In the next one year, there are elections to several big states and then the elections to the central government, which should be around the same time next year.
Elections in Madhya Pradesh are being held later in December 2018. The largest circulated newspaper in the state is Dainik Bhaskar, which is owned by DB Corp. The shares of this company are currently trading at Rs 291.
However, with the central government elections in2019 slated to be a tough one, going by recent trends, expect newspaper and digital advertisement campaigns spend to hit a new peak. Interestingly, some of the media stocks have barely moved, though in the next few months, we could see a decent upmove.
In fact, Hindustan Media Ventures, which publishes Bihar and Jharkhand's largest circulated newspaper "Hindustan" has hit a near 52-week low. This stock is available at a p/e of just about 8 times.
Jagran Prakashan, which publishes Dainik Jagran has also seen its shares languishing for sometime. The p/e of some of these stocks range around the 15 levels, which is not very expensive. Remember, some of these companies are very strong in the radio business and also in the digital business.
The three largest circulated newspapers in the country are Dainik Jagran (owned by Jagran Prakashan), Dainik Bhaskar (owned by D B Corp) and Hindustan (owned by Hindustan Media Ventures). Apart from these in the listed space there is HT Media, which owns the Hindustan Times.
From a 1-year perspective some of these stocks may not be a bad bet. In fact, we see these stocks catching the fancy of marketmen in the next few months as we draw closer to the state and the central government elections. However, from a long-term perspective most of these companies face intense competition, allowing very limited leeway to improve margins.