)
For the quarter gone by, higher advertising expenditure from FMCG companies would benefit broadcasting companies such as Zee and Sun TV who are likely to report 10-12% advertising revenue growth over last year.
Printcompanies are set to post 6-8% growth in advertising revenues, believe analysts. With easing interest rates and likely revival in economic growth, advertising environment is likely to improve going forward.
While some gains from the phase I of digitization process will trickle in the subscription revenues growth, the full impact of Phase I will be visible from the September 2013 quarter, believe analysts.
“Major impact on subscription revenues from Phase 1 will be visible in the financials of broadcasters like ZEE and Sun TV with a time lag of 6‐12 months. For MSOs, subscription revenues from digital subscribers should be visible as soon as the billing starts. On a conservative basis, we expect the full impact of Phase 1 to positively impactHathway and DEN from Q2FY14 onwards, says Abneesh Roy, media analyst at Edelweiss Securities.
Expedition in the process of Phase I billing and Phase II digitization will be key catalysts in the medium term.
Zee is expected to post 8-10% growth in revenues to about Rs950 crore.Its EBITDA margins are expected to expand by 600 basis points to 24.4% driven by low base effect as March 2012 quarter margins were hit by higher sports lossesand higher investments in content. The net profit is likely to grow by 7% to Rs180 crore.
Sun TV’s revenues are expected to grow by 9.9% to Rs 469 crore while net profit growth is seen at 10.6% to Rs 176 crore. The EBITDA margins are likely to remain unchanged at 76.9% and will be aided by lower cost increases and better cable distribution income.
Higher subscriber additions and ARPUs will enable Dish TV to post revenue growth of 11.1% to Rs 583crore. Rise in content costs will pull down the EBITDA margins by 347 basis points to 24.0%.As a result, Net loss is expected to increase 9.1% to Rs 53.5 crore. Analysts expects the company to add anywhere between 0.2 to 0.4 million subscribers in the March 2013 quarter. Commentary on price hikes and cost savings will be keenly watched.
In the quarter gone by, Hathway has seeded about 0.8 million set top boxes and garnered activation fees worth Rs 40 crore. This could aid revenues which are expected to grow by 23.6% to Rs 167 crore. EBITDA margin is also expected to improve by 571 basis points to 22.9% as compared to March 2012 quarter.
Consequently, its net losses are likely to be halved (down 54.3%) to Rs 4.1 crore.
D B Corp is likely to post 10.2% growth in revenues to Rs 398 crore — driven by strong circulation revenues (up 15%) and ad revenues (up 8-9%).Improved cost efficiencies will lead to margin expansion of 260 basis points to 23.6%. Overall, its net profit is expected to grow by 15.5% to Rs 52 crore, partly aided by higher other income.
