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Shares of Reliance Industries rallied 2% to the day's high of Rs 2,958 on BSE in Thursday’s session as investor optimism increased after the Ambanis announced signing of a binding agreement with Disney to form a joint venture that will combine the businesses of Viacom 18 and Star India.Global brokerage Jefferies said Disney's business has been valued much lower than widely reported in the media. This transaction adds Rs 40 per share to Reliance's SOTP, it said while maintaining a buy rating on RIL with a target price of Rs 3,140.The potential combination will sport the most lucrative cricketing rights in India and has 40% share of the advertising market which opens avenues for better ad inventory monetization and content cost reduction with lower competition, it said.The JV will have over 750 million viewers across India and bring together media assets across entertainment (Colors, StarPlus, StarGOLD) and sports (Star Sports and Sports18) including access to entertainment via JioCinema and Hotstar.Also read | From September to a shaadi: How Disney found a new home for Mickey Mouse in IndiaAs India's No.1 broadcast network, it will have 35%+/40-45%+ share in the TV viewership/advertising market, a portfolio with dominant position in Hindi (No. 1 with 45-50% ad share), regional (No. 1 with 40-45% share), sports genre (IPL + ICC cricket + BCCI Cricket; 85-90% + revenue share) and digital (Hotstar + JioCinema).Given that RIL's effective stake in Viacom18 is 71%, RIL’s effective stake in the JV could be around 49.6%. "Hence, net value from the JV for RIL could be Rs 234 billion or Rs 35 per share (which is 49.6% of Rs 704 billion less Rs 115 billion of investment to be done by RIL)," JM Financial said.Viacom18 is a subsidiary of TV18 Broadcast, which in turn is a subsidiary of Network18 Media & Investments, in which RIL holds a 73.15% stake. Shares of both TV18 and Network18 fell 5% each in today's session.On a post-money basis, the deal values the JV at Rs 70,352 crore. During FY23, the valuation was 3.2x EV/Sales, 22.8x EV/EBITDA, and 35x PE. On a pre-money basis, Disney and Viacom are valued at Rs 25,900 crore and Rs 32,900 crore, respectively. The valuation (EV/sales) of Disney and Viacom18 stand at 1.5x and 7.2x on FY23, respectively, calculations done by Motilal Oswal shows."The underlying message from this transaction is that consolidation in traditional media is imperative, given structural risk from digital/OTT. In our view, companies that do not participate in consolidation face risk of marginalization. Prima facie, this consolidation is negative for Zee, Sony and Sun. Separately, reduced competition in sports would likely weigh on monetization of IPL media rights in the next auction (2028)—negative for IPL franchisees in the long term," Kotak Institutional Equities said.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

In India, general elections hold high significance for Dalal Street investors as early trends, opinion polls, and exit polls ahead of the final outcome provide cues on which party is likely to win the game. This time around, the election has gained prominence in light of India’s rising importance in geopolitics, its leading position in emerging markets, and the government’s aspiration to make India the world’s third largest economy from the current fifth position. But Dalal Street investors don’t seem to be very apprehensive about the outcome this time and are rather sure about a third term for the incumbent government, led by Prime Minister Narendra Modi. “Our assessment suggests a high likelihood of a comfortable majority for the BJP-led government, consistent with opinion polls...Given our assumption that the BJP is likely to secure power, we anticipate a continuation of their broad agendas outlined in the Manifestos of 2014 and 2019,” said Fisdom Research. So far in 2024, the Nifty 50 is up just 1%, as unpleasant global factors and high valuations drove foreign investors out of Dalal Street. But the unprecedented inflows from domestic institutional and retail investors has restrained the downside. In the first two months of 2024, DIIs have poured in Rs 52,354 crore into equities, whereas FIIs have sold stocks worth Rs 31,827 crore during the same period, according to data on StockEdge. The unprecedented domestic inflows indicates the growing confidence among home investors on India’s economic growth and are rather discounting the election outcome. Also Read | 5 sectors that could create wealth in 3-5 years“The government has facilitated a balanced approach, with a lower fiscal deficit and capex-led growth. Investors seem confident of the continuity of the current policy framework at the centre,” said Neeraj Gaurh, fund manager at Axis Securities. What does the historical trend say?With the growing confidence among investors of political and policy continuity, history may repeat this time. Historical data shows that the Nifty 50 has ended in the green on a three-month basis into the election results with an average gain of around 11% on four occasions in the last five general elections. The maximum gain of 25% was seen during the 2009 elections, while a minimum gain of 8% was achieved in 2019 elections, said Neeraj Agarwal of JM Financial. Asset Allocation StrategyNotwithstanding the election outcome, most money managers are now shifting bets and also recommending a switch to largecap stocks as valuations have turned frothy in the midcap and smallcap segments. Today we find more value in largecaps as compared to mid- and smallcaps, says Shridatta Bhandwaldar, Head - Equities, Canara Robeco Mutual Fund.On similar lines, Gaurh recommends investors to go for multi-asset allocation and diversify portfolios rather than chasing highly-concentrated smallcap folios, given their last one-year return.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Brokerage firm Axis Capital initiated coverage on RBL Bank with an add rating, Jefferies maintained a buy on RIL, UBS upgraded Gujarat Gas to neutral and UBS maintained a buy rating on Zomato.We have collated a list of recommendations from top brokerage firms from ETNow and other sources:Axis Capital on RBL Bank: ADD| Target Rs 280Axis Capital initiated coverage on RBL Bank with an ADD rating and a target price of Rs 280. The bank is diversifying its loan-mix with a higher focus on retail segments.Granular liabilities and there is normalization in the asset quality. Healthy net interest margins (NIMs) and fees to drive return on assets (RoA).Over FY24-26, Axis Capital expects loans/NII/PPOP/PAT CAGRs of 18/18/26/28%.Jefferies on Reliance Industries: Buy| Target Rs 3140Jefferies maintained a buy rating on RIL with a target price of Rs 3140. The potential combination will sport the most lucrative cricketing rights in India and has a 40% share of the advertising market.This opens avenues for better ad inventory monetization and content cost reduction with lower competition.Disney's business has been valued much lower than widely reported in the media. This transaction adds Rs 40/share to Reliance's SOTP.UBS on Gujarat Gas: Neutral| Target Rs 610UBS maintained a neutral rating on Gujarat Gas but raised the target price to Rs 610 from Rs 380 earlier.Improved outlook on volumes and margins as spot LNG prices soften. The industrial segment fuels economics in favour of gas in the near term.The optionality of alternative fuels to dictate GGAS's future pricing power. Infrastructure expansion to drive 11% CAGR in CNG volumes over FY24-27.UBS on Zomato: Buy| Target Rs 195UBS maintained a buy rating on Zomato but raised the target price to Rs 195 from Rs 150 earlier.The company reported a strong Q3 despite a modest food delivery slowdown and quick commerce shines. Blinkit surprised both on GMV and margins.UBS Evidence Lab receipts data for Jan'24 show industry volumes declining 2% MoM in line with seasonality.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)