PVR, Hathway to fare better than print, TV peers

Multiplexes and cable firms will see less fallout from note ban, hence expected to do better

Demonetisation will impact December quarter (Q3) results of media companies in inconsistent ways. Companies depending on advertisement revenues will see more impact, on toned-down ad spends after note ban. These include print and television companies DB Corp, Jagran Prakashan, Zee Entertainment Enterprises, Sun TV. "We expect a one per cent year-on-year decline in ad revenue in Q3 versus earlier expectation of 10 per cent growth," says Rohit Dokania of IDFC Securities.

Jagran's print ad revenues are likely to grow three-four per cent over a year ago even as its listed peers could witness sluggishness. Increased ad spends ahead of Uttar Pradesh elections will help Jagran sail through, given its higher revenues from the state. Overall revenues could grow faster at Sun TV, given lower dependence on ad revenues as compared to Zee. Ads form two-thirds of Zee's revenues and half of Sun's. Continued healthy growth in subscription revenues might only partly offset falling ad spend. Earnings performance is likely to be subdued for these, with the exception of Jagran. Distribution (cable, direct-to-home) and multiplexes have little exposure to ad revenues and, hence, will do better than broadcasters and print companies. Cable firms Hathway Cable and Den Networks could have seen higher advance payments by customers dumping banned notes. Besides this, partial monetisation of Phase-III of digitisation and stable average revenue per user (Arpu) in Phase-I and Phase-II markets will rub off on revenues. These could offset slower subscriber additions due to demonetisation, believe analysts.

Direct-to-home player Dish TV had seen a fall in subscriber additions as well as recharges, which could impact its subscription revenues as well as Arpu in Q3.   

Multiplexes such as PVR and Inox Leisure continued to do well in Q3 on incentives to book tickets online. Though footfall might slow, addition of screens and good show of new releases are positives. Higher base effect of a year ago will impact Q3 growth.