MAM
Magna revises Indian Adex growth in 2016 from 18.4 to +16.2 percent
MUMBAI: Going by the recently released half yearly Adex report by IPG Mediabrands India, the Indian advertising industry is growing at a rate of +16.2 percent in 2016. The size of the industry is expected to touch $ 9 billion or Rs 564 billion (Rs 56,400 crore) equivalents by this financial year. Magna Global, an IPG resource that puts together this industry recognized report has revised the rate from its earlier prediction of 18.4 per cent in 2015, to 16.2 percent in the current report. Magna also predicts that Indian Adex will see a slight dip in 2017 and grow at a rate of +15.7 per cent.
On revising the forecast, Magna Global – India director of intelligence practice EVP S Venkatesh said, “Basis our initial read of the emerging trends we had envisaged a stronger headwind across digital formats on the mobile platform while the real numbers for H1-2016 suggests a lesser significant acceleration”
From a global perspective, India has overtaken Italy and made space for itself in the top ten list of advertising markets, and estimated to move up 4 ranks to become the 6th largest advertising market by 2020.
On India’s performance as an advertising market, IPG Mediabrands CEO Shashi Sinha said, “The outlook is extremely positive as globally India remains one of the fastest growing markets. In fact, India is now one of the top ten advertising markets in the world.”
Breaking the report further into media sectors, Television with 42 per cent market share will grow +17 percent. The biggest revenue growth drivers in the sector would be the T20 World Cup, Indian Premier League (IPL) and non-cricketing leagues buttressed by E-commerce, Telecom, Auto and CPG advertising. Addressable television and expansion of the measurement into rural India equips advertisers to reach more consumers and broadcasters to monetize now counted audience. Measurement will evolve to include addressable TV audience and though connected TV currently doesn’t pose a threat to linear advertising, it will open doors for more on demand content access. Mushrooming of both domestic and international OTT (over-the-top) players will eventually fragment TV viewing time.
Print will continue to be the second biggest medium in India with 35 percent market share and ad sales growth of +8 percent. Conventionally print heavy advertisers in CPG, BFSI, Automobile and now E-commerce will contribute to the segment growth.
Digital formats continue to disrupt traditional with the highest growth at +40 percent and increasing its share of market by 2 points to 13 percent. Videos will be the fastest growing format driven by consumption on mobile devices. Screen time will only increase as smartphones get bigger with better displays and faster bandwidth. Trailing this trend expect advertisers to ear mark higher promotional budgets.
Radio through foot print expansion along with increase in volume is estimated to grow +18 percent in 2016, whereas OOH will grow +15 percent in 2016. Both these segments will hold onto their market share of 4 per cent and 6 percent respectively.
The report also shared that India will retain its position as the fastest growing economy with real GDP (gross domestic product) growth of +7.5 percent in 2016. According to International Monetary Fund (IMF), India is likely to maintain the same GDP growth in 2017 as well. Consumer inflation slightly outside of target will force the central bank to hold onto its policy rates.
However the earlier reduction in rates gave the much needed impetus to automobile, housing, durables and education sectors. The farm sector, if favoured with a good monsoon, will set to rebound its output. The report estimates private consumption to mirror the growth rates and push for higher marketing spends.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
