The Indian film industry stands out as a profitable investment opportunity thanks to the fast-paced digitalisation coupled with the expansion of OTT. The greatest market capitalisation firms can exploit the industry’s evolving dynamics.
The media and entertainment industry has reached paramount success primarily after the availability of fast and cheap internet. The M&E sector is set to reach ₹ 3.08 trillion by 2026. The industry is not new to success, so this new height of possible success seems like an achievable milestone.
Also read: Best communication stocks to invest in India
Media and entertainment industry overview
With the increase in middle-income households and as India moved towards becoming the third largest economy, the amount of disposable income in the hands of 142.86 Cr Indians increased.
The increased disposable income, along with cheap internet, paved the way for exponential demand for consumer durables, especially smartphones, resulting in the new age of media which transcended all boundaries of language, nationality, ethnicity, etc.
Now one can watch RRR (a telegu film) right after listening to K-Pop from one’s couch in Assam, India.
To understand this enormous landscape of media and entertainment industry, let us take a subsectoral view:
- Traditional media: There is a rise in regional content with 56% viewership of television being driven by regional language content. The top 3 box office hits in India have been KALKI 2898AD, Stree 2, and Devara Part 1. Two of the top 3 are regional films.
- OTT: The user penetration of OTT is expected to reach 42.2% by 2029. The OTT market is expected to have exponential growth in India. Indian OTT platforms are even trying to enter foreign markets.
- Gaming: With a user base of 180 Million Indians, India is the largest fantasy sports market. The sub-sector is expected to reach ₹231 billion by FY25. The government support experienced by this sector is extravagant. AVGC policies and task forces are set up by the Karnataka and Telangana Governments.
- Advertising and VFX: India’s advertising revenue is expected to reach ₹330 billion by 2024. Through a sharp increase in digital advertising mop-up, the Indian media and entertainment sector surpassed ₹2 trillion mark. The government announced the establishment of the AVGC Excellence Center in collaboration with IIT Bombay.
Best media and entertainment stocks
Overview
Sun TV Network Ltd
Primarily involved in television broadcasting, Sun TV Network’s main channel Sun TV started in 1993. The company also produces and distributes movies under Sun Pictures. It provides content in 6 languages such as Tamil, Telugu, Kannada, Malayalam, and, Bangla. In 2024, it started a general Hindi channel.
VIEWERSHIP
Sun TV enjoys the No. 1 position in terms of viewership in Tamil Nadu and Pondicherry whilst holding the 5th place in India as per BARC. Its strong viewership makes its stock one of the best media and entertainment stocks in India. Its viewership in South Indian languages has consistently been among the top 5.
PVR INOX Ltd.
The flag-bearer of the multiplex revolution in India, PVR is the biggest and most premium film exhibition chain in India and is one of the top media stocks in India. PVR currently owns
- 858 screens across 74 cities
- 173 cinemas
- Approximately 1.8 lakh seats.
EXPANSION
With a very strong market and geographic presence, the company added 97 screens in 9MFY24, while its target was to open 160-170 new screens. The company is also very good at cutting back its weaknesses. PVR closed 62 screens that were making losses. The company opened a Megaplex in Bengaluru in April 2024.
Zee Entertainment Enterprises Ltd.
Zee’s operations vary in these domains:
- Broadcasting satellite television channel.
- Space selling agent for other satellite television channels.
- Sale of media content
It is India’s largest television network connecting 1 billion+ people.
KEY POINTS TO REMEMBER
- The company has
- 48 domestic channels
- 41 international channels
- 5000+ movie titles
- Operating across 20 languages
- Zee was the first Indian company to undertake an international project and now has a strong global presence.
- Zee also operates in OTT through Zee5, which has 8 million monthly active users.
- In 2023, the company ran into a debt and governance issue. A total debt of 11000 Cr led to the disinvestment of promoters and the subsequent stepping down of Subhash Chandra (founder of the company). This fiasco led to a 50% fall in Market cap. Still, it is successfully maintaining its place amongst the best media and entertainment stocks.
