Media stocks slip on negative outlook by India Ratings

Stocks tumble between 3-13%

Media stocks were under pressure in today's trade as a report put out by India Ratings has a negative outlook for the media & entertainment (M&E) sector for H113, as moderate economic growth and cost reduction initiatives by corporates are leading to sluggish growth in advertising spending (ad-spend). The outlook is stable for H213, as the Indian economy is likely to start picking up thus driving higher ad-spend.

The report states that TV broadcasters and multi-system operators (MSOs) are expected to benefit due to mandatory digitisation as local cable operators (LCOs) will not be able to underreport subscriber numbers.

On the margin front, the agency expects margin pressure on the print media industry to remain for most of the year. A continuation of the current economic slowdown, muted corporate growth and stressed margins may put pressure on adspend growth, thus further aggravating problems for the industry, the report notes.

The top losers from the media space in the noon deals were TV18 Broadcast which slumped 13%, Network 18 Media lost 6% followed by Dish TV, Fame India, NDTV, Reliance Broadcast, TV Today Network all down 3-4%.