The election coverage has translated into big bucks for TV broadcasters as several listed networks including TV Today, NDTV, TV18 and ZEEL have wrapped up a strong first quarter with their revenues showing an uptick between 8% and 40% in the first quarter.

Analysts are now looking forward to the festive season to see if the sector's growth continues.

The first to announce the results was Network18, whose TV news business recorded a jump of 14% in its revenue in the first quarter ending June 30, 2024. The TV news portfolio delivered 30% advertising growth during the quarter.

The TV business also posted an EBITDA of Rs 40 crore in Q1 FY25, a remarkable jump of 46% from the same period previous fiscal. However, in its financial statement for Q1 FY25, the whole network, which includes TV news, entertainment and digital news, reported that the total income stood at Rs 3,292 crore for Q1 FY25, down by 4% from the same period in FY24. Its total expenses increased from Rs 3,432 crore in Q1 FY24, to Rs 3,509 crore in Q1 FY25.

Another news broadcaster that scored big on the revenue front was NDTV which reported a total revenue jump of 30% in Q1 FY25 buoyed by Lok Sabha elections. The revenue stood at Rs 97.8 crore in Q1 FY25, up from Rs 75 crore in Q1 FY24. The network also reported a 34% increase in its operating revenue during the quarter.

Zee Entertainment Enterprises Ltd (ZEEL) too performed positively on the revenue front with an 8% jump in the first quarter of FY25 to Rs 2,149 crore as against Rs 1,998 crore in the previous year quarter.

ZEEL is reeling from the failure of their $10 billion merger deal with Sony (Culver Max Entertainment Pvt Ltd), which was terminated by the latter in January this year. During the Q4 results for 2023-24, ZEEL CEO Punit Goenka had said he was confident of achieving the long-term aspiration of 18-20% EBITDA by FY 2026. The Q1 FY25 result looks like a step in that direction. 

The network reported a net profit of Rs 118 crore in Q1 FY25, compared to a loss of Rs 54 crore in Q1 FY24.

TV Today Network reported a revenue jump of 38% in Q1 FY25, with its profit up by nearly 500%. The network's total revenue for the quarter stood at Rs 321.5 crore, up from Rs 232.4 crore last year's quarter.

However, did the sector’s performance create a bull run for its stocks?

ZEEL stock price has plummeted from Rs 231 per share in January 2024 to Rs 134 as on August 6. Its market capitalisation is Rs 128 billion.

Network18 Media and Investments stock price saw a peak of Rs 130 per share in January 2024 to Rs 93.5 as on August 6. Its market capitalisation is Rs 98.4 billion. TV18 stock price hit a peak of Rs 65 per share since January this year and currently stands at Rs 43.5 per share.

As on August 6, per share price of NDTV closed at Rs 206 and it has a market capitalisation of Rs 13.4 billion.

Share price of TV Today Network Ltd stood at Rs 263 and has a market capitalisation of Rs 16.2 billion.

While revenue growth is a positive indicator, stock prices are influenced by a multitude of factors, explained experts.

According to analyst Karan Taurani, Senior VP, Elara Capital, festive season could be good for media stocks but it will be tough to match the election levels.

“I think for media stocks, print companies and news companies which have seen a very big positive delta on elections, the best is largely behind us. We'll see some respite in the festive period but we'll not be able to match up to the scale levels or revenue growth levels or to the profit margins level of what they've created during elections over the last two quarters.

“As far as companies like Zee and Sun are concerned, the festive season is going to be a very strong one because unlike last year when we had a 50-over World Cup, this year, we have no cricket tournament during the festivals,” Taurani said.

He added that FMCG advertising spends are going to see an increase so festive is going to be a strong quarter for many of the broadcasting players on the GEC side like Zee and Sun TV.

“I think it's going to have a positive impact in terms of Zee's (stock) price. Sun TV, the stock price has already run up. So yes, I think now they're going to be range bound. But Zee could see some action because of better ad growth and because of better margins going ahead,” he said.

Differing from Taurani’s view, a marketing expert said none of the media stocks have provided substantial returns and that it's unlikely that stock prices will see any significant changes unless there's a sustained improvement in performance.

“You would rarely hear of anyone making significant returns from media stocks, whether it's TV Today, NDTV, Zee, or TV18. Over the years, none of these companies have provided substantial returns to investors. There is a general apathy towards this sector because it is similar to what PSU stocks have been historically, offering poor returns. Although PSUs have recently started to provide better returns, media stocks have yet to show consistent performance.

“Historically, none of these stocks have delivered impressive returns over the past decade. Zee was once considered a promising opportunity due to a potential deal (with Sony) that could have strengthened its position in the media landscape. However, the failure of the deal dampened investor sentiment,” said Ashish Kapur, CEO, Invest Shoppe.

“Currently, it's unlikely that stock prices will see significant changes unless there's a sustained improvement in performance,” Kapur added.

According to another industry observer, given the long-standing stagnation of these stocks, any turnaround would be challenging and require substantial evidence of sustained improvement.

India will soon enter its festive season this year, which is regarded as a critical time in the advertising calendar, with brands prioritizing their investments to capitalize on heightened consumer spending and engagement. Experts believe TV will continue to be a key medium during the season for advertisers.

Industry experts believe that despite big-ticket events such as the IPL, general elections, and the recently concluded T20 World Cup keeping brands occupied, budgets for the festive season remain steadfast, as this period promises maximum returns for advertisers.

According to a media planner, while TV is seeing pressure and digital spends are rising, other media like print and radio are seeing challenges predominantly.

“TV continues to be a key medium to build brands and drive sales and cannot be ignored. FMCG will always be on the forefront as consumption happens through the year, other than that we also see Retail categories such as Jewellery, Mobile, Fashion, Ecom, E-Consumer Durables, Automobiles will definitely be bullish,” he said.

According to marketing experts, digital including E-commerce will continue and grow to be brand favourites, but TV will continue to co-exist and grab the relevant budgets, and cater to the diversity and scale the nation offers.

Besides those already discussed, other broadcasters are set to disclose their Q1 financial results in the coming days.

Sun TV Network is expected to announce their results on Friday and it will be interesting to see whether the south market is also in sync with its counterparts in the north.