According to an Assocham- PwC survey, India’s media and entertainment sector may touch $50 billion by 2022. This is good news indeed given that there is a very high demand for content, especially music-related content, across devices and platforms. In a few years from now, India would be the youngest country in terms of age, and that augurs well for it’s content and media industry.
Let’s take a look at the financial and stock market performance of some of the leading media and entertainment companies in India.
A leading film content and distribution company, Tips is run by Kumar Taurani and his brother Ramesh. Though the company is not listed on the stock market, we have been able to make some realistic assessments of its financial performance.
According to a CRISIL document, the revenues of this company slid down from Rs. 68 crores in 2016 to 47 crores in 2017. Its Profit After Tax (PAT), declined marginally in the same period from Rs. 3.03 crores to 3.01 crores.
In this document, CRISIL cautions all lenders, investors and other interested people to exercise due discretion while advancing loans to TIPS as the company is not ‘cooperating’.
Having a market cap of Rs. 939 crores, Saregama is the owner of very popular Hindi movie songs. Recently, Saregama launched Caravan, a music device that can store up to 5,000 songs.
The current stock market per share price of the company is Rs. 539/- The 52-week high price was Rs. 738.75 while the corresponding low was Rs. 461.5.
Revenue-wise, the company has performed quite well. Its March 2019 revenues climbed up to 124 crores from 105 crores in March ’19. On the other hand, the net profit of the company came down from Rs. 21.45 crores to 16 crores in the same period. Earnings per Share also declined significantly from Rs. 12.33 (March 18) to Rs. 9 .25 (March 2019).
At the time of writing this article, we were still waiting for the 2019-20 Q1 results of this company.
3. Zee Entertainment
Zee Entertainment Ltd is one of the largest media and entertainment companies in India. It is also one of the largest aggregators of Hindi content in the world. The Indian media sector is synonymous with Zee and no finance related discussion is complete without a mention of this company.
ZEEL has the largest market capitalisation among all the public media and entertainment companies in India (33,175 crores). Its current stock market price is Rs. 345/- Over the past 52 weeks, the stock price has fluctuated very heavily. The 52 weeks’ low was Rs. 288/ while the 52-week high was Rs. 544/-
When we look at the total income of Zee from March 2018 to March 2019, we see a significant drop. Last year, its total revenues were 2001 crores which dipped to Rs. 1725 crores in March 2019. At the same time, employee and administrative expenses shot up from Rs. 219 crores to Rs. 336 crores. This statistic is important because sales expenses make up a significant part of the total business expenses of the company.
The reported PAT of the company has come down nearly 50% from Rs. 621 crores (March 2018) to Rs. 308 crores (March 2019). At the time of writing of this article, we could not ascertain the EPS values.
Of late, ZEEL has been buffeted by controversy. It has accumulated huge unsecured loans which are a source of worry to many investors.
4. Music Broadcast Limited
This company owns Radio City and is one of the three big private FM networks in the country. Music Broadcast was in the news recently when it announced its plans to acquire the debt-ridden Big Fm, one of its competitors.
The performance of Music Broadcast has been lacklustre over the past one year. In March 2018, its total sales were Rs. 75.93 crores which increased marginally to Rs. 81.87 crores in March 2019. In December 2018, the corresponding figure was Rs. 87 crores. This is a worrying statistic for many investors because this sluggish growth cannot sustain/ fund the acquisition of Big Fm. Sales expenses make up nearly 5% of the total revenue.
The reported Profit After Tax has gone up marginally from Rs. 16.26 crores (March 2018) to Rs. 18 crores (March 2019).
Though the Indian media and entertainment sector is expected to grow phenomenally, the performance of big companies like Zee Entertainment is quite disappointing. The long-awaited shakeup in the radio sector has begun as Anil Ambani prepares to cast off his huge debt by selling away Big Fm. Hindustan Times’ Fever has also taken over the ailing Radio One of Tariq Ansari formerly of Mid Day.