 "Media & entertainment stocks rally; Saregama, Tips Films zoom up to 20%")
Shares of media and entertainment (M&E) companies, including film production, distribution and exhibition companies, rallied up to 20 per cent on the BSE in Wednesday's intraday trade on Wednesday, aided by heavy volumes in an otherwise range bound market.
Mukta Arts, Pritish Nandy Communications, Tips Films, Saregama India, and Zee Entertainment Enterprises rallied between 6 per cent and 20 per cent in the intraday trade today. By comparison, the BSE Sensex was up 0.07 per cent at 84,976 at 02:27 PM.
Among individual stocks, Subhash Ghai-promoted Mukta Arts was locked in the upper circuit at Rs 97.09 per share after the company announced that an assignment agreement and term Sheet was executed between the company and Zee Entertainment Enterprises (ZEEL) for satellite and media rights of 37 films of the company for a limited period of six years commencing from August 25, 2027.
The company did not disclose the total transaction value. It, however, said that the deal was executed for a total consideration of 25 per cent more as compared to previous agreement and as per the terms and conditions entered between the company and ZEEL.
Meanwhile, the M&E industry is likely to reach Rs 23,800 crore by 2026. Film segment is expected to continue to grow, driven by theatrical revenues as Hindi movies go mass market in their storytelling, incorporate more VFX to enhance the movie-going experience and expand more aggressively into tier-II and III cities. Growth in overseas revenues will depend on opening-up of culturally similar markets like China and the middle east.
Shares of Tips Films, too, were locked in the 20-per cent upper circuit at Rs 658 on the BSE. The company is engaged in the business of Production and Distribution of films, web-series, and related content. The film library consists of super hits such as Raja Hindustani, Raaz, Race, Ajab Prem ki Ghazab Kahani, Tere Naal Love Ho Gaya, Amber Sariya among others.
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Tips Films, in its FY24 annual report, had said the company is geared up for 5 to 6 productions per year and is building a project pipeline to achieve this target. The state-of-the-film-industry remains very healthy and the outlook on content demand is positive. Therefore, the management said they are confident that the company will scale up profitability.
Shares of Saregama India, meanwhile, hit a record high of Rs 622 as they rallied 17 per cent on the BSE in today's intraday trade. Thus far in the current financial year 2025, the stock has zoomed 80 per cent.
Saregama India is engaged in the business of manufacturing and sale of Music storage devices viz. Carvaan, Music Card, Vinyl records etc. and dealing with related music rights. The company is also engaged in the production and sale/telecast/broadcast of films/Tv Serials, pre-recorded programmes and dealing in film rights and organising events.
With a healthy contribution of high margin licensing income in sales and increasing digital penetration on the back of tie-ups with over-the-top (OTT) applications, the profitability margin is expected to remain healthy, according to analysts.
The high margin licensing income has exhibited an increasing trend over the years and grew by about 16 per cent in FY24 (21 per cent in FY23). With the gradual phasing out of physical music content, the company's changing business model has been capturing newer and profitable ways to monetise its existing music content, particularly, retro on digital platforms through OTT platforms (including YouTube), and publishing (through movies, TV shows and brand usage). With cheaper availability of data and increased usage of smartphones, the digital use of content has been increasing significantly, CARE Ratings said.
Shares of Pritish Nandy Communications hit a 52-week high and were frozen in the 20 per cent upper circuit at Rs 79.16 on the BSE. The company is engaged in the business of production and exploitation of content including cinematographic films, TV serials and Digital Series etc. for worldwide exploitation in all formats.
As per the FICCI E&Y Report 2024, the Indian M&E sector is expected to grow by 10.2 per cent to reach Rs 2.55 trillion by 2024, then grow at a compound annual growth rate (CAGR) of 10 per cent to reach Rs 3.08 trillion by 2026. The Report also projects a strong and sustained growth for digital media, the area in which the Company operates. With streaming platforms continuing to grow viewership and the world opening up to Indian content in different languages, the immediate future of the content business looks strong, stable and likely to grow apace, the company said in its FY24 annual report.