TV industry faced muted growth in advertising in Q3: Elara Securities report

The television industry saw muted growth in advertising in the October to December quarter on a high base from last year, according to a note by Elara Securities. The report also notes that most of the ad spends had been diverted to the Cricket World Cup, hitting general entertainment channel (GEC) spends. 

Zee Entertainment’s ad revenue is expected to decline 1.5% year-on-year, against a 3% growth for Sun TV.  

As per the report, subscription revenue is expected to moderate on a quarter-on-quarter basis due to the implementation of New Tariff Order 3.0 in March 2023. Zee TV’s subscription revenue is seen growing 3.5% year-on-year and 4% for SunTV. The absence of movie revenue – Zee’s last release was Gadar 2, while SunTV had Jailer – may drag total revenue down on a quarter-on-quarter basis, Elara Securities’ Karan Taurani said.

Q3FY24 has been a sub-par quarter for PVR Inox due to films such as Animal and Salaar posting healthy performances. The report expects an estimated 30-32% occupancy in December but overall occupancy in Q3E may be at an estimated 25% due to muted occupancy in October-November, in line with our annual occupancy expectation.

Digital adex growth in India/EM remains strong

It is expected that Affle India will post an overall revenue of INR 4,950 million, up 31.6% YoY, led by the YouAppi acquisition. Organic revenue growth may be 13% YoY as emerging markets (EMs) may show green shoots in ad growth due to the festive season (revenue growth of an estimated 20% YoY in Q3E). 

CWC’23 boosts revenue growth prospects

Zomato may report an overall revenue of INR 31.1 billion in Q3FY24E, up 60% YoY. It expects gross order value (GOV) to grow 25% YoY and 95% YoY in the food delivery segment and Blinkit (quick commerce segment), respectively, led by an uptick due to the festive season. 

Revenue from food delivery, Blinkit and Hyperpure may grow 42% YoY, 110% YoY and 100% YoY. According to Elara Securities, it can be expected to observe a higher YoY growth in food delivery revenue led by higher take rate expansion (240bps YoY) in Q3E due to the full impact of the introduction of a convenience fee of INR 3 per order and better ad revenue.   

Some respite for print/radio adex

DB Corp is expected to report consolidated revenue of INR 6,432 million in Q3FY24E, up 9.7% QoQ and 14.0% YoY. It is expected that print advertisement revenue/radio advertisement revenue/print circulation revenue/digital revenue will grow 15% YoY/10% YoY/12% YoY/10% YoY, respectively in Q3E led by the festive season. 

Even though the radio medium has been struggling and remains the worst-hit in the post-COVID era due to consumers moving to the digital format, Entertainment Network will report revenue growth of 10% YoY (on a high base) in Q3FY2E due to boost from the festive season. Radio revenue may see a better recovery in Q1FY25, backed by the impact from election-related ad expenses.