NEW DELHI: While multiplex firms like PVR and INOX Leisure may declare growing earnings and revenue for the third quarter ended December (Q3FY20), other segments in the media sector are likely to record one of the worst quarters in recent years. According to analysts, a sharp slowdown in the advertising revenue growth is likely to take a toll on broadcasters and print companies alike.
“Q3FY20 is likely to be one of the toughest quarters the media industry has seen in many years and likely the first of both revenue and EBITDA decline. We estimate our media universe’s revenue and EBITDA to fall ~13.7 per cent YoY (down 2.7 per cent in Q2FY20) and ~8.4 per cent YoY (up 10.6 per cent in Q2FY20),” said Edelweiss Securities analysts Abneesh Roy and Prateek Barsagade.
The primary reason for such a substantial dent is the estimated dive in advertising growth during the period as slowdown worries saw firms across segments make cost-cutting measures to shore up margins.“We have seen a fairly large dip in overall ad flows during the October-December period, even though there has been a bump in consumer goods segment promotions due to the festive season.But, the overall trend has been lower advertising spending,” said a senior marketing executive in a major broadcaster. “Ad growth of broadcasters and print players is likely to be under severe pressure due to economic slowdown and high base,” agreed Roy and Barsagade.
According to Edelweiss, estimated fall in ad revenue during the quarter is likely to stand at around 13 per cent for Zee Entertainment, 14 per cent for Sun Network, 12 per cent for DB Corp and 13 per cent for Jagran Prakashan.