Media stocks have been buzzing in trade on October 8, bucking the volatility in the broader market as names like PVR Inox, TV Today, and Network18 posted strong gains. The surge in these counters led the Nifty Media index over 3 percent higher, making it the best-performing sectoral index in trade today.
At 1 pm, shares of PVR Inox, TV Today, and Network18 were up 2-3 percent while the Nifty Media index was trading 2.4 percent higher.
"For the last couple of sessions, the media space was under pressure, but after taking support on the 200-day weekly moving average, prices have strongly bounced back," said Rajesh Bhosale, Equity Technical Analyst at Angel Broking.
Going ahead, he sees the index moving in a range of 2,000 - 2,150 points in the near term. Among specific stocks, he is most bullish on Saregama, which also happens to be the top performer in recent times. According to Bhosale, the technical charts of Saregama continue to look attractive, poised for an outperformance in the near term, with the possibility to hit Rs 750.
Another stock that Bhosale finds attractive is Zee Entertainment Enterprises, which is placed around its long-term support zone.
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Meanwhile, with the onset of the Q2 earnings season just around the corner, investors are shifting focus towards the quarterly performances of India Inc. The outlook for media players, though subdued on a year-on-year basis, reflects hope of an improvement sequentially.
Take PVR Inox for example, its stock performance has been tracking box office collections and the upcoming pipeline. After a dull H1CY24, box office collections have picked up and are expected to further improve in Q3 FY25, sparking hopes for a recovery for the multiplex operator.
Meanwhile, Nuvama Institutional Equities also anticipates ad revenues to see gradual improvement in Q3 FY25, 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.
"Additionally, the La Niña effect is expected to boost rural consumption, benefiting advertisers. 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.
On top of that, the recent correction in the sector also gave investors room to lap up shares at much cheaper prices along with reasonable valuations, sparking bottom-fishing in media stocks.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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