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Media
ƒ Interest rate hikes and overall slowdown hit ad revenue growth
Media companies are expected to experience subdued growth on the
ad front as corporates cut down their ad spend in the wake of the
economic slowdown. A considerable slowdown is expected to be seen
in the ad spends of FMCG and consumer durables that form a
substantial part of the ad pie. Interest rate sensitive sectors, viz. BFSI,
auto and realty are expected to cut their ad spend pressurising both TV
and print media ad growth. However, print media is expected see a
silver lining in the education sector having delayed their ad spend to
Q2FY12. We expect our media universe to post revenue growth of
14.9% YoY and 1.6% QoQ.
ƒ Multiplex occupancy on the rise
Multiplexes would see a rise in their occupancy as movies like Singham,
Bodyguard, Mere Brother Ki Dulhan and Zindagi Na Milegi Dobara have
succeeded in bringing patrons in good numbers to multiplexes.
According to media sources, the four movies together have already had
box office collections of | 379.7 crore. We expect occupancy to increase
by 2-3 percentage points QoQ. Margins, however, are expected to
remain more or less stable.
ƒ Dish TV – stepping towards consolidation
The DTH industry is expected to add 2.8 million subscribers in Q2FY12.
Due to an increase in prices of set top box in the beginning of Q2FY12,
Dish TV’s share in net additions is expected to dip marginally to 25%,
which amounts to 0.7 million. ARPU is expected to increase from | 150
in Q1FY12 to | 152 in Q2FY12 on account of increasing share of HD
channels.
ƒ Profitability to show mixed trend
Margins across print players are expected to dip QoQ as ad growth for
this quarter has been subdued as compared to the last quarter.
Nonetheless, newsprint prices have been lower than Q1FY12, bringing
relief to players. However, this would be offset by increasing circulation.
Multiplexes, on the other hand, would witness an expansion with rising
occupancy and high operating leverage. Dish TV is expected to see its
subscriber addition dip marginally due to the STB price hike in July
2011. Margins for Dish TV are expected to remain more or less stable
QoQ but improve considerably YoY. EBITDA margin of our coverage
universe is expected to expand by 13 bps QoQ and 85 bps YoY,
predominantly due to improving margins of Dish TV. Leaving Dish TV
out, our margins would have contracted by 108 bps QoQ and 240 bps
YoY.
Company specific view
Company Remarks
Cinemax The company rolled out a new property in Malad, Mumbai with five new screens and
seating capacity of 824 in Q2FY12. Occupancy for the quarter is expected to improve
to 28% from 26% in Q1FY12 as movies like Singham, Bodyguard, etc succeeded in
pulling in patrons. ATP is expected to improve marginally to | 134 from | 132 in
Q1FY12
DB Corp We expect modest ad growth of 12.0% YoY mainly due to the economic slowdown
causing a reduction of ad spend in the industry. Newsprint prices, however, are
expected to have reduced during the quarter but this would be offset by rising
circulation due to full quarter impact of launch in Maharashtra
Dish TV We expect the company to add 0.7 million subscribers in this quarter partly due to
price hike of STB by | 200 in the beginning of the quarter. With increasing share of
HD subscribers and low pack subscribers shifting to higher pack, we expect ARPU to
grow 1.6% to | 152
ENIL We expect ad revenues to grow by 8.1% in Q1FY12 as there has been a slowdown in
the FMCG and consumer durables ad spend. Inventory utilisation is expected to
increase to ~ 61% from both Q2FY11 and Q1FY12. For top 10 stations, inventory
utilisation is expected to be ~74% whereas for the other 22 stations it is expected to
be ~55%. Realisation per slot is expected to fall to | 280 per slot from | 292 in the
last quarter
HT Media We expect English ad revenues to grow 8.0% YoY and Hindi ad revenues to grow
12.0% YoY. Revenues from the radio segment are expected at | 22.6 crore, growing
60.0% YoY. Margins are expected to remain under pressure on the back of lower ad
revenue growth and increase in circulation
Jagran
Prakashan
We expect ad revenues to grow at 9.0% YoY owing to the economic slowdown
leading to lower ad spend in the industry. However, newsprint costs are expected to
decrease due to a reduction in newsprint prices. Margins are expected to remain
under pressure due to low ad revenue growth
PVR Led by good quality of content like Singham and Bodyguard, occupancy is expected
to increase to 33% from 29% in Q4FY11. ATP and SPH are expected to remain stable
in this quarter. The EBITDA margin is expected to have improved from 17% to ~21%.
However, PVR did not roll out any new property in this quarter
Source: Company, ICICIdirect.com Research
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