December 2, 2022

Emkay Global has buy call on with a target price of Rs 310. The current market price of Zee Entertainment Enterprises is Rs 244.7. Time period given by analyst is one year when . price can reach defined target.

Zee Entertainment Enterprises Ltd., incorporated in the year 1982, is a Large Cap company (having a market cap of Rs 23503.82 Crore) operating in Media & Entertainment sector.

Zee Entertainment Enterprises Ltd. key Products/Revenue Segments include Income From Advertisement, Subscription Income, Television Content, Transmission Revenue, Other Operating Revenue and Commission for the year ending 31-Mar-2021.

Financials

For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2361.17 Crore, up 10.83 % from last quarter Total Income of Rs 2130.44 Crore and up 18.99 % from last year same quarter Total Income of Rs 1984.39 Crore. Company reported net profit after tax of Rs 181.95 Crore in latest quarter.

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Investment Rationale
Zee’s market share recovery was uneven this year, with this quarter seeing a further decline in network share to 17.1%. Its inability to gain market share despite launching more than 90 shows in the last year is concerning. Zee5 continued to see traction with higher MAUs and DAUs. However, higher investments widened EBITDA losses. Management has also highlighted that investments will remain elevated, signifying near-term pressure on margins. Ad revenue recovery is also likely to be more gradual, with advertisers curtailing their spending in a high-inflation scenario. Subscriber revenue growth also remains uncertain, with no visibility regarding the lifting of the pricing embargo. Though management remains positive about the original 8-9 month timeline for the merger, lack of approval from the stock exchanges so far makes us conclude that a delay is likely. Taking these near-term challenges for the business into account, the brokerage believes that any near-term upside triggers for the stock are limited. That said, the long-term story, with merger synergies, is likely to keep Zee ahead of its competitors.

Promoter/FII Holdings
Promoters held 3.99 per cent stake in the company as of 31-Mar-2022, while FIIs owned 47.86 per cent, DIIs 24.18 per cent.

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