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Grim picture for Zee Telefilms
March 06, 2003 15:31 IST
Zee Telefilms has experienced three successive sessions of losses; another potential bad day looms large on Thursday as market players including operators and margin traders are dumping the share.
In fact, by 10:46 IST, the scrip of India's largest listed media company declined 1.95% to Rs 75.60. It came off the early high of Rs 77.95 by then, but was placed above the day's low of Rs 75.10 . Over 3.37 lakh Zee Telefilms shares were recorded as volumes on BSE thus far. In the four sessions (including Thursday), the scrip has lost 14% from Rs 88 on 28 February 2003.
Hectic offloading is being witnessed on the counter in the wake of the weak market conditions. The incidence of margin calls, which were triggered after the scrip touched its 52-week low of Rs 74.85 on Wednesday, has hurt the scrip further.
Zee Telefilms has also been suffering from a fall in popularity vis-a-vis rival channels that are broadcasting the Cricket World Cup. Advertising revenues, as a result, have been on the descent. The company had earlier said - looking ahead, there is further low visibility in the advertising revenue scenario because of the Cricket World Cup. There could be an impact on the business of Zee because of a shift in advertising revenues to cricket, particularly during the cricket matches.
Already, Sony Entertainment Television (which is telecasting the World Cup) has hiked advertising rates seven times for the super sixes, semi-final and final matches. The advertising rates for a spot has jumped from $7,000 to $50,000.
This hike should put further pressure on the company's revenues as money would be further squeezed after rival SET increased advertising rates following India's strong chances of advancing further in the World Cup. The Cricket World Cup, which commenced on 10 February 2003, will end on 23 March 2003.
To add to the burden, the Union Budget for 2003-2004 hiked service tax from 5% to 8%. Big advertisers like Hindustan Lever, Nestle and Pepsi have been resisting the payment of the existing 5% service tax as it is. Broadcasting companies had to take some hit in absorbing this tax in some individual cases.
For the third quarter ended 31 December 2002, the media company's consolidated net profit jumped 36% to Rs 70.88 crore compared to Rs 52.11 crore in the corresponding period of the previous year. Total income increased by 9.89% to Rs 325.02 crore (Rs 3.25 billion) from Rs 295.76 crore (Rs 2.95 billion) in DQ 2001. On a stand-alone basis, for the quarter ended 31 December 2002, Zee Telefilms recorded a net profit of Rs 22.19 crore on total income of Rs 141.13 crore.
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