| Speaking to indiantelevision.com, Motilal
Oswal Securities' Subhabrata Majumder elaborated, "The passage
of CAS in the Rajya Sabha will ensure that the longer term impact
would be favorable to Zee Telefilms. We have maintained our FY04 estimates
and Buy recommendation."
The reasons, Motilal Oswal gives for not changing its position
on the Zee stock include:
Ø Zee's higher rural bias compared to competitors protects
it from any adverse impact on advertising revenues due to possibly
low set top box penetration in the metros.
Ø It is possible that the set top box penetration might
show a substantial increase and surprise the sceptics.
Ø Broadcasters could float a mass general entertainment
free-to-air channel to enhance their advertising revenues and to
give viewers a laddering option to graduate to their respective
pay offerings. (Zee may actually take this route by having a free
to air, second run programming channel.)
Ø Zee is a broadbased player with the viewership of its
flagship channel, Zee TV having a higher rural bias than its competitors.
The regional language Alpha channels also give it a broader revenue
base from the non-metro cities and towns. Therefore, for Zee, the
implied share of advertising revenues from the metros would not
be more than 20 percent.
In the longer term, with improving penetration of set top boxes,
Zee could derive higher pay revenue grow the post-CAS. We maintain
our advertising and pay revenue estimates for FY04, till the time
the final guidelines are out and reiterate our Buy recommendation.
Zee Telefilms projections
as per the Motilal Oswal Securities Inquire Indian Equity Report
dated 20 December 2002
Motilal Oswal CAS report:
Cable optrs to be affected
Broadcasters will consider
FTA offering apart from premium pay TV channel, says Motilal Oswal
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