Media stocks came strongly into focus today for their attractive valuations.

In the flurry up included Zee Telefilms (up 5.27% to Rs 75.95), Mukta Arts (up 8.06% to Rs 50.30), Sri Adhikari Brothers (up 7.05% to Rs 54.65), ETC Networks (up 3.32% to Rs 42), TV 18 (up 3.88% to Rs 72.30), Creative Eye (up 9.28% to Rs 10.60), Tips Industries (up 8.84% to Rs 33.85), Pritish Nandy (up 7.25% to Rs 24.40), Saregama (up 5.62% to Rs 47), Balaji Telefilms (up 5.02% to Rs 66.95), Crest Communication (up 5.16% to Rs 26.50), Jain Studios (up 2.04% to Rs 12.50) and Adlabs (up 3.33% to Rs 45).

Operators are behind the rise in media stocks today, following their attractive valuations after a recent battering. Besides, largest media listing Zee Telefilms has come into focus due to its encourging results.

In addition, the implementation of the conditional access system (CAS) from July 2003 is expected to improve the financials of boardcasting companies like Zee Telefilms, TV 18, Jain Studio and Sri Adhikari Brothers.

The Union Budget for 2003-2004 had just a slight impact on the media industry - in the reduction in customs duty on equipment related to broadcasting and cinema. This is expected to help upgrade broadcasting infrastructure and encourage up-linking facilities from India. Zee TV and Sri Adhikari Brothers are likely to be the biggest gainers from this Union Budget proposal.

The lower-than-expected cut in peak custom duty on set-top boxes has proved a disappointment, meanwhile . There has been a general reduction in peak custom duty to 25% from 30%. This should make imported set-top boxes somewhat cheaper though.

Music companies have specifically gained from the Union Budget though. The excise duty of 16% on pre-recorded audio CDs has been removed . This will make audio CDs even cheaper . More importantly, it will curb music piracy. Today, one of the biggest problems for the music industry is containing sales of pirated versions. Saregama and Tips Industries are likely to benefit from this provision.

In the last three months, 29 Entertainment and Media sector companies, lost 11.14% or Rs 572.17 crore in market capitalisation (m-cap) to Rs 4,565.68 crore from Rs 5,137.85 crore.

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