Q4FY12 Results Preview Media Nothing positive in store ::Centrum

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Q4FY12 Results Preview

Media

Nothing positive in store

We expect Q4FY12 results to be lacklustre on the back of weak advertising environment coupled with economic slowdown. Ad revenue is expected to de-grow for broadcasting companies while print companies are expected to post 9-15% growth. Margins are expected to shrink on the back of high cost which would impact profitability. We expect positive surprises from ENIL and Info Edge and negative surprises from ZEEL and Sun TV Network.

m  Revenues to de-grow: We expect disappointing numbers from media companies on the back of economic slowdown coupled with the seasonally weak quarter. Broadcasting companies like Sun TV and ZEEL are expected to post 10% and 19% de-growth in ad revenues respectively while print companies are expected to post 9-15% growth in ad revenues. Overall, our coverage universe will grow by more 2.7% YoY but remain flat sequentially.

m  Subscription revenues to grow marginally: ZEEL is expected to post marginal growth sequentially in subscription revenues where as Sun TV is expected to  
de-grow its analog subscription revenues. Dish TV is expected to report slow subscriber addition which would impact its subscription revenues.

m  Margins under pressure: Margins are expected to shrink 223bps YoY for our coverage companies. Both print & broadcasting companies are expected to report margin contraction. Info Edge and Dish TV are expected to register the maximum rise in margins.

m  Profits to decline: PAT for our coverage universe is expected to de-grow by 21% YoY and 5% QoQ. The print sector is expected to outperform the broadcasting space due to higher ad revenue growth. Base effect is also expected to impact broadcasting companies.

m  Equal weight on the sector: Maintain Buy on Dish TV,
Sun TV, Jagran Prakashan, ENIL, ZEEL, HT Media and ENIL. We have a Hold on Balaji Telefilms and Sell on Info Edge.

Thanks & Regards,