Agarwal — Non Executive Director
We can certainly take your suggestion to the board in the next meeting.
Naman Dhanuka — — Analyst
Thank you so much.
Girish Agarwal — Non Executive Director
Thank you, sir.
Operator
Thank you Our next question. Is from Riya Mehta with Aequitas Investment. Please go ahead.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Thank you for giving me an opportunity and congratulations on good set of results.
Girish Agarwal — Non Executive Director
Thank you.
Riya Mehta — Aequitas Investment Consultancy — Analyst
My first question is in regards with the digital business. So we’ve been doing really great there. And just out of sheer comparison. So I think Dainik Bhaskar app was called on January ’22 and May ’22, we had around 13.6 MAUs. However, sequentially, we’ve dropped down to 10.9. Any particular reason?
Girish Agarwal — Non Executive Director
No, no. I think you’ve got some number wrong. We have not dropped down from 13 to 10. You must be seeing the overall number in our — Pawan, correct me if I’m right.
Pawan Agarwal — Deputy Managing Director
No, so…
Riya Mehta — Aequitas Investment Consultancy — Analyst
I have it from the presentation.
Pawan Agarwal — Deputy Managing Director
You’re talking about MAUs, correct?
Riya Mehta — Aequitas Investment Consultancy — Analyst
Yeah, MAUs.
Pawan Agarwal — Deputy Managing Director
One second.
Girish Agarwal — Non Executive Director
So ma’am, MAU, is a function of…
Pawan Agarwal — Deputy Managing Director
Yes, you’re talking about March ’22 number, correct?
Riya Mehta — Aequitas Investment Consultancy — Analyst
Yeah, May ’22, I think.
Pawan Agarwal — Deputy Managing Director
Yeah, that actually was done as a promotion by us for that particular month. That’s the reason, on that particular month, number went up. Otherwise, if you look at my overall number, we’ve been maintaining a number of around 16 million to 17 million for Dainik Bhaskar and Divya Bhaskar put together. And as I mentioned to you, we are doing multiple experiments these days now in terms of subscription preparation for going forward. So we are also experimenting in particular geographies, particular socioeconomic class to see when I go and ask them that if you have to pay for a metered wall, if you have to do something as such and all, how do they respond. So maybe couple of lakh people here and there keep moving based on that.
Riya Mehta — Aequitas Investment Consultancy — Analyst
No, because I think in 2022 we had around — average of around 16.5 million to 17 million, and now we’re seeing around 14 million to 15 million, so that’s why I was just a bit concerned. My next question is in line with the print, so I think sequentially our raw material prices have been going down. However, EBITDA for the print as a whole has — so in Q2 FY ’22 it was 17% and then it was still higher. And I think Q4 sequentially is decreasing to 15.7 million, so this is a impact of inventory of newspaper or any other thing — expenses we can read into?
Girish Agarwal — Non Executive Director
No, no, expenses. All costs under control. This is all about newsprint. And also what happened, the number of pages has gone up in last two quarters because of the more inventory of the advertising and the season time. Because last year, if you remember, in this quarter the education results were postponed, so that quarter was not a very strong education season. This year it happened because of that.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay. Yeah, because the raw material prices were going down and EBITDA was up and now the price is going down, still our EBITDA is going down. So just concerned there.
Girish Agarwal — Non Executive Director
As I had answered earlier question that in the Q1 the EBITDA margin will expand in a pretty decent manner.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay. Thank you. And my third question would be in regards to the regional advertisement. So I think in an interview you said that you’ve seen 23% volume growth. So could you elaborate more on where do you see this coming from — going forward, where do you see growth coming from and which segments and do you see any shift in the segments as a whole.
Girish Agarwal — Non Executive Director
Growth is coming from largely, I would say, barring out few states, most of the states are contributing to the growth, number one. Number two, segments are very clear. Real estate, education, jewelry, healthcare, these are the segment — government — which are going pretty decently. And our focus is also on these states and these categories.
Riya Mehta — Aequitas Investment Consultancy — Analyst
And could you give me some more details on auto. How is auto doing for us? And earlier it was some INR100 crores odd. Where is it right now and where do you see it going forward?
