Media, entertainment Q3 results preview – a quarter of mixed bag: Prabhudas Lilladher

After a blockbuster Q2 FY24, industry wide box office collections declined 22% QoQ to ~Rs 25.6 billion in Q3 FY24E. Box office collections were weaker on sequential basis due to-

1. high base,
2. paucity of content in first 45 days and
3. cricket world cup.

Accordingly, we expect PVR-Inox Ltd. to report modest performance with footfalls of 36 million (~24.5% occupancy) and pre-Indian Accounting Standard Ebitda margin of 11.1%.

On broadcasting side, ZEE Entertainment Enterprises Ltd.’s performance is likely to be impacted by continued weakness in ad-environment exacerbated by cricket world cup (shift of ad-spends from GEC towards sports).

We expect domestic ad-revenues to decline 2.3% YoY to Rs 9.9 billion with an Ebitda margin of 10.1%.

Entertainment: Levy of GST on full bet value, persistent headwinds in Kiddopia and ad-tech business coupled with modest performance from Nodwin is likely to slow down the growth trajectory for Nazara Technologies Ltd.

However, we expect Ebitda margin to improve to 14.6% due to better cost control. Post recent fund raise, Nazara has cash balance of Rs 13.3 billion and we believe capital allocation decisions from hereon will be key to re-rating.

Despite the delay in merger, ZEE Entertainment remains our preferred pick in the media and entertainment space as we expect positive outcome from ongoing negotiations.

Click here for report. NDTV Profit