Media shares price movement
Shares of media and entertainment companies were under pressure, with the Nifty Media index plunging 4.5 per cent on the National Stock Exchange (NSE) in Monday’s intra-day deals after a sharp fall in the market price of Zee Entertainment Enterprises (ZEEL) and Network18 Media & Investments.
At 10:57 AM, the Nifty Media index was down 3.6 per cent at 1,545.05, compared to a 0.69 per cent decline in the Nifty 50. The media index slipped to a low of 1,530.20 in intra-day trade.
Why ZEE shares plunged 14% on huge volume?
According to media reports, Canara Bank and Union Bank of India are challenging the National Company Law Tribunal’s (NCLT) approval of ZEE group founder Subhash Chandra’s repayment plan.
Further, Subhash Chandra on Friday said that the group repaid approximately ₹43,000 crore of its ₹45,000 crore total debt. He urged the banking system and Finance Minister Nirmala Sitharaman to appoint an independent auditor to review the group’s borrowings, defaults, and repayments, the Business Standard reported.
JM Financial Institutional Securities view on media sector
Analysts at JM Financial Institutional Securities believe TV advertising is undergoing a structural decline, driven by advertisers reallocating budgets toward digital platforms. The combination of healthy advertiser advertising & promotion (A&P) growth across fast moving consumer goods (FMCG) and other sectors further supports this view. That said, most of the broadcasters have also been building out their digital platforms to capture this changing industry dynamic.
Netnet, the brokerage firm believes ad growth is likely to remain muted in the near term for broadcasters as their television business faces structural softness, while the digital business, despite its strong growth trajectory, remains relatively small in scale.
Management commentary across FMCG companies points to continued/accelerating brand investments, although allocation is increasingly shifting toward digital, performance marketing, influencers and localised activation. Similar growth in advertising spends across banks, non-banking finance companies (NBFCs), automobiles, consumer durables and building materials reinforces our view that TV is losing wallet share, analysts said. In response to these changing consumption patterns, broadcasters have also been building out their digital platforms, they added. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers’ discretion is advised.
