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After performing in line with the NSE Nifty 50 benchmark, up 20 per cent for the calendar year 2023, the Nifty Media index has seen a drastic change in fortune and so far in 2024 has been one of the worst sectoral performers.
The Nifty Media index has plunged nearly 24 per cent so far in 2024, mainly on account of a 50 per cent fall in shares of Zee Entertainment. That apart, PVRInox, Nazara Technologies, NDTV and Sun TV Network are down 17-22 per cent each. In comparison, the Nifty 50 scaled fresh life-time highs, and quotes 1 per cent higher.
Analysts attribute the recent under-performance of the sector to the fall-out of Zee-Sony India merger deal and expect sentiment at these counters to remain tepid.
UR Bhatt, co-Founder and Director of Alphaniti Fintech believes that IPL may lift the mood up to certain extent for select listed players. However, only a settlement or solution to the Zee-Sony India merger deal, and also the recent Zee-Star India arbitration over the ICC TV rights deal can help revive the sentiment at media stocks. Till such time, the sector may remain out of favour.
Similarly, experts also recommend that Reliance may be the key beneficiary owing to the IPL. However, given the recent deal and significant investment for the Disney deal, gains from the IPL 2024 season seem unlikely. Whereas, advertisement fillip given the election spends may provide earnings boost for media sector.
Devarsh Vakil, Deputy Head - Retail Research at HDFC Securities, says that media and entertainment sector reported a robust growth of lower double-digits both in terms of revenue and profit in Q3FY24, buoyed by an increase in content consumption across platforms during the festive season.
The brokerage firm remains constructive on the sector owing to multiple tailwinds such as increasing internet penetration, higher content consumption through social media, rise of OTT platforms and increase in advertisement spends on account of general elections and IPL.
The mega-merger between Reliance and Disney is expected to be in the limelight for the sector, after the failure of Zee-Sony deal. The Reliance-Disney powerhouse could shape the pricing and content acquisition, going forward as it commands a combined market share of 40-45 per cent across broadcasting and digital media, subject to regulatory approvals, Devarsh Vakil added.
Meanwhile, here's how select media shares are placed on the technical charts.
Nifty Media
Current Level: 1,840
Downside Risk: 13.6%
Resistance: 2,020
Chart suggests that the Nifty Media index is clearly trading with a negative bias, as the index languishes below key moving averages on the daily and weekly scales. CLICK HERE FOR THE CHART
At present levels, the index is seen testing the long-term trend line support at 1,804-odd levels. However, key momentum oscillators on the long-term chart have turned negative; hence it is possible that the index may break this support. As and when that happens, it potentially opens the door for a decline towards 1,590 levels - i.e. a downside risk of another 13.6 per cent.
Having said that, the momentum oscillators on the daily scale are seen languishing in oversold zones. Hence, some pullback from current levels seems likely at first. As such, the Nifty Media index can potentially rally to 2,020 levels, in order to test the 20-DMA (Daily Moving Average).
Zee Entertainment
Current Price: Rs 144
Support: Rs 110
Resistance: Rs 159; Rs 169
Zee Entertainment needs to trade consistently above Rs 148 in order for a short-term sentiment boost. In which, case, the stock can potentially rally towards its 20-DMA at Rs 159, or slightly higher towards the trend line resistance at Rs 169.
However, the overall bias for the stock remains negative and the stock may languish in the zone of Rs 110 - Rs 170, until a new trend emerges. CLICK HERE FOR THE CHART
PVRInox
Current Price: Rs 1,310
Support: Rs 1,280
Resistance: Rs 1,370
Shares of PVRInox are seen testing support on the long-term chart at Rs 1,280-odd levels. The stock needs to sustain consistently above Rs 1,305 in order to revive the mood at the counter. However, fresh strength can be expected only in case of sustained trade above its 20-DMA, which stands at Rs 1,370. CLICK HERE FOR THE CHART
Sun TV Network
Current Price: Rs 594
Downside Risk: 12.5%
Support: Rs 580
Resistance: Rs 595; Rs 616
Sun TV Network is seen trading below its long-term moving (200-DMA) for the last four trading sessions. The short-term price to moving averages action is also clearly negative, with the 20-DMA below 50-DMA. CLICK HERE FOR THE CHART
The 200-DMA at Rs 595 followed by the 20-DMA at Rs 616 are the likely immediate hurdles for the stock. On the other hand, sustained trade below Rs 580 levels can trigger a fall towards Rs 520 levels.
NDTV
Current Price: Rs 217
Upside Potential: 13.8%
Support: Rs 207; Rs 203
NDTV can be a counter-bet in the media sector. The stock seems to have tested the trend line support on the weekly scale at Rs 1,203 levels. Post which, select momentum oscillators have turned favourable on the daily scale.
Going ahead, the Rs 203-207 area is expected to act as a support zone for the stock. On the upside, the stock can pullback to its 20-DMA at Rs 235, with a potential extension towards its 50-DMA at Rs 247. CLICK HERE FOR THE CHART
Nazara Technologies
Current Price: Rs 668
Downside Risk: 10.2%
Resistance: Rs 690; Rs 730
Nazara Technologies seems to be in pullback mode. The stock after a steep 37 per cent fall in the last two months has bounced back 8 per cent from its recent low of Rs 620. The pullback is expected to meet strong resistance around Rs 690 followed by the 20-DMA at Rs 730 levels. CLICK HERE FOR THE CHART
The DI (Directional Index) indicates that the bears are fairly stronger at this point of time. Hence, the stock could witness heavy sell-off in case of weakness. On the downside, the stock can slide towards Rs 600-mark.
