First half of the current fiscal year was dull for the sector on the back of cut in advertisement expenditure by corporates and the two-month long deadlock between producers and film exhibitors. However, one can expect significant recovery in H2FY10. With stabilization of the economy and restoration of consumer spending power, the advertisement spends of India Inc. are picking up. Automobile, BFSI, IPOs and Realty are the sectors which are showing renewed interest. The DTH industry is expected to add significant number of subscribers in coming years which would further drive growth in subscription revenues of channels. In coming months we may witness the upward revision in advertisement charges which can be a kicker to the sector. In the entertainment segment as well the strong movie pipeline over the next three months are likely to improve occupancy rates of multiplexes.
We believe the regional and rural media players are likely to outperform the general entertainment category. Hence we remain positive on Sun TV and Zee Entertainment (after restructuring). The outlook for regional print remains sanguine due to cost effectiveness and ever-increasing rural literate population. Hence, Jagran Prakashan and Deccan Chronicle are our top picks in the segment. In broadcasting we like TV Today because of the undisputed leadership position of ‘Aaj Tak’ in Hindi news channel. Cinema remains the principal source of entertainment for our population. Through changing life style and increasing aspiration levels of our young population, multiplexes are likely to get more business going forward. With an established leadership position, robust expansion plans, possible merger with DT Cinemas and a string of new releases in the pipeline, PVR in the multiplexes segment, is a screaming buy for investors.
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