BLOG
Media Q4FY22 Preview: Multiplexes on recovery path!


What’s buzzing:
Media companies would soon be announcing Q4FY22 results. Key highlight is recovery by multiplexes despite a washout first half of Q4 while broadcasters are expected to witness a divergent performance with superior advertisement growth in the news segment.
Context:
Q4 started on a dismal note for multiplexes with no major releases in the first half of the quarter. However, the box office staged a strong recovery from end of February with Kashmir Files, RRR, Gangubai Kathiawadi, etc, driving growth. Inox Leisure is likely to report superior footfall growth as it had capitalised on the sleeper hit “Kashmir Files” through higher screen allocation from the beginning. Consequently, we expect footfalls at ~11.5 mn and ~14 mn for Inox and PVR, respectively, up ~22% QoQ, down ~3% QoQ, respectively. Ad revenues are expected to be much lower at 30-35% of pre-Covid levels. We expect spends per head (SPH) for multiplexes to remain healthy, albeit lower QoQ due to content mix. We estimate EBITDA loss (ex-Ind-AS) of Rs 23 crore for PVR while we bake in EBITDA (ex-Ind-AS) of Rs 30 crore for Inox (~9% margins). PVR’s EBITDA losses are likely owing to muted footfalls and higher cost structure. A divergent performance among broadcasters is expected with news segment doing well (TV Today ad revenue growth of ~15% YoY) with state election tailwinds and global news heavy quarter while general entertainment channels (GECs) ad growth may be modest (Sun TV to ad growth at 8% YoY) owing to muted spends by FMCG companies amid inflationary pressures.
Our Perspective:
The multiplexes segment is poised for a strong growth ahead with strong line up ahead with big releases such as Bhool Bhulaiya 2, Runway 34, Jersey, etc and host of other Hollywood and regional releases. Moreover, consistent content flow will be key to much needed recovery in advertisement revenues, which flows largely to EBITDA and bottomline. PVR-Inox merger consummation will also drive emergence of bigger entity with synergy benefits and superior growth. Recovery of broadcasters, however, will be a function of how they maintain relative market share, ramp up OTT offering and implement the new tariff order, which has restricted subscription tariff hike, so far.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Podcasts


