The Hindu Business Line : Electronic media stocks in limelight

ELECTRONIC media stocks, led by Zee Telefilms, were among the movers on Friday as investors' attention was keyed towards the segment for a number of reasons.

The Zee stock rose 6.48 per cent to Rs 150.30, around its two-month high. Content provider Balaji Tele finished up 8 per cent at Rs 111.50, the highest after January 4. NDTV, TV 18 and TV Today were also among the gainers.

According to analysts, renewed hopes on the introduction of the conditional access system (CAS), improved programming, plans for foray into the print medium, the biggest marketing bouquet of channels and lower market price compared to the improvement in fundamentals have worked in favour of the Zee Telefilms stock.

According to Mr Nandish Shah of Anagram Stockbroking, most companies in this space reported better than expected results.

According to industry observers, CAS issue may be taken up by the Central and State Governments on a Delhi High Court directive.

Mr Haresh Chawla, CEO of CNBC TV 18, while declining to comment on the possibility of revival of CAS, told Business Line that if CAS is introduced, it would definitely be better for channels in terms of programming, content and revenues.

Currently, ad rates are generally based on TAM India ratings. But earning flow from viewers is chaotic in the absence of a well-organised system of revenue sharing with cable operators.

"Zee is relatively better off than other stand-alone channels as it boasts a wide ranging basket of channels covering almost all viewer groups. Its cable outfit, operating in some urban centres, also provides additional cushion compared to others," said a media stock analyst.

"In India, the ratio of advertising expenditure to nominal GDP is about 0.04 per cent. As the economy races ahead, the ad expenditure to GDP ratio is expected to grow at an accelerated pace. India has almost 90 million television homes, of which 50 per cent is cable linked. If proper leveraging of existing and potential reach could be brought about through an organised system, then growth possibilities will have no limits for the next five to 10 years," Mr Shah said.

According to Mr Arun Kejriwal of Angel Broking, the electronic media industry growth seems to be in fine shape. Analysts point out that the entertainment industry as a whole is expected to record a CAGR of more than 30 per cent.

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