Shares of media corporations have been underneath stress with Nifty Media index tanked 5% in intra-day commerce, hitting 20-month low on the Nationwide Inventory Change (NSE) on development considerations.
Zee Leisure Enterprises (ZEEL) and Solar TV Community hits their respective 52-week lows have tanked as much as 9%, whereas Dish TV India, INOX Leisure and Den Networks have been buying and selling decrease within the vary of 1% to 35 on the NSE.
At 09:48 am; Nifty Media, the biggest loser amongst sectoral indices, tanked 5.3% at 2,592, as in comparison with 0.24% rise within the Nifty 50 index. The media index was buying and selling at its lowest degree since December 30, 2016.
Since July 5, 2018, Nifty Media index slipped 14% after Mukesh Ambani-owned Firm Reliance Jio introduced its Fibre-to-the-home service (FTTH) at Reliance Industries’ forty first annual basic assembly (AGM). The corporate began accepting registrations for its broadband service from August 15. On comparability, the Nifty 50 index was up 7% throughout the identical interval.
Among the many particular person shares, ZEEL has plunged 9.5% to Rs 436 in early morning commerce after the media report steered that the overseas brokerage Morgan Stanley downgraded the inventory to ‘Underweight’.
“Whereas medium-term enterprise momentum seems good, led by promoting outperformance and supported by digitalization and new initiatives to scale up presence in films/ digital/abroad/reside occasions, we consider the near-term development outlook stays unsure owing to demonetization-led disruption that can weigh on promoting spends for the business. A subdued viewership score for the flagship Zee TV channel is one other concern,” analyst at JP Morgan mentioned in latest report.
Key draw back dangers embody slower-than-expected promoting income development; market share losses on account of upper competitors; increased losses for brand new media initiatives; and any new investments that may very well be earnings-dilutive, the brokerage agency mentioned.
ZEEL’s earnings to money movement conversion in the course of the monetary yr 2017-18 (FY18) deteriorate to 67% (FY17- 74%) on rising inventories and advances.
“ZEEL’s FY18 home subscription enterprise witnessed a development of 11.8% YoY (adjusted for the sale of Sports activities enterprise). The expansion was a tad decrease than the preliminary expectations on account of two components. Firstly, because of uncertainty associated to TRAI’s tariff order, revenues from the not too long ago digitised markets grew slower than anticipated. Secondly, in the course of the yr, exit of one of many DTH gamers led to some lack of income,” the corporate mentioned in an annual report.
Solar TV Community too hit a 52-week low of Rs 692, down 4%, extending its 7.5% decline in previous two buying and selling days on the NSE. The inventory plunged 37% from its 52-week excessive degree of Rs 1,098 touched on January 16, 2018 in intra-day commerce.