Top Media Stocks in India: Entertaining Income
Created on 31 Aug 2022
Wraps up in 5 Min
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Updated on 01 Feb 2023
Whether it's lazing on a Sunday or relaxing after a hard day of work, what's our favourite way to unwind? Chill and listen to our playlist or watch our favourite shows. The media industry has something for everyone with newspapers, radio, TV and OTT platforms. The iconic characters have become a part of our daily lives, whether diving into the history with Ramayana or the evergreen childhood memories of Tom and Jerry cartoons.
So, why not turn these entertainment sources into an extra source of income? The legendary investor Warren Buffett often said, if you don't earn even while you sleep, you will keep working until you die.
The stock market is the most popular way to build an alternate income source. In the financial year 2021 alone, there was an increase in individual investors by 142 lakhs.
Investors can also invest in media stocks in the stock market. With global digitisation, this industry will grow widely. So with additional income, investors can get dual benefits from their favourite entertainment channels. Read on to get a detailed overview of the top media stocks in India.
What are the benefits of investing in media stocks in India?
A famous proverb says, "The best time to plant a tree was 20 years ago, and the second best time is right now."
As per a forecast, the Indian media and entertainment industry will reach ₹2.4 lakh crores by 2024, resulting in the growing sales of Smart TVs, digital segments, film segments and animation & VFX segments. Here are some reasons which make investing in media stocks worthwhile.
1. Strong brand value
When celebrities endorse a brand, their stock prices rise. Like when Shah Rukh Khan promoted DishTV, it led to a surge in its sales. Media companies enter into long-term contracts with well-known personalities from all over the world. In addition, they host sports events and award ceremonies. Similar marketing actions add value to the company brand and increase its stock value.
Diversification offers investors benefits such as protecting their capital, reducing the impact of market volatility and investing in different stocks. Media stocks offer the diversification advantages such as investing in various formats, like movies and OTT. They cater to different demographics and geographies.
3. Ability to scale operations
Media companies need to negotiate with distributors and marketers to promote their products. The larger the media company, the broader the distribution, lower the fees and quicker the scalability.
What are the best media stocks in India?
There are multiple media stocks in the market. Here is a list of some of the best media stocks in India for 2022 :
1. Sun TV Network Ltd.
One of Asia’s largest networks, Sun TV, was Incorporated by the Indian media baron Kalanidhi Maran in 1992. It is the second largest listed media company in the Indian media industry. It operates 33 channels in 4 languages, Tamil, Malayalam, Telegu and Kannada, in India and internationally in countries like Sri Lanka, the Middle East and the United States. The company aims to expand to 43 channels in North India.
It is a mid-cap company with a market capitalisation of approximately ₹18,652 crore.
Its promoters hold a 75% stake in the company, and this stake has not changed in the last 9 months. Higher promotor holding represents the overall strength of the company.
Its Domestic Institutional Investors (DIIs) and Foreign Institutional Investors (FIIs) holdings have increased from September 2021 to June 2022.
2. PVR Limited
If you are a movie buff, you know about PVR. Incorporated in 1995, PVR limited is the largest multiplex cinema operator and market leader in terms of screen count in India. It has more than 855 screens across the country. Its first multiplex cinema was in Saket in June 1997. The company's strengths are its brand value and premium locations, due to which it charges expensive movie ticket rates, which have been the primary reason for its strong growth and profitability. The company also introduced an auditorium, “PVR Playhouse”, to showcase children's movies and animated content.
It is a mid-cap company with a market capitalisation of about ₹12,560 crore, making PVR one of the top media stocks in India.
Its DIIs and other investors' holdings have increased from September 2021 to June 2022
It is planning to merge with another media leader, INOX, after which the company will hold 80% of the market share in India. After the Securities and Exchange Board of India's (SEBI) approval of this merger, its share prices are at an all-time high.
3. ZEE Entertainment Enterprises
Zee Entertainment Enterprises is the largest producer of entertainment content in the world. It is one of the best media stocks in India. The media conglomerate broadcasts cricket matches, news and mainstream and niche films and has OTT services. With over 350 million customers, the company has paved its way in TV, print, mobile content and film. In 2018, it launched Zee5, its OTT service. Its major revenue sources are advertising, subscriptions and sales from movie productions and music labels.
It is a large-cap company with a market capitalisation of approximately ₹23,350 crores.
It recently merged with another industry giant, Sony. This merger is estimated to bring revenues worth ~₹15 thousand crore.
Its DIIs and other investors' holding of the company have increased between September 2021 and June 2022.
How to choose the best media stocks in India
To pick the best media stocks in India, an investor needs to:
Analyse the company’s past reports, profitability, earnings, market ratios, promoter’s holdings and other financials
Understand the risks of the media and entertainment industry, like lower growth with an increase in monetisation models. To grow their customer base, companies introduce discounted subscription models.
Be patient and maintain discipline. One should not get carried away with attractive returns.
The Bottom Line
This was an overview of the top media stocks in India. With the introduction of OTT and the slow recovery of cinemas after the pandemic, the media industry is experiencing multiple changes. So even though these stocks may offer great returns, investors must be cautious while investing.
Do you hold any media stocks in your portfolio? How have they been performing? Have any more stocks you'd like to add to this list? Let us know in the comment below.
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