banner image banner image
 

Media universe’s ad growth pegged at 9.5% in Q2FY19E: I-Sec quarterly preview

The media universe is expected to report 9.5 per cent ad growth in Q2FY19E amidst a weak ad environment along with impact of early festival season in the base (Q2FY18), as per a quarterly results preview on the media sector done by ICICI Securities (I-Sec). 

According to the report, broadcasters, especially ones with strong GEC portfolio are expected to register strong growth. Print players are likely to continue their weak performance (top-line), with continued high newsprint prices expected to keep margins under pressure. However, DB Corp will likely gain from political advertising, given the upcoming elections in its key markets – Madhya Pradesh, Chhattisgarh and Rajasthan. I-Sec expects Zee Entertainment Enterprises Lit (ZEEL), Sun TV and Dish TV to report strong results in Q2FY19, while performance of print and radio players is expected to remain weak. 

Quarterly summary

 

Company

(Rs mn)

Sales

EBITDA

PAT

JAS-18*

% chg

JAS-18*

% chg

JAS-18*

% chg

(YoY)

(QoQ)

(YoY)

(QoQ)

(YoY)

(QoQ)

DB Corp

6,043

6.3

(4.4)

1,296

(7.3)

(22.8)

730

(7.2)

(25.2)

Dish TV

16,907

125.8

2.1

5,664

162.1

1.7

567

NM

103.3

ENIL

1,220

(3.0)

0.3

285

0.2

0.3

92

54.1

(0.5)

HMVL

2,042

(3.2)

(9.9)

102

(77.5)

(47.3)

79

(80.7)

(40.3)

HT Media

5,290

(5.6)

(2.5)

238

(77.2)

(33.9)

28

(95.6)

(51.5)

Jagran Prakashan

5,634

(0.5)

(6.5)

1,198

(13.6)

(35.5)

551

(20.7)

(35.5)

Sun TV Network

7,715

14.1

(31.1)

5,552

11.9

(24.4)

3,111

9.3

(24.0)

TV Today Network

1,801

24.7

(1.0)

585

22.4

(7.9)

375

26.3

(8.6)

Zee Entertainment

18,326

15.8

3.4

5,773

17.5

2.1

3,724

26.0

14.1

* July-August-September’18 
Source: I-Sec research

ZEEL – Strong channel performance to boost ad growth: As per the report, ZEEL is expected to register strong domestic ad growth of 20 per cent, driven by improved viewership share across markets. Subscription revenue is estimated to grow 10 per cent YoY. Despite strong top-line growth, higher content and marketing costs are expected to restrict YoY EBITDA margin expansion to mere 50bps to 31.5 per cent. 

Sun TV and TV Today to register healthy growth – As per the report, Sun TV is expected to clock ad growth of 15 per cent and subscription revenue growth of 15 per cent YoY; investment in new channels is likely to result in 140bps YoY contraction in EBITDA margin to 72 per cent. TV Today is estimated to register 12.6 per cent like-for-like (TV and radio) revenue growth in Q2FY19 (25 per cent reported growth, including digital). 

Dish TV – Strong performance of Q1FY19 will continue. ARPU is estimated to increase to Rs 216 (+1 per cent QoQ) and net subscriber addition of 325k (300k in Q1FY19). Subscription revenue is estimated to grow 2 per cent QoQ, while EBITDA margin is estimated to remain flat QoQ at 33.5 per cent. 

Print – Double whammy of weak ad growth and high newsprint prices will continue. Hindi print players Hindustan Media Ventures and Jagran Prakashan are expected to report de-growth of 4 per cent and 5 per cent in print ad revenue, respectively. DB Corp is expected to register 6 per cent print ad growth with likely benefit from upcoming elections in its key markets. HT Media’s English print ad revenue is expected to decline 5+ per cent YoY. DB Corp is expected to witness 8 per cent growth in circulation revenue; HT Media’s circulation revenue is expected to see degrowth of -1 per cent; while Jagran Prakashan is expected to see a growth of 2 per cent in its circulation revenue. 

Continued high newsprint prices are expected to keep margins under pressure. 

ENIL – Weak performance is likely to continue: ENIL is expected to continue to see weak performance, with 3 per cent decline in revenue and flat EBITDA. Radio businesses of DB Corp, Jagran Prakashan and HT Media are expected to report growth of 9 per cent, 7 per cent and 8 per cent, respectively.

Media
@adgully

News in the domain of Advertising, Marketing, Media and Business of Entertainment

More in Media