Electronic media seen outperforming print media
22 July 2009
The broadcasting or electronic media is expected to score over the print media with higher net profits against a general drop in advertisement revenues, brokerage firm Motilal Oswal said in a pre-earnings report.
Motilal Oswal expects Indian newspaper companies to show a drop in quarterly profits amidst a tight advertisement market despite an improvement in margins helped by cost-cutting measures undertaken by several firms.
Motilal Oswal has projected the April-June net profit of HT Media, which publishes the Hindustan Times and the Mint business newspaper, to fall about 40 per cent to Rs23.2 crore. For Deccan Chronicle, it expects net profit to halve to Rs28.85 crore.
"Print media was not able to attract as much advertising as popularly expected during the elections, as political parties preferred advertising on television and radio," Motilal Oswal said in its report.
In its report released on 16 July, Motilal Oswal, however, recommended a neutral rating on Zee Entertainment.
"Though advertising outlook remains uncertain, two major sports events impacting the viewership of Hindi GECs are behind. Further, improvement in GRPs of flagship channel Zee TV augurs well for the company, as advertisers increase advertising spends during the festival season. We have upgraded our EPS estimates from Rs8.9 to Rs9.2 for FY10 and from Rs11.3 to Rs11.4 for FY11. The stock trades at 19.7x FY10E and 15.9x FY11E earnings. We have a `neutral rating' on the stock and would recommend buying at Rs150 levels," says Motilal Oswal's report.