TV companies hope festive season will revive fortunes. Look to digitisation to improve revenues, even as print segment takes away consumer ad money
With rising inputs costs and inflation, big national advertisers in the conventional sectors have undertaken significant cuts in ad spend and this is hitting broadcasters hard. TV channels are now looking forward to the festive season and digitisation over the long run, to improve their fortunes, but at least one brokerage believes that the print segment will still outperform TV.
"The TV ad industry witnessed a slump in ad sales till August 2011, mainly on the back of reduced ad spend by sectors like FMCG, real estate, banking. Adding to that, competitive intensity and fragmentation in the industry have also gone up," Pinc Research stated in a sector update.
Zee Entertainment has been affected the most and has lost out to Star, Colours and Sony in TRPs. That is mostly due to Zee's non-reality shows and the popular prime time soaps that have become the staple for others. Sony, too, which was languishing during the IPL with significantly low ratings, has seen viewership improve post IPL with 'Bade Acche Lagte Hain' and the recent launch of 'Kaun Banega Crorepati'. Star touched all-time high ratings recently with the big television premiere of 'Singham'. About 124 million viewers tuned in to the screening.
But Pinc says dependence on advertisements will decrease once digitisation is achieved. Experts, however, are cautious about this. "While digitisation is definitely catching up, the importance of advertisements cannot be ruled out. To say that premium payability option will be an adequate substitute for advertisements will be a bit far fetched at this point," says an analyst. But the situation could improve with the coming festive season.
On the other hand, the regional print industry has performed well, and has maintained its double-digit ad growth. Currently, the industry is growing at a 12% CAGR for 2011-2015. The report estimates that print will continue to prosper, riding on sectors like automobiles, education and infrastructure.
"Advertisements in the current economic scenario are largely driven by volumes and moderately by yields. Innovations like adding more space, or providing colour ads at a discounted price, have helped in offering lower effective ad rates which has helped to increase ad volumes," Pinc Research says.
Newsprint costs are also expected to come down in the next few months and this has added to the buoyancy of the sector. "We expect listed print players-DB Corp, HT Media, Hindustan Media Ventures and JPL to register ad revenue CAGR of 13-15% over FY11-FY13," the brokerage says.
Judge asks state government, Tata Motors to file final notes by 20th September
Kolkata: The Calcutta High Court today directed the West Bengal Government and Tata Motors to file written notes of argument by 20th September, as hearing on the petition by the company challenging the Singur Act concluded today.
Justice IP Mukerji is expected to deliver the judgement in the case before the Diwali holidays which begin 1st October. The petition challenges the constitutionality of the Singur Land Rehabilitation and Development Act 2011.
The hearing concluded after Tata Motors counsel S Pal finished his submissions in reply to the arguments by the state on its position on the constitutionality of the Act, PTI reports.
Tata Motors opposed the High Court's initiative on compensation to it for the government, vesting land at Singur which was leased to the company. The counsel disagreed with the proposal and informed the judge that there was no mention of the leasehold value of the land in the government's proposal which could be 500% higher than that of the structure constructed at Singur.
The state government, on the other hand, said that the Hooghly district judge would determine the compensation, in line with the principle laid down under section 23 and 24 of the Land Acquisition Act 1894. The company has taken away all machinery from Singur, to Sanand in Gujarat, where it has set up a new plant to make its Nano small car.
Pantaloon Retail India Ltd will divest its stake in Future Capital Holdings within the next four to six months
Future Group CEO Kishore Biyani today said his company's flagship retail chain Pantaloon Retail India Ltd will exit its non-core businesses in order to pare debt and fund growth plans.
As one of the first steps toward achieving the goal, Pantaloon Retail India Ltd (PRIL) will divest its stake in Future Capital Holdings within the next four to six months.
"We (PRIL) have many other businesses such as textiles and media, which we can exit and become a zero debt company," Biyani said.
He, however, added that the divestment is not only aimed at reducing debt, but also, "We are able to make acquisitions and expand our existing core retail businesses."
PRIL has reported its debt liability at Rs4,200 crore as of 30 June 2011.
Biyani said the company is looking to reduce its debt exposure and expand in core businesses. Nevertheless, he underlined that PRIL's debt equity ratio is 1.2:1 at present, "which is not a problem" and "the divestment will help us grow".
Citing the example of divesting stake in non-core ventures by PRIL in Future Group firms, Biyani said the flagship retail chain is in the process of selling its stake in Future Capital Holdings.
"We are looking to divest Pantaloon's take in Future Capital Holdings and the process is on. It will take about 4-6 months' time," he said. Biyani, however, did not specify how much stake would be sold and also the parties with which the company is in talks for the same. PRIL has a 55% stake in the financial services arm of the group, Future Capital Holdings.
The firm has earmarked a Rs900 crore expenditure over the next three years on 9 million square feet of retail space, which it has already booked across India for expansion.
Asked about the possibility of the government allowing foreign direct investment in multi-brand retail, Biyani said: "Things are moving... It has to happen and we are hopeful... but that does not impact our business plan."
On Friday, Pantaloon Retail ended 1.11% down at Rs259.10 on the Bombay Stock Exchange, while the benchmark Sensex gained 0.34% to 16,933.83.