Top 5 Media Stocks in India by Growth

The upcoming election fever has gripped India, and everyone is talking about the general election to be held sometime in April-May 2024.

That's not all. Apart from India, several other countries also have their general elections slated in 2024... countries like US, Brazil, Indonesia, Mexico, Pakistan, and Bangladesh.

Reportedly, over 4 billion (bn) people across the world will be sent to voting in the upcoming year.

While 'election' is currently one of the most used terms, you can also hear the stock market roar in the background. This is primarily because savvy investors are eyeing certain sectors and stocks that will largely benefit from the 'election hype'.

One of the sectors that stands to benefit is the media sector. With election campaigning on the rise, the advertising revenue of media companies is expected to witness explosive growth.

Keeping that in mind, we have shortlisted five media stocks that stand to benefit from the upcoming general election in India in 2024.

Take a look...

#1 Vertoz Advertising

First on the list is Vertoz Advertising.

This ad-tech company was founded in 2012 and is engaged in the business of marketing, advertising, and monetisation.

It offers services to digital marketers, advertising agencies, digital publishers, and other technology companies.

The company's technology platforms provide access to monetisation tools, advanced analytics, and advertising techniques.

It operates in three business segments, namely branding solutions, performance solutions, and enterprise solutions.

Given the growing use of digital media in elections of Telangana, Madhya Pradesh, Karnataka, Mizoram, and Chhattisgarh, Vertoz Advertising stands to benefit as it helps its clients reach its prospects digitally by focussing on content and user experience.

Coming to its financials, the company's revenue has grown at a compound annual growth rate (CAGR) of 12.3%, driven by strong growth in advertising revenue. The net profit also grew at a CAGR of 8.5%.

The return on equity (RoE) and return on capital employed (RoCE) stand at 13.4% and 19.4%, respectively.

Vertoz Advertising Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	469.0	423.0	590.0	426.0	838.0
Revenue Growth (%)		-9.8%	39.5%	-27.8%	96.7%
Net Profit (Rs m)	73.0	41.0	82.0	61.0	110.0
Net Profit Margin (%)	15.9%	10.0%	14.4%	14.7%	13.3%
Return on Equity (%)	20.2%	8.1%	14.2%	9.2%	13.4%
Return on Capital Employed (%)	25.1%	12.8%	18.2%	13.4%	19.4%
Average Price to Earnings (P/E)	18.6	38.2	27.7	36.4	17.9
Price to Book Value (P/BV)	3.7	3.1	3.9	3.4	2.4

Source: Equitymaster

Vertoz Advertising has operations in India, the US, the UK, and the UAE and plans to expand its reach to other countries as well.

It also plans to invest in technology to enhance its business offering continuously.

The share price of Vertoz Advertising has already grown by 63.2% in 2023, and with elections around the corner, there is scope for further growth.

To know more, check out Vertoz Advertising's financial factsheet and latest quarterly results.

#2 MPS

Second on the list is MPS.

It is a B2B learning and platform solutions company. The company has end-to-end offerings that provide a one-stop solution to its users.

It operates in three segments, namely content, platform, and e-learning, but derives the majority of its revenue from content solutions.

It has over 700 clients across 15 countries, including India, North America, Europe, and the Middle East.

The company has grown through acquisitions, and in the last ten years, it has acquired eight companies to expand its business.

With elections around the corner, the company can play a crucial role, given its expertise in content authoring and development, media asset development, content production, and digital transformation.

In terms of financials, in the last five years, the revenue has grown at a CAGR of 5.8%, driven by growth in its content solutions business. The net profit also grew by a CAGR of 7.5%, and the net margin expanded to 21.8%.

As a result, the RoE and RoCE also grew to 25.8% and 34.9% respectively.

MPS Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	3,880.0	3,516.0	4,327.0	4,633.0	5,132.0
Revenue Growth (%)		-9.4%	23.1%	7.1%	10.8%
Net Profit (Rs m)	760.0	599.0	586.0	871.0	1,092.0
Net Profit Margin (%)	21.0%	18.0%	13.9%	19.4%	21.8%
Return on Equity (%)	16.1%	16.3%	15.4%	23.7%	25.8%
Return on Capital Employed (%)	22.8%	22.8%	25.0%	32.6%	34.9%
Average Price to Earnings (P/E)	14.0	11.9	11.5	12.5	13.7
Price to Book Value (P/BV)	2.3	1.9	1.8	3.0	3.5

Source: Equitymaster

During 2023, the company's share price grew by 91.8%.

To know more, check out MPS's financial factsheet and latest quarterly results.

#3 Praveg Communications

Third on the list is Praveg Communications.

The company is an advertising company with core competence in exhibition, event management, hospitality sector, publication, and real estate marketing.

It has organised many state events on a turnkey basis and has been promoting tourism in the country by organising tourism events and managing tents in tourist locations.

It also owns a magazine named 'Tourism One' that exclusively promotes tourism.

The company also ventured into real estate marketing, promoting promotional and marketing activities related to real estate.

In 2022, the company also launched its own news channel 'Praveg TV'. This launch couldn't have come at a better time, given that the Gujarat State Legislative Assembly election took place in December 2022.

Coming to its financials, the company's revenue has grown at a CAGR of 23% in the last three years, driven by growth in its tourism and media businesses. The net profit also grew at a healthy CAGR of 38.5%.

The net margin expanded from 23.7% to 33% during the same time. As a result, the RoE and RoCE grew to 27.2% and 37.5% respectively.

