Media sector results preview for Mar FY12: P Lilladher

Prabhudas Lilladher has come with its quarterly earning estimates on media & entertainment sector for March 2012. Ad spends continued to remain muted during the quarter across television and print media. The TV space continues to be a 4-player battle for leadership, pushing costs structurally upwards both, on satellite rights as well as core programming.

The Hindi GEC space has seen intensifying competition, with Star Plus continuing to lead. However, Zee recently upped the ante by increasing the spends on its nonsports programming as well as joining its competitors in bidding aggressively for satellite rights (Don 2, Agneepath, Agent Vinod etc.). Strong performance of fiction programming like Pavitra Rishta and Yahan Mein Ghar Ghar Kheli as well as the relaunch of weaker slots has helped the rating improvement at Zee TV.

While overall the print media ad spends remained slow during the quarter, both Jagran and HT Media were helped by the UP elections. We expect ad revenue growth of 12%/ 14%/ 12% for DB Corp/ Jagran Prakashan/ HT Media, respectively, with HT Media seeing significant growth from the UP elections off a lower base than Jagran. Ad revenue growth continues to be driven primarily by volume growth, with Jagran also looking at volumes to drive growth after focusing on yield improvement in H1FY12.

Newsprint prices continued to remain stable helping mitigate the margin impact of increased consumption for players with new editions. With the highest component of imported newsprint, HT Media will see the greatest impact of sustained strength in the USD v/s INR. However, the full impact will be seen only in Q1FY12 as HT Media has hedged its exposure up to February 2012.

Summary Financials - Quarterly (Rs mn)

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