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Tag: Media stocks

  • Analysts bullish on broadcasters’ stock rebound thanks to ad revenue recovery

    Analysts bullish on broadcasters’ stock rebound thanks to ad revenue recovery

    KOLKATA: The Covid2019 pandemic hit the media and entertainment industry due to pressure on advertising revenue, uncertainty in subscription and closure of multiplexes. As the lockdown eases, operations have started normalising leading to a recovery in the business. On Tuesday, Nifty media index advanced 2.27 per cent while companies like Network18, Inox Leisure, Dish TV, Zee Media and Jagran Prakashan saw four to five per cent gains.

    Network18 was the highest gainer in the Nifty media index, advancing 4.99 per cent. Moreover, its stock has been gaining for eight days consecutively as of Tuesday.  It touched a new 52-week high hitting Rs 47.3 during the day while it ended the day at Rs 47.30. TV18 Broadcast stock has been gaining for the last three days as of Tuesday and has risen 10.45 per cent returns in the period. Its shares rallied 3.79 to end at Rs 39.60 , after touching a new 52-week of Rs 40.3. Zee Media Corporation Ltd (ZMCL) also gained 4.48 per cent on Tuesday. While Zee Entertainment Enterprises Ltd (ZEEL)’s gain was comparatively lower, both ZEEL and ZMCL have been gaining for the last two days as of Tuesday. 

    Figure: Nifty Media Index on Tuesday 

    Analysts are also bullish on the rebound of broadcasters’ stocks on the back of higher advertising revenue. “Now that advertising is coming back after unlock, there will be some rebound on the expectations of advertisement revenues. You may see media stocks getting better but not all stocks, particularly multiplexes, because malls have not opened up. But if you look at pure broadcasters, the valuation may go up. Depending on the how soon the recovery happens, there will be an upside. The cable operators, who are facing disruption in payment, will see things easing down," says SBICap Securities institutional equity research head Rajiv Sharma.

    “Print media will take a lot of time to rebound because advertising revenue has taken a hit and people are not taking newspapers. Broadcast will be the first segment to recover. Once fresh content comes in, there will be bigger recovery in advertising revenue. In the case of print and radio, this is more of relief rally. Structurally, radio and print are going to suffer even after Covid2019,” Elara Capital VP – research analyst (Media) Karan Taurani says.

    Among DTH players, Dish TV stock has been gaining for the last 17 days and has risen 125.47 per cent returns in the period. DEN Networks has gained 9.69 per cent on Tuesday. Another major multi system operators, Hathway Cable and Datacom has also gained 7.67 per cent.

  • Media stocks under fire as Sensex crashes

    MUMBAI: Finance minister P Chidambaram‘s `no nothing‘ offer to the media sector came as no surprise except in the area of set-top boxes (STBs) where one thought a push would be given in terms of sops to boost the local manufacturing industry. There is very little that the Budget can offer in realistic terms and the past trend continued this time too.

     

    If the Union Budget 2007-08 hurt the media stocks today, it was more to do with the announcements that were made as part of an overall corporate sector tax policy. There were, in fact, three tax proposals that could pinch the industry but in varying degrees.

    First, and this will particularly hit the news channels, is the employee stock options (ESOPs) which are being brought under the fringe benefit tax (FBT) net. Listed companies like TV18 Group, NDTV and TV Today Network have been planning to use this as a management tool to retain talent in a media business that has recently seen a high attrition rate.

    Already NDTV‘s net profits have been eroded (for a few quarters) by a rise in personnel costs and ESOPs. TV18‘s policy has been to reserve a chunk of holding for the employees while TV Today has taken permission to offer up tp five per cent as stock options.

    The news channels took a beating today with TV18 dropping 4.47 per cent to Rs 578.70 on the BSE while Global Broadcast News slipped 6.08 per cent to Rs 572.80. NDTV, on the other hand, fell 2.26 per cent to Rs 318.50 but TV Today gained 1.7 per cent to Rs 134.85.

