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Within Elara Media & Entertainment and Internet universe, expect Zomato to deliver a promising show despite intensifying competition, supported by the festival season and user additions. In the ad market, traditional players – Zee Entertainment (Z IN) and Sun TV Network (SUNTV IN) – may take a hit as regards ad segment revenue due to a slowdown in FMCG. Affle India (AFFLE IN) may continue to ride on digital ads given the pick-up in the developed market. PVR-INOX may continue to grow due to healthy box office (BO) performance. DB Corp (DBCORP IN) may post a broad-based performance and Entertainment Network of India (ENIL IN) and TV Today (TVTN IN), a mixed bag

Zomato – Growth continues despite competition: In Q3E, expect Zomato’s overall revenue to grow to INR 56.0bn (70% YoY growth) – Its Food Delivery GOV may rise 23.4% YoY and quick commerce GOV 140% YoY as dark store addition picks pace. Backed by inorganic deals in the entertainment segment, GOV for the Going-Out segment may grow 120% YoY, largely on a low base in FY24. GOV growth may be supported by healthy user addition, spiked ‘use frequency’ in the festival season and increased A&P spends

In Q3E, take rates (TR) for Food Delivery may grow 20bps QoQ to 21.0%, led by ad revenue and rise in platform fees to INR 10 per order in the festival season in select markets. Expect adjusted EBITDA margin to grow 20bps QOQ to 3.7%. In quick-commerce, TR may grow a modest 10bps QoQ to 19.0% due to intensifying competition and higher discounts by closest peer. QoQ, profitability may be stable with adj. EBITDA loss at 0.1%.

FMCG – Demand slowdown to hit traditional ad players: FMCG sector holds a 47% share in TV ads (which has hit some roadblocks amid the slowdown in the sector). This has hit traditional players such as Z and SUNTV – Expect respective ad revenue to dip 8.0% and 5.0% YoY in Q3E. Revenue from the Subscription segment may continue with its growth momentum in Q3 – Z and SUNTV may grow 5.0% and 2.5% YoY, respectively. Revenue from Others and Theatrical segment may drop as movie releases have been muted from Z/SUNTV’s roster in Q3, Overall revenue for Z and SUNTV may drop 2.2% and 6.5% YoY, respectively.

For Z, expect EBITDA margin at 14.5% in Q3FY25E (165bps QoQ drop) due to increased investments in content given its focus on growth post the recent cost restructuring. But margin performance may remain largely on track. QoQ, loss in Zee5 may remain stable. SUNTV’s EBITDA margin may drop to 57.2% in Q3E (down 159bps QoQ) and 762bps YoY from a high base of last year (64.8% in Q3Y24).

PVR-Inox to ride healthy BOC wave: Sequentially, key metrics may script a strong comeback – Expect occupancy at 27% (25.7% in Q2FY25; 25.2% in Q3FY24), net ATP at INR 231 (INR 216 in Q2FY25; 228 in Q3FY24) and net SPH at INR 137 (INR 135 in Q2FY25, INR 131 in Q3FY24). In Q3, net Hindi BO collection jumped 40.0%/7% QoQ/YoY to INR 15.1bn, backed by INR 7.3bn, INR 2.5bn and INR 2.6bn collections for Pusha-2, Singham Again and BB3. Footfalls may grow slightly to 39.0mn (0.5% QoQ/6.8% YoY), hit by soft October. Net screen addition (two) has been muted in Q3. Ad revenue is also expected to growth 15% YoY. Overall revenue of PVR may grow to 8.6% QoQ/13.9% YoY and EBITDA (post IndAs) to 31.3% (up 179/78bps QoQ/YoY), respectively.

Developed market to support AFFLE’s growth: The Developed Market segment of AFFLE is estimated to grow at 23% YoY, higher than India & EM’s 22% YoY. With large base of last year, AFFLE’s overall revenue may grow 20.8% YoY (revenue fully organic) in Q3E. The festival season in India has been stable for digital ads. Elevated discussion with clients in the US may further support growth and India and EM may ride the digital penetration theme. QoQ CPCU rates may be stable and expect EBITDA margin to improve to 21.1% (up 23bps QoQ and 171bps YoY), supported by implementation of Gen AI and increased profitability of YOUAPPI and JAMPP platforms

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