Praveg Communications Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	609.0	599.0	456.0	453.0	849.0
Revenue Growth (%)		-1.6%	-23.9%	-0.7%	87.4%
Net Profit (Rs m)	29.0	38.0	107.0	122.0	284.0
Net Profit Margin (%)	4.8%	6.4%	23.7%	27.1%	33.7%
Return on Equity (%)	-175.2%	25.7%	56.4%	44.4%	27.2%
Return on Capital Employed (%)	-644.0%	36.8%	76.0%	61.2%	37.5%
Average Price to Earnings (P/E)	1.0	2.9	7.8	17.2	27.0
Price to Book Value (P/BV)	-1.8	0.7	4.4	7.6	7.4

Source: Equitymaster

The company's share price has grown by around 130.3% in 2023.

To know more, check out Praveg Communication's financial factsheet and latest quarterly results.

#4 TV18 Broadcast

Next on the list is TV18 Broadcast.

The company is a subsidiary of Network18 Media & Investments and is engaged in the news broadcasting and digital content business.

It runs India's largest news network spanning across business, general, regional, entertainment, and infotainment segments.

The company holds leadership positions in several genres and segments. Its portfolio of channels includes CNBC TV18, CNN, Colours, MTV, and News18 India.

It also houses the company's motion pictures and OTT (over-the-top) (Jio Cinema) businesses.

TV18 Broadcast has a market share of 11.7% in the news segment, a 10.3% market share in the entertainment segment and an annual average reach of 700 million (m).

Given its strong viewership, it's no wonder that the company primarily earns revenue through advertising and subscriptions.

Its subsidiary, Viacom 18 Media, ventured into the sports segment by acquiring the digital streaming rights for Indian Premier League (IPL) cricket matches. This is expected to drive the company's revenue in the next five years.

Coming to its financials, the revenue has grown at a CAGR of 9.5% in the last three years. It reported a net profit of Rs 1.2 billion (bn) in the financial year 2023.

TV18 Broadcast Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	42,280.0	44,592.0	38,307.0	46,972.0	50,357.0
Revenue Growth (%)		5.5%	-14.1%	22.6%	7.2%
Net Profit (Rs m)	2,104.0	4,167.0	7,457.0	9,262.0	1,278.0
Net Profit Margin (%)	5.1%	9.5%	19.8%	20.0%	2.6%
Return on Equity (%)	6.0%	11.2%	17.8%	19.4%	2.7%
Return on Capital Employed (%)	6.8%	17.2%	18.9%	22.1%	5.2%
Average Price to Earnings (P/E)	41.3	10.5	6.4	9.7	73.7
Price to Book Value (P/BV)	2.5	1.2	1.1	1.9	2.0

Source: Equitymaster

The company's share price grew by 29.5% in 2023.

With elections coming up, its foray into the sports business can drive revenue and net profit growth in the medium term.

To know more, check out TV18 Broadcast's financial factsheet and latest quarterly results.

#5 GTPL Hathway

Last on the list is GTPL Hathway.

Established in 2006, the company offers various services, including analogue cable TV, digital cable TV, and broadband internet in Gujarat, West Bengal, and Maharashtra.

It is the largest multi-service operator (MSO) in India and Gujarat, second in West Bengal and the sixth largest private wireline broadband provider in India.

It primarily earns revenue from subscriptions, followed by marketing incentives and internet services.

At present, GTPL Hathway is present in 1,500 towns across 22 states, including Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu, and North-Eastern states.

It has over 39,000 business partners, 200 broadcasters, and 1,700 enterprise clients in its portfolio. The company has also worked on over 30 government projects to date.

It distributes over 900 channels and has an OTT app aggregation product, which gives customers access to over 15 leading OTT apps.

Being the top MSO in India, it has a prepaid customer base of over 8.3 m, who help the company earn cashflows regularly.

It advertises on its digital platform - Hathway Digital, and the 50 plus own channels. With the election coming up, the company has an opportunity to grow its advertising revenue.

Moreover, with TV being the primary channel for advertising, the company can also increase its revenue by advertising on setup boxes.

In the last five years, the company's revenue has grown at a CAGR of 16.1%, driven by growth in cable TV and broadband segment revenue. The net profit also grew at a CAGR of 38%.

Its RoE and RoCE stood at 11.3% and 15.9%, respectively, at the end of financial year 2023.

The company also pays consistent dividends to its shareholders, and the five-year average dividend payout and dividend yield are 32.2% and 2.7%, respectively.

GTPL Hathway Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	12,892.0	24,247.0	25,300.0	24,567.0	27,140.0
Revenue Growth (%)		88.1%	4.3%	-2.9%	10.5%
Net Profit (Rs m)	249.0	880.0	2,114.0	2,187.0	1,248.0
Net Profit Margin (%)	2.0%	3.7%	8.6%	9.1%	4.7%
Return on Equity (%)	3.7%	12.1%	24.0%	21.2%	11.3%
Return on Capital Employed (%)	11.6%	25.7%	34.8%	28.5%	15.9%
Average Price to Earnings (P/E)	50.9	8.2	5.4	11.1	14.4
Price to Book Value (P/BV)	1.9	1.0	1.3	2.3	1.6

Source: Equitymaster

In 2023, the share price of the company zoomed by 26.5%.

Given the high scope of growth of television screens in the country, the company is focussing on expanding its cable business to all the states.

It also plans to capture the opportunity of growing demand for broadband, where the user base is expected to reach 900 m by 2025.

It plans to invest Rs 14 bn in its cable and broadband business in the next three years.

To know more, check out GTPL Hathway's financial factsheet and latest quarterly results.

Conclusion

Election campaigns do bring in a lot of money for media companies.

Although they are considered the darlings of the election season, it is important to be cautious before considering them for investment, as there is cut-throat competition in this sector.

A single campaign stumble can shift market shares faster than a political debate.

Hence, it is best to do your due diligence and check the fundamentals of media companies before investing in them.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...