The recent demonetisation move is expected to impact on Q3FY17 performance. We estimate our media universe to report tepid revenue growth of 2.2% y-o-y (15.0% in Q2FY17) and subdued 0.9% y-o-y Ebitda growth (24.1% in Q2FY17).
The recent demonetisation move is expected to impact on Q3FY17 performance. We estimate our media universe to report tepid revenue growth of 2.2% y-o-y (15.0% in Q2FY17) and subdued 0.9% y-o-y Ebitda growth (24.1% in Q2FY17). Ad revenues of both national advertisers (withheld ad-spends due to the dip in consumer demand in wholesale channels) and local advertisers (grappled with liquidity crunch) were impacted.
However, e-wallets (Paytm, MobiKwik) ramped up their ad spends followed by government and BFSI (bank wallets). Pick-up in FTA channels, Reliance Jio’s 4G launch and revival of ad spends by FMCG companies are expected to fuel ad growth going ahead. In spite of demonetisation, multiplexes are expected to report reasonable growth aided by expansion and strong movies like Dangal and MS Dhoni. Though demonetisation marred growth across companies, we expect this to be a temporary blip and expect growth to revive partially in Q4FY17.
Ad growth muted; subscription revenue to do better: We expect ZEE to clock 1% y-o-y ad growth on high base of 26.8% (15.7% y-o-y growth in Q2FY17 on base of 32.4% y-o-y growth). We estimate Sun TV to report 4% y-o-y dip in ad growth on low base of 2.2% y-o-y in spite of some market share gains in Telugu market. DB Corp and Jagran Prakashan will report low single-digit print ad growth. Not impacted much by demonetisation, we expect ZEE and Sun TV to record subscription growth of 10% and 12% y-o-y, respectively. Dish TV’s subscription revenue is expected to be flattish q-o-q. We expect PVR to report lower LTL footfall and ATP. Partial monetisation of Phase III subscribers will result in slightly higher subscription revenue for MSOs.
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Margins to be soft: ZEE’s sport profit is expected to be ~ R50 million as there was no India series in Q3FY17. However, we estimate overall Ebitda margin at 27.0% (similar margin in Q3FY16). Dish TV is estimated to report Ebitda margin of 32.5% (33.9% in Q2FY17) impacted by lower revenue growth. DB Corp and Jagran Prakashan will also see 40 bps y-o-y dip in margins.