Investors and players in general were coming down hard on Zee Telefilms as the company's popularity was being whisked away by channels sporting the World Cup

By 11:05 IST, the scrip of India's largest media company declined 2% to Rs 78.50. It came off the intra-day high of Rs 80.25 by then. Over 353,000 Zee Telefilms shares were recorded as volumes on BSE thus far. The scrip's recent spell has been poor, losing 12.8% from Rs 90 on 18 February 2003.

Domestic institutions like Unit Trust of India and Life Insurance Corporation of India are believed to be selling on the counter. Besides, the stock seems to be moving in tandem with the general market downtrend as well.

As the World Cup fervour reaches pitch, the television rating points of the company's programmes have been hit hard. Advertising revenues, as a result, have been descending. The company had earlier said - looking ahead, there is further low visibility in the advertising revenue scenario because of the Cricket World Cup. There could be an impact on the business of Zee because of a shift in advertising revenues to cricket, particularly during the cricket matches.

Already Sony Entertainment Television, which is telecasting the World Cup, has hiked advertising rates seven times for the super sixes, semi-final and final matches. The advertising rates for a spot has jumped from $7,000 to $50,000.

This hike should put further pressure on the company's revenues as money would be further squeezed after the rival SET increased advertising rates following India's strong chances of advancing further in the World Cup. The Cricket World Cup, which commenced on 10 February 2003, will end on 23 March 2003.

To add to the burden, the Union Budget for 2003-2004 hiked service tax from 5% to 8%. Big advertisers like Hindustan Lever, Nestle and Pepsi have been resisting the payment of the existing 5% service tax as it is. Broadcasting companies had to take some hit in absorbing this tax in some individual cases.

For the third quarter ended 31 December 2002, the media company's consolidated net profit jumped 36% to Rs 70.88 crore compared to Rs 52.11 crore in the corresponding period of the previous year. Total income increased by 9.89% to Rs 325.02 crore (Rs 3.25 billion) from Rs 295.76 crore (Rs 2.95 billion) in DQ 2001. On a stand-alone basis, for the quarter ended 31 December 2002, Zee Telefilms recorded a net profit of Rs 22.19 crore on total income of Rs 141.13 crore.

BSE code: 505537