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Nithya Subramanian

New Delhi , Nov. 10

THE media industry is upbeat with Hindi movies doing well after a year-long drought of hits and its raining ads on television. But the second quarter results on media companies do not seem to reflect this mood.

A quick glance at the net profit figures for the June-September quarter of some of the well-known media companies indicates that besides Zee Telefilms and Adlabs, most of the others have reported lower net profits. While Zee has recorded a 14.69 per cent increase in net profits over the same period last year, the Manmohan Shetty-owned Adlabs has witnessed a 34.14 per cent growth. Others such as Ektaa Kapoor's Balaji Telefilms and Subhash Ghai's Mukta Arts have all seen net profits go down by 6.8 per cent and 85.84 per cent respectively.

The worst hit, however, seems to be Television Eighteen (TV 18) which has run up losses of Rs 5.62 crore due to restructuring of the operation of CNBC-TV 18 channel. The company, however, claims that the figures are not comparable due to its restructuring.

Officials in media companies blame the poor performance to the overall decline in the industry last year. "Last year was not a good one with movies flopping and advertisers cutting budgets. But from June 2003 onwards there has been a recovery and we expect to post better results in the forthcoming quarter," said a senior official in a media company.

Analysts said that besides this, there are company specific reasons as well. Mr Ajay Patadia, President (Corporate Affairs and Company Secretary), Balaji Telefilms, said that the company was consolidating its business and was drawing low margins for some of its programmes.

"Some of the high-value programmes were withdrawn by channels such as Sony and Zee," he said. Going forward, the company hopes to post a better performance due to hikes in margins and new launches in Sony, Zee, Sahara and Doordarshan.

Mr Nikhil Vora, Vice-President, SSKI Securities, said that the uncertainty surrounding the implementation of the Conditional Access System (CAS) was another reason for the poor show by television software production companies.

In the case of Mukta Arts, the company has suffered due to the `seasonality aspect of films.' The company hopes that Joggers Park, which was released in September, would help shore up its figures in the next quarter.

But analysts said that the future is not all that bleak for these companies. "With big companies such as Zee Telefilms and Adlabs doing well, the others are bound to follow suit," Mr Vora added.

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