The media sector, as a whole, saw more positives compared to H1FY21 during the festive quarter. Broadcasters, in a relatively better position compared to peers, are expected to maintain subscription growth while ad volumes are also in a recovery mode. However, ad realisations continued to be a concern. While reopening of cinemas was permitted from October 15 onwards, lack of new and big budget movies coupled with prevailing Covid-19 situation garnered a lukewarm response from the audience.
Ad scenario improves for broadcasters; digital growth key
Original programming of GECs coupled with festive boost led to recovery in ad volumes sequentially. However, ad realisations were under pressure given macroeconomic scenario has not yet fully normalised. Consequently, revenues are likely to remain muted during the quarter. We expect Zee to witness ad growth given recovery in GEC market share and festivities. Sun TV ad revenue is estimated to de-grow on account of lower viewership and slower pickup in ad volume. Again, the saving grace for broadcasters will be continued growth in subscription revenue, led by digital platforms. Zee ad revenue is expected to witness ~2% YoY growth. The reported subscription growth is expected at ~12% YoY, also aided by realignment of music revenues. The like-to-like subscription growth is expected at ~5% YoY. We expect EBITDA margins to fall 110 bps YoY to 26.5% owing to increase in operational cost. Sun TV is expected to report ad revenue decline of 4% YoY while subscription revenues are expected to grow ~8% YoY. We expect EBITDA margin (ex-IPL) at 68.7%, down 250 bps YoY due to higher content and other costs. We expect news viewership to remain firm given news-heavy events like a state election and farmers' protest. TV Today is likely to report ~5% YoY TV broadcasting revenue growth. Digital revenues are expected to continue growth trajectory with 15% YoY growth. EBITDA is expected to grow ~4% YoY to Rs. 63 crore while EBITDA margin is expected to be at 28% (up 70 bps YoY).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Media_Q3FY21.pdf