Entertainment stocks no more captivates

Written by Markets Bureau | Mumbai, Jul 3 | Updated: Jul 5 2008, 04:51am hrs
The rising inflation, which is partly contributing to the fall in the markets, is playing spoilsport to high-beta stocks of the entertainment sector. Many of the stocks of this sector which managed to outperform the benchmark indices in the beginning of the year, are slipping deep into the red.

Many of these companies have dip in the range of 10% to 40% in the last one month underperforming the benchmark indices which has dipped by around 15%. Some experts tracking the sector believe that the Indian film industry in the past few months have failed to meet with the expectations of the masses giving more flops than hits keeping the audiences at bay thus denting the profitability of the companies directly related to the movie business.

An analyst at a leading broking firm said, These stocks have high beta value with respect to the benchmark indices and are considered as high-risk high-return counters. Even when the benchmark indices tested dust in the beginning of the year, the film-oriented companies were really doing well as the sector is totally domestically driven. But as the fears of inflation started erupting this sector seems to be the most vulnerable sector having a direct impact on the top line of these companies.

On Thursday too, when the benchmark index was down over 4%, the stock of Cyber Media India Ltd, a company having its presence into various mass mediums lost the most, paring Rs 7.25 or 15.26% before finally trading at Rs40.25. BAG Films followed suit dipping by Rs 3.55 or 11.89% to end the day at Rs26.30. Even Anil Ambani-owned Adlabs Films Ltd shed Rs 42 or 10.67% to close the day at Rs 355.95.

Other stocks to follow the trend which lost heavily in the range of 7-10% were Mukta Arts, Balaji Telefilms, TV Today, Tips Industries, TV 18, Pritish Nandy Communication (PNC), Sun TV, Raj Television, Media matrix, Garnet International, etc.