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India Equity Research Reports, IPO and Stock News
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Limited surprises
Only Zee Entertainment to post earnings growth
We see limited revenue growth momentum in Q3FY12E for
broadcasters, notwithstanding the recently concluded festival season,
as ad growth pick-up post festival season remains weak, even as
subscription growth pick-up waits to happen post first phase of
digitization (June, 30th). However, base effect is expected to help Zee
Entertainment positively, as earnings in Q3FY11E were highly
depressed on sports business losses. On the other hand, Sun TV
Network will be impacted adversely by the base effect as it released its
successful movie ‘Endhiran’ in the same quarter last year. TV18
Broadcast is expected to post minor loss due to launch of new
channels during the quarter, even as ad growth may pick-up
sequentially.
Another painful quarter for print media
Though print players would see low double digit ad revenue growth
for the quarter, elevated newsprint prices on steep rupee depreciation
are expected to offset any operating leverage. All print players except
HMVL are expected to post moderate to negative earnings growth.
We expect HMVL to post another quarter of robust earnings growth
on low base and HT media to post a steep fall in earnings on a high
base. Further investment in circulation would be a key observable
event post results.
Valuation
While most media stocks are trading at attractive valuations, Q3FY12E
results are expected to provide limited triggers to stock prices, as
modest ad revenue growth trend is now expected to spread into
FY13E as well. We continue to like players with high exposure to
distribution revenues and strong presence in the value chain, as we
expect subscription revenues in the pay TV space to pick up from
Q1FY13E onwards, even as ad revenue growth remains doubtful.
Trend in newsprint prices would be another trigger for print stocks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Limited surprises
Only Zee Entertainment to post earnings growth
We see limited revenue growth momentum in Q3FY12E for
broadcasters, notwithstanding the recently concluded festival season,
as ad growth pick-up post festival season remains weak, even as
subscription growth pick-up waits to happen post first phase of
digitization (June, 30th). However, base effect is expected to help Zee
Entertainment positively, as earnings in Q3FY11E were highly
depressed on sports business losses. On the other hand, Sun TV
Network will be impacted adversely by the base effect as it released its
successful movie ‘Endhiran’ in the same quarter last year. TV18
Broadcast is expected to post minor loss due to launch of new
channels during the quarter, even as ad growth may pick-up
sequentially.
Another painful quarter for print media
Though print players would see low double digit ad revenue growth
for the quarter, elevated newsprint prices on steep rupee depreciation
are expected to offset any operating leverage. All print players except
HMVL are expected to post moderate to negative earnings growth.
We expect HMVL to post another quarter of robust earnings growth
on low base and HT media to post a steep fall in earnings on a high
base. Further investment in circulation would be a key observable
event post results.
Valuation
While most media stocks are trading at attractive valuations, Q3FY12E
results are expected to provide limited triggers to stock prices, as
modest ad revenue growth trend is now expected to spread into
FY13E as well. We continue to like players with high exposure to
distribution revenues and strong presence in the value chain, as we
expect subscription revenues in the pay TV space to pick up from
Q1FY13E onwards, even as ad revenue growth remains doubtful.
Trend in newsprint prices would be another trigger for print stocks.
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