Elara predicts mixed quarter for Indian M&E, Internet sectors

Elara Securities released a quarterly preview for the Media & Entertainment (M&E) and Internet sectors in India, highlighting a mixed outlook with the upcoming elections offering a temporary respite for some companies.

The report acknowledges a decline in ad spending across sectors like telecom, education, and eCommerce, with FMCG being the only bright spot. This slowdown is expected to impact Zee Entertainment and Sun TV, which might see declining ad revenue due to a lack of blockbuster movies and limited market share gains outside their core genres.

However, TV Today is expected to buck the trend with a rise in ad revenue fueled by election spending. Similarly, DB Corp is likely to witness a surge in print and radio ad revenue due to election campaigns, partially offsetting declines in their digital revenue.

The report also dives into specific companies:

Zomato: Zomato's revenue is expected to jump 54% year-on-year (YoY) due to higher platform fees and ad revenue. Their extensive restaurant network is expected to maintain their competitive edge in the delivery segment.

Sun TV & Zee Entertainment: Subscription revenue for these giants might grow with the implementation of a new pricing structure, but ad revenue is predicted to decline.

Affle India: Affle India's overall revenue is expected to surge 38% YoY, driven by both organic and inorganic growth. Entertainment Network (ENIL): ENIL's revenue is expected to witness a 31% YoY growth, fueled by election campaigns and the recent acquisition of Gaana.

Elara Securities' report paints a picture of a mixed bag for the M&E and Internet sectors. While the election season offers a temporary boost for some companies, others continue to grapple with headwinds.