Media stocks have taken their share of beating in the current fluctuating trend at the Sensex. Investors bring in the much needed financial muscle and hence, it becomes imperative to make media stocks attractive to investors. INMA South Asia Conference, which was held in Mumbai on November 13-14, dwelled on this important topic.
impact, the weekly magazine on advertising, media and marketing, and Pitch, both from the exchange4media Group, were media partners for this event. exchange4media.com was the online partner.
The panellists on the session on 'Investors' Views of Media Companies' included Uday Bhansali, Executive Director, Kotak Mahindra Capital Company Ltd; Ravi Lambah, Managing Director, Citigroup Global Markets India Pvt Ltd; and Kamal Yadav, Executive Director, IBD Morgan Stanley India. Sanjeev Shah, Director (Mergers & Acquisitions), Bennett Coleman & Company Ltd, moderated the session.
The global economic slowdown has been looming large across industries, which is reflecting in the volatility in the stock markets. Given the current conditions, Indian media and entertainment stocks have also been badly hammered. The session brought forth investors' views on media stocks, especially regional language newspapers, and identifying the growth opportunities.
Opening the session, Sanjeev Shah, said, "Investors have become sceptical about investing in media stocks as profitability has become unpredictable given the current economic conditions."
Uday Bhansali noted, "Today, we see that a lot of media stocks are undervalued and more preference is given to companies that are well-established and able to sustain themselves in these tough times. He further said that any investor, who understood the brand/ newspaper, would continue investing.
Stating that he had never experienced such a bad situation in the country before, Ravi Lambah added, "The big question here is whether to invest in media stocks or not. And the answer is yes." He further said, "Our advice to media companies is to consolidate right now. Investors look at those companies who have good, stable cash flows and have sustaining power in bad times."
On the other hand, Kamal Yadav believed that there was still positive interest from investors towards the print industry.