The stocks of media companies continue to decline despite the combined growth rates of 44.68 per cent in revenues and 26.20 per cent in net profits during the nine months to December 2000.
The market capitalisation of 11 media stocks dipped by Rs 8,470 crore in the quarter to December 2000. From October to December, these companies recorded a combined revenue growth of 41.72 per cent. On the back of a 66.78 per cent rise in other income, net profits of these firms rose by 35.84 per cent.
In the second quarter ended September 2000, the market capitalisation of media firms declined by Rs 1,372 crore, despite a 59.85 per cent rise in revenue and a 26.19 per cent growth in net profit.
The proposed government ban on advertisement of tobacco products and the slowdown in the fast moving consumer goods (FMCG) sector are likely to dent in revenues further. The slowdown has already compelled FMCG companies such as Hindustan Lever and P&G to cut their ad spending to maintain bottomline growth.
The revenue of media major Zee Telefilms at Rs 278.75 crore rose by 30.72 per cent during nine months ended December 2000. A hefty rise in other income to 258.71 per cent helped Zee's net profit grow by 46.90 per cent. During the quarter ended December 2000, the company's revenue grew at a slower pace of 17.91 per cent.
The other income of 10.16 crore, against Rs 2.83 crore of the same period of last year, helped the company report a net profit growth of 29.28 per cent.
The new channel SABe helped Sri Adhikari Brothers Television post a revenue growth of 128.11 per cent during the quarter ended December 2000. However, the company had to spent Rs 48.70 crore on SABe channels which lowered the profit growth of the company which, in turn, declined by 16.24 per cent to Rs 4.23 crore.