In May 2014, the Narendra Modi-led Bharatiya Janata Party (BJP) became the first since 1984 to win the national elections with absolute majority. Apart from an anti-incumbency wave, one of the biggest contributing factors to the resounding victory was the relentless advertisement campaigns. As BJP poured money into Brand Modi, the then-ruling Congress party spent millions defending its record against corruption charges.
As reported to the Election Commission, the BJP spent Rs.7.14 billion on the 2014 campaign, while the Congress spent Rs.5.16 billion. Even a regional party like Sharad Pawar’s NCP spent Rs.510 million. The battle is all set to begin again in 2019, and news media stocks that have largely underperformed this year could get a big boost in earnings, over the next quarters.
“The role of political TV advertisements were not big before the 2014 elections, but this election changed everything. Ad campaigns started around two to three quarters before the polls. Similarly, this time around too, ad revenues could spike,” says Bhupendra Tiwary, research analyst at ICICI Securities.
Tiwary’s optimism is shared by other analysts as well — the consensus is that this is the right time to buy news media stocks, and the following companies seem particularly promising.
Zee Media Corporation
With 327 million viewers and 14 news channels in eight different languages, Zee Media is one of the biggest news broadcasters in India. The company’s broad portfolio puts it in pole position to take advantage of the spike in election spending, according to analysts. Following its lacklustre performance in previous quarters, the company reported robust numbers in Q1FY19 — net profit surged a whopping 604%, from Rs.51.1 million in Q4FY18 to Rs.366 million in the latest quarter.
Improvement in Zee News’ ratings, the company’s flagship channel, along with strong performance from newly-launched r