HT Media may post a 38.5 per cent drop in net profit to 227 million rupees on net sales of 3.53 billion, while Deccan Chronicle Holdings' net may more-than-halve to 461.3 million, a Reuters poll of brokerages showed.

"We'll see de-growth in most of these firms. Newsprint prices have been high. Slowdown in advertising revenue is also there," Anand Shah, an analyst with Angel Broking said.

Newsprint costs surged because of a global shortage, while a slowing economy meant companies cut advertising budgets -- a double whammy for media firms, who were already battling shrinking margins.

Auto, retail and real estate - key advertisers to newspapers - are the hardest hit as high interest rates in the first half of 2008 curbed consumer spending, hitting demand.

Operating profit margin of media firms may narrow by 4.7 percentage points to 34 per cent, Motilal Oswal Securities said in report. Newsprint costs rose 30-35 per cent in the quarter while revenue will likely grow around 15 per cent, said Shah.

Newspapers, which import most of their newsprint, also suffered after the Indian rupee fell 3.6 per cent against the dollar in the quarter, analysts said.

Deccan Chronicle, which imports 100 per cent of its newsprint requirement, will see a drop of 33.4 percentage points in EBITDA margin, the Motilal Oswal report said.

The firm has launched a Bangalore edition of its English daily 'Deccan Chronicle' and a business newspaper 'Financial Chronicle' in Hyderabad, Chennai, Bangalore and Mumbai, resulting in margins getting squeezed by launch expenses.

"Deccan Chronicle is badly placed. (In) Hyderabad, they are losing ground," Angel's Shah said. "Their expenses are showing now but there's no revenue yet. They will show very bad numbers."

Most brokerages put their bets on Jagran Prakash due to its regional focus and higher dependence on domestic newsprint, prices of which eased earlier.

Going forward, analysts expect newsprint prices to soften, which could ease the pressure off operating margins but advertising revenue would take some time to pick up. Print media, however, face the risk of losing out to electronic peers for advertising revenue due to an assured reach and relatively better cost structure, brokerage Prabhudas Lilladhar pointed out in a report.

"We expect deceleration in advertising growth in the second half of 2009 on the back of decline in both volume and ad rate," an analyst with a local brokerage said.