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Media
Interest rate hikes and overall slowdown hits ad revenue growth
Media companies would witness a relatively weak quarter as
advertisement revenue growth would remain subdued on account
of reduced ad spends by corporates and interest rate sensitive
sectors like automobile, realty and BFSI. Regional print media would
also witness substantial decline in national advertisement, impacting
overall ad growth. Our media universe would witness a revenue
growth of 15.0% YoY and 1.7% QoQ. Also, there will be a delay in
the ad spend from the education sector and would roll into Q2.
Occupancy on a rise
Multiplexes are expected to be hit by IPL but they are poised to do
better than last quarter which was completely overshadowed by ICC
cricket world cup. Hollywood movies like “Pirates of the Caribbean”
and “Kung Fu Panda 2” along with Bollywood movies like “Ready”
have been able to significantly pull in audiences. We expect average
occupancy to rise by 7-8 percentage points across multiplexes. ATP
is expected to remain more or less stable QoQ.
Good quarter for Dish TV
Though lower than the previous two quarters buoyed by festive
season and ICC World Cup, Dish TV would continue strong
subscriber addition on the back of higher demand during IPL season
4. The company is expected to add 0.9 million subscribers taking the
total to 11.3 million. The ARPU is expected to grow 1.6% to |152 on
back of recent price hike and increasing share of HD subscribers.
Profitability to show mixed trend
Margins across print and broadcasting players are expected to dip
QoQ as revenue growth hasn’t been able to keep pace with rising
input costs. Print media is expected to suffer the most due to rising
newsprint prices. Only Deccan Chronicle is expected to show a rise
as it suffered negative margins last quarter due to Telangana issues.
Multiplexes would witness margin expansion with rising occupancy
as patrons return to theatres post the ICC World Cup. Dish TV would
continue the margin expansion trend with rising subscriber base
with relatively fixed cost structure. Also, ENIL would witness margin
expansion since the loss making OOH business was hived off. Our
universe coverage EBITDA margin is expected to expand 320 bps
QoQ to 30.3% primarily due to negative base of Deccan Chronicle.
Company specific view
Company Remarks
Cinemax The company rolled out a new property in New Delhi with six new screens and
seating capacity of 1116. After a weak quarter marred by the ICC World Cup,
Q1FY12 would also be weak due to IPL Season 4 in the first two months of the
quarter. Occupancy would increase marginally to ~21.0% while ATP is expected to
be at | 128
DB Corp We expect a modest ad growth of 13.5% YoY mainly due to poor growth in national
ad revenues. Also, a rise in newsprint prices and increased circulation in recently
launched Aurangabad would lead to contraction of margins in this quarter. The
company may slightly delay its plans for a Bihar launch in the wake of declining ad
volumes
Deccan
Chronicle
We expect ad revenue to decline 12.5% YoY over the Telangana issue, which has
vastly affected the company. This, coupled with firming up newsprint prices would
put downward pressure on margins. Our valuation for Deccan Chronicle does not
include the contribution from the sporting venture
Dish TV We expect the company to add 0.9 million subscribers in this quarter backed by
the IPL taking the total subscriber base to 11.3 million. With increasing share of HD
subscribers and recent price hike, we expect ARPU to grow 1.6% to | 152
ENIL We expect a marginal increase in ad rates this quarter. The inventory utilisation is
expected to be better than that of Q1FY11 but not as good as that of Q4FY11. Top
10 stations would have inventory utilisation of about 80% while in the remaining 22
stations it would be about 60%. Realisation per slot is expected to rise to | 283 per
slot from | 280 in the last quarter
HT Media We expect English ad revenues to grow 13.0% YoY and Hindi ad revenues to grow
16.0% YoY. Revenues from the radio segment are expected at | 14.7 crore,
growing 20.0% YoY. Margins would remain under pressure on the back of firm
newsprint prices
Jagran
Prakashan
We expect ad revenues to grow at 10% YoY owing to low national ad growth and
delay in education sector ad spend and slowdown in the auto and BFSI sector.
Jagran took a ~10% price hike in April, which is still not passed on fully. Increase
in newsprint prices is expected to put pressure on the margins
PVR PVR did not roll out any new properties in the last three quarters. Though the
occupancy was affected by IPL season 4, it would still be more than the last
quarter thanks to Hollywood movies like "Pirates of the Caribbean" and "Kung Fu
Panda 2" and Bollywood movies like "Ready" doing well on the box office. We
expect occupancy to rise to 28% from 21% in Q4FY11 and ATP to fall to | 160 from
| 166. We also expect the sale of the Phoenix property to contribute ~ | 10 crore
to the PAT in Q1FY12
Sun TV We expect ad revenues to grow at a very low rate of 4.2% YoY in line with the
slowdown in the entire industry. Sun TV released one mid-sized movie this quarter
with a budget of about | 10.0 crore. After a very healthy growth in the last quarter,
we expect the company to add 0.3 million subscribers in its DTH segment
UTV
Software
UTV released "Thank You" in April 2011, which had a decent performance at the
box office. UTV also launched the game "EL Shaddai" in Japan, which recorded presales
of 2.0 lakh units
Source: Company, ICICIdirect.com Research
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Media
Interest rate hikes and overall slowdown hits ad revenue growth
Media companies would witness a relatively weak quarter as
advertisement revenue growth would remain subdued on account
of reduced ad spends by corporates and interest rate sensitive
sectors like automobile, realty and BFSI. Regional print media would
also witness substantial decline in national advertisement, impacting
overall ad growth. Our media universe would witness a revenue
growth of 15.0% YoY and 1.7% QoQ. Also, there will be a delay in
the ad spend from the education sector and would roll into Q2.