Girish Agarwal — Non Executive Director
So, frankly speaking, if you look at the auto number over last year, we have grown. But if I see the auto compared to that INR100 crores of ’19-’20 number, we are still far behind because most of the auto companies are hardly launching any vehicles. So that’s one problem we have with them. We’re waiting for them to start focusing — getting their response from the market, start selling more vehicles, and then they should come and do more launches and advertise.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay, I know I think you said that the new startup companies are investing more with us. So could you give some insights into that?
Girish Agarwal — Non Executive Director
What happened, generally people used to say that all these digital companies are different, they don’t look at and all that. So I’m saying all these digital companies are also advertising with us, all the food delivery guys, all the medicine delivery guys, different apps, they come advertise through us to capture the audience. So that’s the reason we tell people that all these new age so-called advertisers are also looking at print when it comes to popularizing themselves.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Sir, going forward, correct me if I’m wrong, we would see similar volume growth of 23% to 24% going forward. And in terms of value or yields, it would more or less remain constant.
Girish Agarwal — Non Executive Director
I can only say that we are working very hard. Teams are doing all efforts to ensure that the growth comes in the way we are looking at it. Committing on any number would be a futile exercise because better to deliver and come back to you in the month of July to give you the quarter one numbers.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay. And how is FMCG advertisement going? It was a small part for us, but it too was lower, FMCG and lifestyle.
Girish Agarwal — Non Executive Director
Yeah. FMCG is growing but on a very single digit and lifestyle is bad. Not too bad, but still bad.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Thank you so much. I’ll get back into queue for further questions.
Operator
Thank you. Our next question comes from Bhagyesh Kagalkar with HDFC Mutual Fund. Please go ahead.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Yeah. Hi, sir.
Girish Agarwal — Non Executive Director
Yes, sir.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
There are two queries here. One is, okay, you’ll be aware that New York Times did some 11% growth last year 2.31 billion. The second part interesting about them was that they are going to receive $100 million from Google Alphabet as a three-year deal, which will allow them to feature NYT content. The issue is I think the government has been supportive of the Indian print media grievance, but nothing concrete has happened so far up to that these tech companies do share something with us essentially.
Girish Agarwal — Non Executive Director
So as you are — if you remember, last time I mentioned to you that DNPA, which is Digital Newspaper Association, as well as Indian Newspaper Society has already gone and filed a case against Google in Competition Commission of India. And since the matter is sub judice, it will not be prudent on my part to comment anything on that. But we have taken up the matter with the regulator saying that Indian newspapers should be compensated by Google in an appropriate manner.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Okay. Other question is a general question. See, most of the area in which we operate now will face elections, both Lok Sabha as well as the Vidhan Sabha elections in next 12 to 18 months. You had mentioned that there will be a boost to the overall economy, small guys, advertising and everything. Will this include the political parties also who will take out big ads from now onwards because election will be seriously contested, every election essentially, so that should give an extra boost to revenues.
Girish Agarwal — Non Executive Director
Yeah, political parties should consider our markets, so that if they want to communicate their message to our millions of readers, they can do it through us.
Bhagyesh Kagalkar — HDFC Mutual Fund — Analyst
Okay. Thanks for the clarity. Thanks and all the best.
Operator
Our next question comes from Yash Rangaswamy [Phonetic] with JP Associates [Phonetic]. Please go ahead.
Yash Rangaswamy — JP Associates — Analyst
Yeah, hey. Good evening. First of all, congratulations on a good set of numbers. So I would — my first question is with regards to the digital spend that we’ve done during the quarter. Can you throw some light on that, please?
Girish Agarwal — Non Executive Director
Sir, if you remember couple of quarters back, we took the permission from all of you to not disclose any specific numbers on digital so that our competition should not get any kind of information on this front. That’s the reason we are not disclosing any specific number on the digital. But I would like to assure you that your company is doing everything possible to ensure that we get the desired results in the digital platform and we are working towards it.
Yash Rangaswamy — JP Associates — Analyst
Okay. And was just going through the results that have been announced, and I was just trying to figure out what the EBITDA margin for print stands at because it’s not mentioned anywhere. I was looking at the results as well. So nothing’s been mentioned on that front. Could you please let us know the number, the margin for the print business alone?
Girish Agarwal — Non Executive Director
So in print, our EBITDA margin is 20%.
