Nifty Media bucks muted market sentiment, jumps 2%; PVR Inox, DEN Networks lead gains

ICICI Securities is bullish on media stocks, maintaining its 'buy' rating on PVR Inox, Sun TV, and Zee Entertainment.

The Nifty Media index registered gains of almost two percent in trade on December 17, trading firmly in the green despite a sour market sentiment. The index extended its gains for the second consecutive session, after snapping a six-day losing streak yesterday.

Counters such as PVR Inox and DEN Networks posted strong gains, making it among the best performing sectoral indices in trade today. At 12 noon, shares of PVR Inox, DEN Networks and Saregama surged over two percent each, with Zee Entertainment, Nazara Tech and Dish TV also in the green.

PVR Inox, along with other multiplexes and single screen theatres, are pinning hopes on the success of Allu Arjun's Pushpa 2, to lift their fortunes in the October December quarter. Given the domestic and international collections, the movie is expected to lift the sentiment for  top multiplexes.

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According to a report by PwC India, the domestic advertising market is projected to grow at a 9.4 percent CAGR to Rs 1.58 lakh crore by CY2028. Digital advertising will lead with a 15.6 percent CAGR to Rs 85,000 crore, while traditional TV advertising will grow at 4.2 percent CAGR.

After a lacklustre H1FY25, Nuvama Institutional Equities anticipates ad revenues to see gradual improvement in Q3FY25, driven by the festive and wedding season, as consumer companies typically ramp up ad spending during this period. This uptick in ad revenues is seen as a positive for broadcasting companies like Network18, Zee Entertainment, and Sun TV Network.

"For multiplexes, we project blockbuster results in Q3 FY25, fueled by a strong lineup of films across various genres during the festive season," Nuvama added.

Domestic brokerage ICICI Securities is bullish on media stocks, maintaining its 'buy' rating on PVR Inox, Sun TV, and Zee Entertainment Ltd. The brokerage has a share price target of Rs 2,250, Rs 1,111 and Rs 195 for each player, respectively.

Further, the media sector will be in focus as the Parliamentary Standing Committee on Communications and Information Technology will discuss the "Emergence of OTT Platforms and Related Issues" on December 20, 2024.

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