K. Venkatasubramanian | Updated on March 19, 2011


The political issues surrounding the formation of a separate Telangana has been a key reason for affecting the fortunes of Deccan Chronicle Holdings in the recent December quarter. After managing a strong FY-10, this fiscal has been a challenging one for the company.

For the first nine months of this fiscal, while revenues fell 4.7 per cent to Rs 688.1 crore, compared to the same period in FY-10, net profits slid 17.9 per cent to Rs 209 crore.

What may have caused greater disappointment to the markets was that all the other listed players in this space — Jagran Prakashan, DB Corp and HT Media, had more than 20 per cent growth in revenues. This on the back of substantial expansion in advertising volumes and in some cases realisations as well.

The political unrest in its key geography of operation has significantly affected advertising volumes for Deccan, though circulation has been relatively stable.

With a new launch made in Coimbatore, raw material costs too shot up for the company, which may continue, given its recent launch in Kochi as well.

In terms of readership, for the second successive quarter, the IRS data showed a decline.

The negative publicity around the IPL also took its toll on the stock. But the IPL team that it owns fully — Deccan Chargers, may receive a boost to valuations given that the base price tag of two new franchisees itself is $225 million.

Published on March 19, 2011

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