Jhujhunwala Portfolio: Rare Enterprises, owned by veteran investor Rakesh Jhunjhunwala, bought shares of Zee Entertainment Enterprises last week. In just 10 days, the share price of ZEEL jumped 65 percent to reach a price of Rs 362.85. Rare Enterprises had invested Rs 110.22 crore in this company last week at a price of Rs 220.44. Now Jhunjhunwala’s company’s investment of Rs 110.22 crore has gone up to Rs 181.4 crore due to the rise in prices. There has been a profit of Rs 142 per share i.e. profit of Rs 71.4 crore.
The shares of Zee Entertainment had fallen last month at a 52-week low of Rs 166.80. On Wednesday, the company’s board approved the merger with Sony Pictures Networks India. According to the merger deal, Puneet Goenka will continue to be the MD and CEO of the merged company for five years. Analysts believe that despite the rise in its price for the last two weeks, it is trading at 20x.
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Expert’s opinion about investing in ZEEL
- According to Siddharth Khemka, Head (Retail Research), Motilal Oswal Financial Services, if EBITDA margins normalize to near earlier levels, improving corporate governance and operational performance could lead to better returns for investors in the long run. According to Khemka, there may be some structural changes in the business, board and leadership after the deal of Zee and Sony and after that it can reach new heights. Keeping the neutral rating of this stock intact, the brokerage firm has revised the target price for investment to Rs 320.
- Brokerage firm Edelweiss Securities has a Buy Advice on this stock. Analysts have increased its target price from Rs 343 to Rs 428 as the concerns regarding the board can now be resolved. The company formed after the merger will be a public listed company and the country’s top TV broadcast company. According to analysts at research and brokerage firm Edelweiss Securities, the merger will add sports, comedy and crime shows to Zee Entertainment’s portfolio.
(Article: Surbhi Jain)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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