The Hindu Business Line : It's party time for media stocks, courtesy CAS

WHETHER the implementation of the conditional access system (CAS) spells well for the consumer or not will be known in the coming weeks, but last week was good for media stocks.

Overall shares of most of the media companies saw a renewed interest with both prices and volumes picking up. Companies such as Zee Telefilms, Sri Adhikari Brothers Television (SAB TV) and ETC Networks saw a spurt in both volumes and price because of the positive impact of CAS on these broadcasters.

Zee Telefilms closed the week at Rs 92.75 with over 74 lakh shares changing hands on the Bombay Stock Exchange (BSE) and 1.5 crore shares traded on the National Stock Exchange (NSE) on Friday alone.

SAB TV touched Rs 81.45 with volumes of over 2 lakh on the BSE alone.

Analysts attributed the trend to the fact that media stocks have been de-rated significantly in the last several months that prices had touched the bottom. "Once the leader Zee Telefilms picked up, shares of other media companies have started moving up," they said.

"While Zee Telefilms is expected to reap the benefits of CAS through its subsidiary Siticable, which is one of the country's largest multi-system operators (MSOs), others such as SAB TV and ETC Networks are free-to-air channels," said a Mumbai-based analyst. SAB TV has already beefed up its content and is not likely to lose much viewership since it's one of the two general Hindi free-to-air entertainment channels.

However, interestingly, shares of content providers such as Balaji Telefilms, Creative Eye Ltd and Mukta Arts (which is also getting into television software) have gone up, despite the possibility of broadcasters planning to rework their deals.

Market watchers said that the reasons for stock prices of these companies to go up are two-fold. "One is that the market has already absorbed this negative news by bringing down the prices earlier and has now started discounting it. Two, if CAS is implemented and brings in stability, broadcasters may not bring down the rates drastically," said Mr Nikhil Vora, Vice-President of securities firm ASK Raymond James.

Television 18 (TV 18), which will have majority stake in business news channel CNBC India, is also in the limelight as the market expects the channel to gain most through CAS. "TV 18 could be one of the biggest gainers after SAB TV because it is among the strongest niche channels available," said Mr Vora.

But for now, it is party time for media stocks.

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