Motilal Oswal has come out with its earnings estimates on media sector for December quarter FY13. According to research firm, the broadcasting companies are expected to report strong YoY advertising growth given higher exposure to consumer sector and a low base. We expect Zee to post the highest ad growth at 29%, while Sun TV's ad revenues are expected to grow at 12% YoY. Print universe ad growth is expected to improve from 0% in 1HFY13 to 4% in 3QFY13.
We expect DTH subscriber additions to improve QoQ due to festive demand and benefit of digitization in the metros. However, our industry
interactions indicate lower-than-expected gains for DTH v/s cable. We have lowered 3Q gross addition estimates for Dish TV from 1.2m to 0.9m.
Government has reiterated the March 2013 timeline for digitization in 38 phase II cities. While there could be a 3 to 6-month delay, smooth implementation of digitization in the metros has raised confidence on a smooth pan-India transition by 2014-15.
Ad revenue trends seem to be improving. We believe that the print media sector offers an excellent play on economic rebound given the ad-heavy business model and higher dependence on cyclical categories. Digitization remains a strong theme for broadcasting and distribution companies as the government remains committed to digitization timelines.
| Sales (Rs in mn) | Net Profit (Rs in mn) | |||
| Dec. 2012 | % Chg QoQ | Dec. 2012 | % Chg QoQ | |
| DB Corp | 4,211 | 11.3 | 671 | 38.1 |
| Dish TV | 5,680 | 6.4 | -256 | Loss |
| HT Media | 5,545 | 8.6 | 534 | 60.2 |
| Jagran Prakashan | 3,480 | 8 | 582 | 19.6 |
| Sun TV | 4,836 | 11.6 | 1,775 | 17.1 |
| Zee Entertainment | 9,330 | -2.2 | 1,835 | -2.2 |
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