Occupancy on a rise
Multiplexes are expected to be hit by IPL but they are poised to do
better than last quarter which was completely overshadowed by ICC
cricket world cup. Hollywood movies like “Pirates of the Caribbean”
and “Kung Fu Panda 2” along with Bollywood movies like “Ready”
have been able to significantly pull in audiences. We expect average
occupancy to rise by 7-8 percentage points across multiplexes. ATP
is expected to remain more or less stable QoQ.
Good quarter for Dish TV
Though lower than the previous two quarters buoyed by festive
season and ICC World Cup, Dish TV would continue strong
subscriber addition on the back of higher demand during IPL season
4. The company is expected to add 0.9 million subscribers taking the
total to 11.3 million. The ARPU is expected to grow 1.6% to |152 on
back of recent price hike and increasing share of HD subscribers.
Profitability to show mixed trend
Margins across print and broadcasting players are expected to dip
QoQ as revenue growth hasn’t been able to keep pace with rising
input costs. Print media is expected to suffer the most due to rising
newsprint prices. Only Deccan Chronicle is expected to show a rise
as it suffered negative margins last quarter due to Telangana issues.
Multiplexes would witness margin expansion with rising occupancy
as patrons return to theatres post the ICC World Cup. Dish TV would
continue the margin expansion trend with rising subscriber base
with relatively fixed cost structure. Also, ENIL would witness margin
expansion since the loss making OOH business was hived off. Our
universe coverage EBITDA margin is expected to expand 320 bps
QoQ to 30.3% primarily due to negative base of Deccan Chronicle.
Company specific view
Company Remarks
Cinemax The company rolled out a new property in New Delhi with six new screens and
seating capacity of 1116. After a weak quarter marred by the ICC World Cup,
Q1FY12 would also be weak due to IPL Season 4 in the first two months of the
quarter. Occupancy would increase marginally to ~21.0% while ATP is expected to
be at | 128
DB Corp We expect a modest ad growth of 13.5% YoY mainly due to poor growth in national
ad revenues. Also, a rise in newsprint prices and increased circulation in recently
launched Aurangabad would lead to contraction of margins in this quarter. The
company may slightly delay its plans for a Bihar launch in the wake of declining ad
volumes
Deccan
Chronicle
We expect ad revenue to decline 12.5% YoY over the Telangana issue, which has
vastly affected the company. This, coupled with firming up newsprint prices would
put downward pressure on margins. Our valuation for Deccan Chronicle does not
include the contribution from the sporting venture
Dish TV We expect the company to add 0.9 million subscribers in this quarter backed by
the IPL taking the total subscriber base to 11.3 million. With increasing share of HD
subscribers and recent price hike, we expect ARPU to grow 1.6% to | 152
ENIL We expect a marginal increase in ad rates this quarter. The inventory utilisation is
expected to be better than that of Q1FY11 but not as good as that of Q4FY11. Top
10 stations would have inventory utilisation of about 80% while in the remaining 22
stations it would be about 60%. Realisation per slot is expected to rise to | 283 per
slot from | 280 in the last quarter
HT Media We expect English ad revenues to grow 13.0% YoY and Hindi ad revenues to grow
16.0% YoY. Revenues from the radio segment are expected at | 14.7 crore,
growing 20.0% YoY. Margins would remain under pressure on the back of firm
newsprint prices
Jagran
Prakashan
We expect ad revenues to grow at 10% YoY owing to low national ad growth and
delay in education sector ad spend and slowdown in the auto and BFSI sector.
Jagran took a ~10% price hike in April, which is still not passed on fully. Increase
in newsprint prices is expected to put pressure on the margins
PVR PVR did not roll out any new properties in the last three quarters. Though the
occupancy was affected by IPL season 4, it would still be more than the last
quarter thanks to Hollywood movies like "Pirates of the Caribbean" and "Kung Fu
Panda 2" and Bollywood movies like "Ready" doing well on the box office. We
expect occupancy to rise to 28% from 21% in Q4FY11 and ATP to fall to | 160 from
| 166. We also expect the sale of the Phoenix property to contribute ~ | 10 crore
to the PAT in Q1FY12
Sun TV We expect ad revenues to grow at a very low rate of 4.2% YoY in line with the
slowdown in the entire industry. Sun TV released one mid-sized movie this quarter
with a budget of about | 10.0 crore. After a very healthy growth in the last quarter,
we expect the company to add 0.3 million subscribers in its DTH segment
UTV
Software
UTV released "Thank You" in April 2011, which had a decent performance at the
box office. UTV also launched the game "EL Shaddai" in Japan, which recorded presales
of 2.0 lakh units
Source: Company, ICICIdirect.com Research
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