    Unlike IT companies which has built stock options into it, the media sector shouldn‘t be unduly alarmed. “There may be some cause for concern but it wouldn‘t have any major impact. Though it is becoming a trend, the media sector doesn‘t integrally have a big component reserved as stock options,” says an analyst at a broking firm.

    The dividend distribution tax, up from 12.5 per cent to 15 per cent, will also impact the sector. But this could only be a minor shock as media companies are not well known for doling out huge dividends.

    The third, and probably most pinching of the lot, is the commercial property rentals that will now fall under the service tax bracket. If this does not exclude the entertainment sector (we are still awaiting clarity on this), multiplexes may find themselves in a spot of trouble. Most of them have ambitious expansion plans to spread across the country and do not see ownership of property as the only route to setting up screens in different locations.

    The multiplex companies went into a free-fall today as the scrip value dipped in the stock exchanges. Adlabs and Shringar ended four per cent down at Rs 423.65 and Rs 52.65 respectively while Cinemax fell 7.29 per cent to Rs 141.25.

    “If the multiplexes fall under the service tax net, it will have a more lasting impact on their bottomlines,” says an analyst.

    Meanwhile, UTV dropped 8.61 per cent to Rs 258.95 while Balaji Telefilms fell 7.58 per cent to Rs 114.05.

    Zee Group‘s Wire & Wireless India Ltd (WWIL) also shed 6.5 per cent to close the day at Rs 102. While Cas (conditional access system) is slow to take off, the industry is still not clear whether there are incentives provided in the Budget for domestic manufacturing of set-top boxes.

    “Media stocks fell today along with the tumbling of scrips in other sectors like cement and IT. Besides, there was a global meltdown which cast its imfluence in India. It remains to be seen how long the Budget will cast its negative impact on the media stocks, but there is nothing that is deeply damaging,” the analyst adds.

     
  • Media stocks plunge as Sensex sheds 452 points

    Media stocks plunge as Sensex sheds 452 points

    MUMBAI: Media stocks crashed along with the benchmark Sensex Index which shed 452.80 points to close the day at 10,938. Pulled down by brokers who sold heavily to cover margin requirements and foreign funds to reduce their exposure in the derivatives market, the negative sentiment was also visible in the Nifty Index which ended at 3279, down 109 to previous close.

    The major media scrips which recorded a two figure drop include HTMT, Adlabs, Zee Telefilms, Sun TV Ltd, NDTV, Saregama, TV18, Galaxy Entertainment, Gemini Communications and Navneet Publications.

    HTMT took the deepest plunge, going down by Rs 48.30 to close at Rs Rs.701.75 at the Bombay Stock Exchange (BSE). Sun TV also stood weaker, recording a fall of Rs 38.25 to close at Rs.1192.35. Adlabs went down by Rs 26 to close at Rs 271.45 while NDTV ended the week at Rs 220.00, falling by Rs 21.10. Gemini Communications recorded a drop of Rs 22.8 to touch Rs Rs.433.30.

    TV 18 went down by Rs 19 .35 to close at Rs 636.15, while the Zee TV stock dropped by Rs 15 to end the week at Rs 229.60. Navneet Publications recorded a fall of Rs 15, to close the week at Rs 304.30. The Saregama scrip shed Rs 11.35 to touch Rs 250. Galaxy Entertainment went down by Rs 13.55 to end the week at Rs 268.

    Other important media scrips which saw the red at the week’s close included UTV, BAG Films, Mid Day Multimedia, K Sera Sera, Pritish Nandy Communications and ETC Networks.

    Stock analysts feel the Sensex is undergoing an overall valuation adjustment. “The correction in the valuation of media stocks is in line with the stock market crash which fell around 11 per cent in the week. There is no unusual reason to worry about the media stocks,” says ING Vysya fund manager Manish Bhandari.

    So will the fall continue? “The sensex has already lost heavily. It may further dip by about 3 per cent. But a heavy fall like this is definitely ruled out,” says Bhandari.

    The media scrips which bucked the trend are TV Today Ltd and Balaji Telefilms. Both recorded minimal gains of Rs 1.35 and Rs 0.75 respectively. “Balaji’s strong fourth quarter result has protected the scrip’s fall,” adds Bhandari.