NETWORK18 - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 1.9
| Stock Code | NETWORK18 | Market Cap | 6,197 Cr. | Current Price | 40.2 ₹ | High / Low | 65.3 ₹ |
| Book Value | 33.2 ₹ | Dividend Yield | 0.00 % | ROCE | -1.20 % | ROE | -9.29 % |
| Face Value | 5.00 ₹ | DMA 50 | 44.3 ₹ | DMA 200 | 51.3 ₹ | Chg in FII Hold | -0.31 % |
| Chg in DII Hold | -0.07 % | PAT Qtr | -55.8 Cr. | PAT Prev Qtr | -70.1 Cr. | RSI | 32.4 |
| MACD | -0.86 | Volume | 33,09,176 | Avg Vol 1Wk | 27,95,270 | Low price | 39.6 ₹ |
| High price | 65.3 ₹ | Debt to equity | 0.63 | 52w Index | 2.60 % | Qtr Profit Var | 15.8 % |
| EPS | 1.74 ₹ | Industry PE | 40.5 |
📊 Analysis: Network18 shows weak fundamentals with negative ROCE (-1.20%) and ROE (-9.29%), indicating poor efficiency and shareholder returns. EPS is low (₹1.74), and the company reported a quarterly loss of ₹55.8 Cr., though slightly better than the previous quarter (-₹70.1 Cr.). Dividend yield is 0%, offering no income support. Debt-to-equity ratio of 0.63 highlights moderate leverage. Technicals are bearish with price below both 50 DMA (₹44.3) and 200 DMA (₹51.3), RSI at 32.4 (oversold zone), and MACD negative (-0.86). Overall, Network18 is not a strong candidate for long-term investment unless a clear turnaround in profitability emerges.
💰 Ideal Entry Zone: ₹38 – ₹42 (only for speculative investors seeking turnaround opportunities).
📈 Exit / Holding Strategy: Existing holders should consider exiting on rallies near ₹60–₹65 resistance unless profitability improves. Long-term holding is not recommended given negative ROE, ROCE, and lack of dividend support. If holding, limit exposure and reassess in 1–2 years based on earnings visibility.
Positive
- ✅ Slight improvement in quarterly PAT (-₹70.1 Cr. → -₹55.8 Cr.)
- ✅ RSI at 32.4 indicates oversold levels, potential for short-term technical bounce
- ✅ Strong industry PE (40.5) reflects optimism in the media sector
Limitation
- ⚠️ Negative ROCE (-1.20%) and ROE (-9.29%)
- ⚠️ Dividend yield of 0% offers no income support
- ⚠️ Price below DMA 50 & DMA 200 indicates bearish trend
- ⚠️ Decline in institutional holdings (FII -0.31%, DII -0.07%)
Company Negative News
- 📉 Continued quarterly losses despite slight improvement
- 📉 Weak profitability metrics and negative returns
- 📉 Institutional selling pressure
Company Positive News
- 📈 Marginal improvement in quarterly PAT
- 📈 Oversold technical levels may trigger short-term recovery
Industry
- 📺 Media & broadcasting sector trades at an industry PE of 40.5
- 📺 Sector demand supported by advertising and digital content growth
Conclusion
🔎 Network18 currently shows weak fundamentals with negative profitability and no dividend support. It is not a suitable candidate for long-term investment. Only speculative investors may accumulate near ₹38–₹42 for short-term opportunities, while existing holders should consider exiting near ₹60–₹65 unless a clear turnaround in earnings is visible.
Would you like me to also prepare a peer benchmarking overlay comparing Network18 with Zee Entertainment, Sun TV, and TV18 Broadcast to highlight relative positioning in the media sector?