The Nifty Media Index fell the most in early trading Wednesday, falling nearly 4%, and then rebounded sharply, closing up 3%. Due to the pressure of advertising revenue, the uncertainty of the subscription market, and the sharp decline in advertising revenue, the industry (including broadcasters, multi-channel operators and print media) was most affected by the COVID-19 epidemic and subsequent blockades. People flow.
Although the broader market has also picked up, Elara Capital's Karan Taurani said the sector's valuation is attractive and its current level of downside seems limited. He added that some participants were valued below the average during the 2008 financial crisis. The highest weighted Zee Entertainment in the index fell 50% that month, while PVR fell 32% over the same period.
Although most brokers are optimistic about the structural growth of diversified participants relative to other market segments, they will suffer most of the pain in the short term. In view of the lock-in factor, the brokerage firm revised its forecast for passenger traffic growth in FY21 from 8-12% to only 1-2%. Release schedule.
But analysts said that there could be a lot of movies starting in the September quarter, which could make up for some of the losses. In terms of cost, it is expected to ease, especially in the field of rents (18-20% of sales). The sharp decline in advertising growth is expected to weaken revenue in the June quarter and fiscal year 21.
Analysts expect subscription revenue to remain stable, but uncertainty over the new tariff order could dampen growth. Given revenue pressures, analysts expect current investment in overpaid or OTT content to lag behind. The boom of digital media and large investments are expected to weaken recent profitability. Although brokerages expect a rebound in the second quarter of fiscal year 21, analysts do not expect a sharp rebound like in 2008, when the rebound was V. & # 39; taking shape.