X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
TV broadcasting: Who's been the best - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 14, 2007

    TV broadcasting: Who's been the best

    The Indian Media and Entertainment sector is witnessing robust growth due to increase in disposable incomes, surge in ad spends, liberalization of investment norms in media and entertainment companies and the rollout of CAS and DTH .The television sector, which is the largest sub segment of the Indian media and entertainment industry is expected to grow at a CAGR of 22% from 2006 to 2011 as per the FICCI PWC report on the Indian Entertainment and Media industry.

    Although stocks from the television sector did not participate in the current rally that is being witnessed on the bourses, they were one of the most sought after stocks for a brief period of time before the current rally took off. In this context, let us see how some of the top names in this space viz. Zee, Balaji, NDTV, TV18 and UTV have performed on the bourses over a three year period between 1st Nov 2004 and 1st Nov 2007 and likely reasons behind the same.

    The above graph shows that if Rs 100 was invested on 1st Nov 2004 in the BSE-Sensex and various media companies namely Zee Entertainment, Balaji Telefilms, TV 18, NDTV, UTV (UTV got listed on the bourses in March 2005) how much that amount would be worth on 1st Nov 2007.

    The graph clearly shows that most of the media stocks have performed better than the benchmark index during this period. The Indian economy has broken fresh grounds in the past few years, registering growth rates in the range of 9%. Since the media and entertainment sector grows faster than the overall economy in buoyant times, it has resulted into buoyant growth in adspends and some well-entrenched players have been able to capitalise on the opportunity.

    The table below shows the growth in the television and media sector from 2004 to 2007.

    (Rs bn) 2004 2005 2006 2007 CAGR (%)
    Television Sector 129 159 191 220 19.5%
    Media Sector 312 364 437 501 17.1%

    TV18 The runaway winner:
    The best performing stock has been TV 18.Its stock price has appreciated close to nine times in the last 3 years, significantly higher than the Sensex, where gains stood at around 3.5x. In the last three years, the stock markets surged and the interest of the Indian retail investors in the stock markets increased. This helped in increasing the viewership ratings of the flagship channel CNBC TV 18. Besides this, CNBC TV 18 is the clear market leader in the business news and the stock market news segment. It is expected to be the biggest beneficiary of the rollout of CAS and DTH. The expenditure of retail investors on monthly subscription of financial newspapers is much more than the subscription charges of TV 18. Bridging this gap would help TV 18 to increase its subscription revenues substantially going forward.

    Balaji The laggard:
    Though the stock of Balaji Telefilms has appreciated 3 times in the last 3 years, it is the only one in our pack that has underperformed the BSE Sensex, albeit marginally. This is despite the fact that the company's programmes account for more than 40 of the top 100 programmes in the Hindi mass entertainment genre. However the TRP's of its best performing serials, 'Kyunki Saas Bhi Kabhi Bahu Thi',' Kahaani Ghar Ghar Kii' have been declining in the last three years. The programming hours of the company are stagnating though it has been able to increase its realizations per hour. The entry of more channels in the Hindi GEC space would help Balaji in increasing its programming hours and its realizations per hour. Its entry into new businesses of movie production and distribution, regional broadcasting in a JV with Star and overseas programming would help in diversifying its revenue streams and reduce its dependence on the Hindi general entertainment space.

    Finally, a word on Zee. Although the stock has managed to outperform the Sensex marginally, it should be borne in mind that the company underwent a restructuring whereby it was spun off into four different entities. Therefore if one considers the market value of the spun off entities, then the magnitude of outperformance vis-a-vis the Sensex will definitely rise.

    We remain positive on the overall media and entertainment sector. However, only those companies, which are able to adapt quickly to the changing times and are not subject to irrational competition would continue to do well.

     

     

    Equitymaster requests your view! Post a comment on "TV broadcasting: Who's been the best". Click here!

      
     

    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Taxes, lower other income mar bottomline (Quarterly Results Update - Detailed)

    Feb 3, 2016

    Zee Entertainment has announced the third quarter results of financial year 2015-2016 (3QFY16). While the topline grew by 17% YoY, bottomline fell 11% YoY during the quarter.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE TECK


    Aug 21, 2017 03:37 PM

    S&P BSE TECK 5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS