Tuesday, January 6, 2009

Q3FY2009 Media earnings preview: January 06, 2009


Q3FY2009 Media earnings preview 

  • We expect Q3FY2009 to be a bad quarter for most media companies as we expect the rate of the year-on-year (y-o-y) growth in their revenues to taper off substantially in the wake of a significant cut in the advertising spends in the key sectors, such as banking, financial services and insurance (BFSI), real estate and automobiles. Also, a general sense of rational advertisement spend (bang for the buck) and fragmentation across media verticals due to an increase in competition would lead to a slower revenue growth. Consequently, as the revenue growth lags behind the increase in costs, we expect media and entertainment companies to report subdued earnings for the quarter.
  • Overall, we believe the media and entertainment industry is in for tough times as advertisers tighten their advertisement spends in a bid to control costs. Also, fragmentation across media verticals has led advertisers to evaluate "bang for the buck spent". We believe alternate media such as radio and out-of-home advertising are likely to face higher pressure compared with the other verticals. We maintain Zee News as our preferred pick in the sector.

 
Click here to read report:  Sharekhan Special 





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