News Broadcasting
Tax regime change unlikely to benefit media companies
MUMBAI: A recent JP Morgan report titled “Budget FY04 Preview – easy on consumers, harsh on corporates” says the media sector will receive a positive impetus from a drop in the duties of set-top boxes (STBs). The report adds that a change in the tax regime is unlikely to affect media companies.
The positive impetus for the media sector is likely to come from the drop in the duties of set top boxes, says the JP Morgan report. This, it says, will likely reduce the prices of such boxes considerably, as a lead-in to the higher penetration of the conditional access system.
The report explores the impact of the budget on certain issues which are related to the media sector.
Foreign limit on DTH (direct to home): The report states that the limit is likely to be increased but not by a huge margin as CAS is being implemented.
Duty on STBs: This duty is likely to come down from 50 per cent to around 16 per cent. The STB prices would come down and this would provide an impetus to the adoption of STBs by the consumers. Zee Telefilms would be positively impacted by the same. However, the report maintains its overweight status on the Zee Telefilms scrip at a price level of Rs 84.80.
Change in corporate tax: The report expects that the marginal tax rate will be changed to 30 per cent. The impact will be minimal as the listed entertainment companies are paying taxes at this rate.
In summary, the report expects the budget to be easy on consumers and harsh on corporates. It adds that the major considerations for this year’s budget are likely to be:
(1) the high fiscal deficit;
(2) key state elections in 2003 and federal elections in 2004;
(3) global uncertainty and
(4) a comfortable liquidity situation with low interest rates.
* Given the proximity to elections, the government will likely dole out sops to consumers in terms of lower effective taxation. These include higher exemption limits, abolition of tax on dividend and, possibly, the removal of long-term capital gains tax. This has to be compensated elsewhere, given the high fiscal deficit levels.
* For corporations, the budget should reduce import tariffs, which could be negative for commodity companies. There could be a roadmap to increase effective taxation rates through reduction in exemptions, which could hurt low tax-paying companies.
* On excise, there should be further rationalization, which should be a long-term positive.
* Further efforts at fiscal consolidation through reduction in the government’s borrowing costs by buybacks of government debt at lower-than-market rates could be a short-term sentiment dampener-especially for the banking sector.
* The government could work at giving further incentives to investments in infrastructure by raising money through voluntary disclosure schemes-a long-term positive.
* Given that the equity market has been more or less flat over the past month, there does not seem to be a build up of excessive optimism in the market pre-budget. However, we believe that the chances of a major post-budget rally are not too great either, given the likelihood of the budget’s possible negative implications for corporate India. Additionally, the possibility of a conflict in the Middle East will continue to weigh on the stock market in coming weeks.
News Broadcasting
Network18 Q4 revenue grows 9.7 per cent, EBITDA at Rs 30 crore
PAT improves to Rs 306.6 crore, margins steady amid cost pressures.
MUMBAI: Not all news is breaking, some of it is quietly improving. Network18 Media & Investments Limited appears to be doing just that, tightening losses and stabilising margins even as costs continue to weigh on the business. For FY26, the company reported revenue from operations of Rs 1,955.1 crore, up from Rs 1,896.2 crore in FY25, signalling modest top-line growth in a challenging media environment. Total income stood at Rs 1,978.2 crore, compared to Rs 1,913 crore a year earlier.
Profit after tax came in at Rs 306.6 crore for the year, a sharp turnaround from Rs 3,225.4 crore in FY25, largely reflecting the absence of large exceptional items that had inflated the previous year’s numbers. On a more comparable basis, the company’s operating performance showed signs of gradual stabilisation.
However, the quarterly picture remained under pressure. For the March quarter, Network18 reported a loss of Rs 53.1 crore, narrower than the Rs 98.1 crore loss in the same period last year, but still indicative of ongoing cost challenges.
Expenses continued to track high. Total expenses for FY26 stood at Rs 2,235.7 crore, up from Rs 2,197.8 crore in FY25. Key cost heads included operational expenses of Rs 765.9 crore, employee benefits of Rs 475.9 crore, and marketing, distribution and promotional spends of Rs 427.1 crore, underlining the continued investment required to sustain reach and engagement.
At an operating level, margins remained under strain. Operating margin stood at 2.33 per cent for FY26, marginally higher than 1.77 per cent in FY25, while net profit margin remained negative at -13.02 per cent, though improved from -14.89 per cent.
On the balance sheet, total assets rose to Rs 8,957.6 crore as of 31 March 2026, from Rs 8,317.5 crore a year earlier. Equity strengthened to Rs 4,958.7 crore, while borrowings increased to Rs 3,112.8 crore, reflecting a higher reliance on debt to support operations.
Cash flows told a mixed story. While financing activities generated Rs 83.9 crore, operating cash flow remained negative at Rs -24 crore, highlighting ongoing pressure on core cash generation. Cash and cash equivalents, however, improved to Rs 33.9 crore from Rs 1.8 crore.
The numbers point to a company in transition growing revenues, trimming losses, but still grappling with structural cost pressures. In a sector where scale often comes at a price, Network18 seems to be inching towards balance, one quarter at a time.
