Q3 Result Preview: Zee, PVR Inox, Sun TV expected to see mixed earnings in Q3FY24, says Nuvama

Q3 Result Preview: The multiplex industry is expected to experience a quarter on quarter (QoQ) dip due to low foot traffic in the first half of the quarter following the Cricket World Cup, said brokerage house, Nuvama Institutional Equities, in its Q3FY24 preview report on media. As per the brokerage, this is in contrast to strong YoY trends driven by films like Animal, Tiger 3, Dunki, Salaar Part 1, 12th Fail, and Leo.

According to the brokerage, occupancy would be 26–27% and the average ticket price (ATP), spending per head (SPH), and ad revenue would decrease 6%, 1%, and 11% on a quarterly basis. In light of the exam season, the brokerage projects Q4 revenue to be comparable to Q3. On the other hand, the brokerage predicts that broadcasters will continue to show a modest recovery in ad and subscription revenues QoQ; however, because QoQ movie revenue is expected to be lower, margins may face pressure.

Due to the ICC World Cup, advertisements in October and November were weak, but December saw a respectable comeback. INOX is the brokerage's top pick. "We expect ad revenues to improve in CY24 for our coverage universe driven by the improving margin profile of consumer companies and likely rural recovery in H2CY24 (Q4FY24 to remain challenging).

For multiplexes, we expect Q3 revenues to be similar in Q4 given fewer big movies and gaps between releases due to the upcoming exams season, particularly in the second half. We continue to await dates for the merger extension of the Zee Sony deal. For broadcasters, over the coming quarters, we expect full fledged NTO 3.0 benefits," the brokerage explained.

Here's what the brokerage anticipates from the following companies in Q3FY24: PVR INOX Consolidated revenue and EBITDA are predicted by the brokerage to rise 62% and 58% year over year. According to the brokerage estimate, PVR INOX would record a PAT of 46.3 crore. Further, it projects a 6%/1% QoQ decline in ATP/SPH to 260/ 134.

The brokerage firm anticipates a 20% QoQ decline in foot traffic to ~3.85 crore. Regarding profits, it anticipates a 27%–24% quarterly decrease in net box office collection and food and beverage revenue to 820.8 crore and 490.1 crore, respectively. The report predicted PVR INOX would earn 105 crore in advertising revenue during the quarter.

ZEE Zee's revenue, EBITDA, and PAT are expected to decrease 2.2%, 41.8%, and 44.7% YoY, according to the brokerage. Ad revenue is expected to gradually rebound QoQ (up 3.4% in Q3FY24), but it is expected to decline by roughly 5% YoY as a result of the ICC World Cup and slow rural ad volumes. YoY/QoQ growth in subscription revenue is predicted to be 1%/1.3%.

YoY growth in Zee5 profitability is anticipated to be positive. However, because of one off revenue in the prior quarter, QoQ Zee5 losses will increase. Due to the lack of major motion pictures, other sales services—which are expected to bring in 150 crore—are expected to experience a sharp QoQ decline in Q3FY24.

SUN TV “We expect revenue/EBITDA/PAT for Sun TV to increase 5%/1.2%/3.6% YoY. Ad revenue is likely to decline 5% YoY but grow 6% QoQ. Movie business revenue is anticipated to see a decent jump in Q3FY24 due to the success of Leo (expecting about 150 crore revenue from Leo)," the brokerage said.

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