Yash Rangaswamy — JP Associates — Analyst
20%, okay. And just one more question. With regards to the government ads, have they come back versus what they were before or are we still — there is still some ground that needs to be acquired on that front?
Girish Agarwal — Non Executive Director
We have acquired all the grounds.
Yash Rangaswamy — JP Associates — Analyst
Okay, so there’s no embargo as such at the moment?
Girish Agarwal — Non Executive Director
No, sir.
Yash Rangaswamy — JP Associates — Analyst
Alright, thank you.
Operator
Thank you. Our next question comes from Pradyumna Choudhary with JM Financial. Please go ahead.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Thank you for the follow up. Just another question was would you be able to quantify the government ad revenue in the quarter gone by, how much came from government ads?
Girish Agarwal — Non Executive Director
Government advertising includes central government, state government, panchayat, all the government, local bodies like Nagar Nigam, state housing boards and all put together as such. So if I look at the Q4, the government revenue was around INR65 crores.
Pradyumna Choudhary — JM Financial Ltd — Analyst
Around INR65 crores. Okay. Yeah. Thank you.
Operator
Thank you. Our next question comes from the line of Riya Mehta with Aequitas Investment. Please go ahead.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Hi. Thank you for my follow-up question. My question is in regard to, there was a case of on the radio business where we have filed a counter case for increase in the — there was some royalty or something to be paid to the main label producers or something. Could you elaborate on that?
Girish Agarwal — Non Executive Director
We’ve challenged it in the Supreme Court. The court has admitted our petition. It’s under consideration of Supreme Court. It’s an old case. The entire industry is in Supreme Court as to hear our petition soon. We are pretty hopeful that we’ll get a favorable order from the Supreme Court.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay. And if it is unfavorable, what will be the impact on the financials?
Girish Agarwal — Non Executive Director
We still don’t know.
Pawan Agarwal — Deputy Managing Director
As the matter is sub judice, we would not like to comment on that. I hope you will appreciate that.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Also in regard to the employee cost, I think it has increased significantly on a quarter-on-quarter basis. So do we see this similar trends going forward?
Girish Agarwal — Non Executive Director
When you say significant, what percentage is significant for you, madam?
Riya Mehta — Aequitas Investment Consultancy — Analyst
Percentage of sales, it has increased almost 180 basis points that we see on a quarter-on-quarter basis the employee expenses. So just want to get your insights on it.
Girish Agarwal — Non Executive Director
No, my manpower cost, if you see you Q-on-Q from INR100 crores has gone up to INR102 crores, INR103 crores actually. So it’s a 3% growth in the manpower cost.
Riya Mehta — Aequitas Investment Consultancy — Analyst
I’m saying as a percentage of sales, so maybe yeah, okay. And in terms of other expenses, which is event and all the other ancillary businesses, what kind of margins do we see there? And what kind of growth — because last two years, I think FY ’22 and FY ’23, we’ve seen significant growth in that business. So going forward, what do you anticipate and what are the margins like in that business?
Girish Agarwal — Non Executive Director
Margin are in the same range, what DB Corp as a company makes largely there. And in terms of growth, we are hopeful that this percentage — higher percentage will continue because after COVID, lot of people have started getting things published and again so the printing job is doing pretty good there.
Riya Mehta — Aequitas Investment Consultancy — Analyst
Okay. I think that’s it from my side. Thank you.
Girish Agarwal — Non Executive Director
Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from Mohammed Patel with Care Portfolio Managers Private Limited. Please go ahead.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Yeah, hi. So my first question is for FY ’23, can you split the sectoral mix for advertisement into education, real estate, FMCG, government?
Girish Agarwal — Non Executive Director
We can give you some flavor. As I mentioned to you, for the Q4, government was around INR65 crores, and response category, which is classified, was around INR50 crores. Real estate, education, and automobile put together was around INR100 crores. Yeah, these are small other categories.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Can you give the same number for full year FY ’23, percentage is also fine?
Girish Agarwal — Non Executive Director
So if you go by percentage of last year, so government was around 15%, education, real estate, automobile put together around 30%, and response category another 15%.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. My second question is, are we expecting any city addition launches to aid volume growth in the near term?