Also read: Zee Entertainment shares surge after Punit Goenka resigns.
Stock comparison
| Name | CMP ₹ | P/E | Market Cap. (₹ CR) | Dividend Yield | NP Qtr(₹ Cr) | Qtr Profit Var | ROCE |
| Sun TV Network Ltd. | 745.10 | 15.98 | 29363.23 | 2.28 | 409.32 | -11.93 | 26.20 |
| PVR Inox Ltd. | 1488.80 | – | 14619.99 | 0.00 | -12.10 | -107.10 | 4.69 |
| Zee Entertainment Enterprises Ltd. | 123.20 | 27.66 | 11833.60 | 0.79 | 209.40 | 13.77 | 6.26 |
Source: Screener (as of March 2024)
KEY TAKEAWAYS
- Sun TV Network Ltd. has the largest market cap, which proves our observation that regional content seems to get a better trajectory. The list of best media and entertainment stocks seems to be a testament to this trend. Most companies amongst the top 10 media stocks in India either do solely regional or a blend of regional and Hindi.
- Although Sun TV gives out the maximum dividend, the majority of companies among the top 10 media stocks in India seem to give out little to no dividends. For an investor keen on dividends, Sun TV has an acceptable dividend payout of 34.0%.
- The sales growth of Sun TV is a poor 2.51% and its Qtr. Profit Var. is also diminishing.
- PVR has a very low interest coverage ratio, and the return on equity has also been low over the last 3 years (-6.75%).
- Currently, the company is almost debt-free, and the stock is trading at 1.06 times the book value. However, the sales growth and return on equity are low.
Also read: 37 financial mistakes to watch out for
Bottomline
The media and entertainment industry has been a very strong performer for quite some time. In the land of Bollywood, the consumer base this industry has is nothing short of extraordinary.
Moreover, the industry has seemingly adopted technology well. Adding any one of the top 10 media stocks in India to your portfolio could be a great choice given it suits your investor appetite.
FAQs
- Which is the best media stock in India?
Amongst the top 10 media stocks in India, we have painstakingly curated the list of top 3:
- Sun TV Network Ltd.,
- PVR Inox Ltd., and
- Zee Entertainment Enterprises Ltd.
Your needs and goals are also important parameters for this discussion. What you expect out of your investment and how long you can hold your stocks are important factors that will determine what stocks work best for you.
- Which entertainment stock is best?
The three best media and entertainment stocks in India are-
- Sun TV Network Ltd.
- PVR Inox Ltd., and
- Zee Entertainment Enterprises Ltd.
There are other parameters of stock choice as well. Personal needs and financial ambitions are important factors. Therefore, we suggest that you choose which stock works best for you.
- Which media share is the best to buy?
Multiple factors influence the answers to the questions:
- When to put your money in?
- When to hold?
- When to exit?
Some factors are company-specific and some depend on the individual. We have curated a very detailed list of things you must know about the best media and entertainment stocks. This research will cover the company-specific factors. You should assess your parameters before investing.
- What are the top 10 Indian stocks to buy right now?
The following sectors are expected to give good yields in 2025:
- IT
- Energy
- Healthcare
- FMCG
- Infrastructure
The media and entertainment sector stocks are something to look out for as well. The top media stocks in India as per market capitalization are:
- Sun TV Network Ltd.
- PVR Inox Ltd,
- Zee Entertainment Enterprises Ltd.
- What are the top media companies?
Amongst the top 10 media stocks in India, we have painstakingly curated the list of top 3.
- Sun TV Network Ltd.
- PVR Inox Ltd.
- Zee Entertainment Enterprises Ltd.
Your personal needs and goals that you wish to achieve through your investments are important parameters. Therefore, we suggest that you choose which stock works best for you.