Girish Agarwal — Non Executive Director
Sorry, I couldn’t understand it.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Any city addition launches, adding new cities or adding new additions to increase the volume growth.
Girish Agarwal — Non Executive Director
Now we are expanding within our territory, within our geographies.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. My next question is, can we expect the gross margin revival to historical level starting at FY ’24?
Girish Agarwal — Non Executive Director
That’s what we’re working towards.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. And what is the average circulation volume number for full year FY ’23 versus FY ’22?
Girish Agarwal — Non Executive Director
Almost 42.5, correct, full year? Yeah.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Subscription includes e-paper, and I was just thinking through, that is shared on a social media app. So how do we tackle that?
Girish Agarwal — Non Executive Director
No, we don’t — so there is a High Court orders now where the e-paper circulation is illegal. So whenever we come to know about few cases, we take them to the complaint over the police station and they correct themselves because there are some excited lot, those who make a group and every morning they copy the e-papers and circulate to all the groups. I’m sure you would also be member of one of them groups. So these excited lots, whenever we come to know about them, we send them the legal notice and then they correct themselves.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. And my last question, so you prefer subscription over advertisement. So if you can just tell your thoughts on why you believe on this?
Girish Agarwal — Non Executive Director
It’s not about my preference. Is that how the news apps worldwide, the successful one, have emerged. And when we look at and review in the same context the Indian market, we also believe that’s the way forward because advertising on the digital platform is a commodity. So why would somebody come and pay me a premium for advertising beyond a point? And if my reader is — see, advertising in a newspaper or in a digital format have a different co-relevance. In a newspaper, I’m immersed in a particular news in a particular paper, and they’re advertising on the side of it, while in digital advertising is in a very in my face kind, you are intruding in my reading pleasure there. So that’s the reason, as a consumer, nobody appreciates advertising on digital platform or even on television platform. If you look at IPL, suddenly I’m watching something seriously and it goes off and somebody comes in saying that, why don’t you buy this candy. Now you’re upsetting me. While in print, it happens in a very decent manner. I’m reading my article, there’s a ad placed there. That’s the reason we believe that if a reader has to pay for an app, news app going forward, he doesn’t want all these nonsense there. You want to read your e-paper or your paper the way you read your newspaper. That’s the reason we are not very comfortable with putting lot of ads over there and irritate our consumer.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. Can we expect some meaningful contribution from digital business starting at FY ’24?
Girish Agarwal — Non Executive Director
I think it’s too early, sir. Larger thing takes time. And we want to give time to our readers so that they also get used to us and then show us the larger benefits going forward.
Mohammed Patel — Care Portfolio Managers Pvt. Ltd. — Analyst
Okay. Thank you.
Operator
Thank you. Our next question comes from Ankit Shah with White Equity Investment Advisors. Please go ahead.
Ankit Shah — White Equity Investment Advisor — Analyst
Thanks for taking my question. I just have one question on the margin. How would be the trajectory of digital business investment in FY ’24. And in this context, how would the margin trajectory of the company look like in FY ’24?
Girish Agarwal — Non Executive Director
See the advertising growth in print as well as the newsprint prices going down will help me improve my EBITDA margin considerably. At the same time, whatever investment we have to do in digital that will continue there. But since digital also is maturing now in terms of their requirement, so they won’t need major help from us going forward. So that way whatever saving print does, we’ll add on to the overall margin of the company.
Ankit Shah — White Equity Investment Advisor — Analyst
Okay. So would it be fair to assume that the spend on digital business may not rise further? So let’s say, if we were at INR100, next year it may not cross INR100?
Girish Agarwal — Non Executive Director
Yes you can kind of assume that, sir.
Ankit Shah — White Equity Investment Advisor — Analyst
Alright, that’s it from side. Thank you.
Girish Agarwal — Non Executive Director
Thank you, sir.
Operator
Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments.
Pawan Agarwal — Deputy Managing Director
Thank you, everyone, for your participation and time on this earnings call today. I hope that we have responded to your queries, and we will always be happy to be of assistance through our Investor Relations department headed by Mr. Prasoon Kumar Pandey for all your further queries. Thank you and have a great evening.
Girish Agarwal — Non Executive Director
Thank you, everybody.
Operator
[Operator Closing Remarks]